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I know this site is about Costa Rica but I thought I would post an update on what the real estate market is doing here in NYC. I have read many posts in this forum on the decline of the American market and people struggleing to sell homes and complete there move to CR. Since I am a broker in Manhattan I thought I would fill you in on what has been happening up here. After a big slowdown from October thru December the buyers are back in force! Truthfully I can not explain it, although wall street bonus money always bolsters the market in January, this up tick seems to have some legs. Quality is selling, we are back to bidding wars I just had two and they both went over the ask.One of the properties I had for seven months the other was a new listing that went in 5 days. Basicaly it is all about price and location, the quality is selling the the others are sitting like dead wood. With rents so high people would still rather own, and with twice as much inventory on the market as this time last year buyers can find quality homes and seller are a bit more flexable because of all the bad press the houseing market has been getting. I for one really thought we were going to see a big, big downturn with riseing inventory and buyers afraid to pull the trigger because of an eroding market…put the funeral off it ain’t dead yet! Love to hear what going on in your nsck of the woods…I have also heard that Florida is seeing some rebound as well. So for those who feel our markets are tied together we still have very low interest rates and lots of liquidity, of course this could/will change. But my guess is you will see even more Americanos buying up these condos in Jaco and useing dirt cheap American money to do it. Scott you better upgrade your server to handle all these gringos looking for quality projects to buy into..Lol.
February was a spectacular month here in our own area of Escazu & Santa Ana.
The Country Club project is just about sold out (they raised their prices again in March) and they have not finished building the first building yet …
Just for a laugh, can you give us a break down of the avferage cost per square meter/foot up there?
Scott Oliver – Founder
WeLoveCostaRica.comWe are at about 1300 persqft.96th street and South for new Condos. Of course that can vary up or down a few hundred dollars depending on location and amenities. Co-ops trade from approx. 1000-1200 persqft also depending on other factors. No matter how you slice it it ain’t cheap!!
Holybeejabbers!
So the cheapest 1,000 square foot *co-*op* in Manhattan would go for about $1,000,000
And a new 1,000 square foot *condo* in Manhattan would be priced at around $1,300,000
Dare we ask two more questions?
1. What would be the monthly maintenance be and …
2. What would be the annual property taxes on those apartments?1 square foot = 0.093 square meters so at $1,300 per square foot, the condos work out to be about $13,978 per square meter
I am in the process of buying a new two storey luxury home myself, it’s 300M2 (3,228 square feet) with a nice little garden in a highly-secure gated condo community in a great location in Santa Ana, built by one of the best builders I have come across and it costs US$1,033 per square meter.
From what you are telling me, “if” I could find a condo home like this in Manhattan, it would cost over US$4 million dollars instead of $310,000 and I don’t even want to imagine how much the property taxes would be….
Scott Oliver – Founder
WeLoveCostaRica.comMy house is in Florida…it went on the market in mid-January & we had only 1 showing between then & this last week. Since Thursday, I’ve shown the house 3 times in 4 days so I’m definitely seeing an upturn right now! I’d love to think the house will sell soon – my husband is already in Bejuco & I’ll be there next Monday with the kids!
I am currently showing one customer 3-4000sqft townhouses in Brooklyn Heights and they start at approx. $4,000,000 and that is “gross” square footage, usable is approx.20% less. As a quick rule of thumb in a co-op your monthly “maintenance” charges are approx. $1.00 to $1.75 per square foot, $1.00 dollar being just about as low as it will get. Usually about 40% to %50 of the maintenance is tax deductable as a portion of it is paying off the underlying mortgage on the building. In a co-op you do not own real property, but shares in the corporation, and you have a proprietary lease that conveys your right to occupy the the apartment. And lets not forget about co-op boards, but thats another story. Your real estate taxes are also included in this monthly charge. In a condo you do get a tax bill every month and the monthly “common charges” are approx. 30-50 percent less than a co op. In the new developments you will usually have taxes abated for the first 10 years after the building closes. Thes monthlys are also adjusted for oil prices, major building repairs etc..
Hola Lotus,
Yes the market in Florida is picking up. With NO major hurricanes last year and a new governor in office who said he would do something about the high cost of hazard insurance there seems to be people out there buying again. We closed on one of our rentals in Jan.that was on the market since May! The person that bought it is from Hawaii, but has a brother here in Florida, who is interested in our other property. I won’t say how long that one has been on the market or I will become ill again.(lol) It has been a nighmare, but hopefully the light at the end of the tunnel is getting brighter. Once that one sells it will bring us a little closer to our permanent move to C.R. and the Pura Vida life!
So, VIP members light a candle or say a prayer for us!So for a 1,000 square foot co-op apartment, someone would pay $1,000 -$1,750 per MONTH for their share of ‘maintenance’ and property taxes.
And in my brand new 3,228 square feet condo home, I’ll be paying about $230 for BOTH maintenance (swimming pool, security etc) as well as property taxes
God! I LOVE this place.
Scott Oliver – Founder
WeLoveCostaRica.comLotus, Good to hear the NY market is turning around. Most of us didn’t expect to see a turn around until late 2007 or early ’08. This is welcome news and should bode well for the entire US economy. We have recently seen an uptick in our business, and the beginning of March looks like it could set a good pace for the end of the first quarter. This should translate well also for the CR real estate market and tourism down there too.
Great to finally hear some positive news!There are always upticks even in a down market and let’s remember that Lotus is NOT referring to the New York market, he is referring to the Manhattan market which has always been unique and certainly does not represent the market in the rest of the USA.
Some (including myself) might describe this as the calm in the eye of the hurricane and please bear in mind that I am referring to the US market and NOT the real estate market in Costa Rica.
The number of vacant homes and foreclosures in the US are at very high levels and we haven’t really begun to see the fallout from the sub-prime (high-risk) mortgages and did you see how many of those lenders have gone bankrupt recently?
“In a December report, the Center for Responsible Lending estimated that nearly 20 percent of those who took out risky mortgages will lose their homes nationwide. In California, more than 21 percent are likely to default, with a foreclosure rate as high as 25 percent in some areas.”
I would suggest that the default rate will be far higher than 25% and in the New York Times a few weeks back I noted that “1 in 5 sub-prime loans will end in foreclosure”…
“About 2.2 million borrowers who took out sub-prime loans from 1998 to 2006 are likely to lose their homes”. In real terms, that translates into roughly 10 million people!
The US savings rate is in negative territory and when interest rates go higher (and they will) the people that have interest only mortgages – which is also a huge number of people – will also suffer.
Constructions starts are all at very low levels and construction is a huge employer in the USA and I stopped believing the ‘financial indicators’ coming out of the government a long time ago.
The housing “boom” is entirely due to Greenspan’s “cheap money” policy (low interest rates) and Business Week summarized it well saying:
“Today’s housing prices are predicated on an impossible combination: the strong growth in income and asset values of a strong economy, plus the ultra-low rates of a weak economy. Either the economy’s long-term prospects will get worse or rates will rise. In either scenario, housing will weaken.”
As Stephen Jen, the chief currency economist at Morgan Stanley, said recently in an article in the New York Times, “All the policy makers still believe in the possibility of a dollar crash. It’s still lingering out there.”
The US (people and country) are moving in a direction that is simply unsustainable. And we all know what happens when people go on a spending spree and continuously spend far, far more than they earn with their credit cards, at some stage, they are asked and then forced to pay their debts.
And the powers that be absolutely know this will happen which is one of the reasons why we saw the changes in the bankruptcy laws in 2005 that makes it harder for consumers to dodge their debts.
There’s a catastrophic financial storm on the horizon and if you saw the ‘Perfect Storm’ movie, you’ll know how that ends.
Should the US attack Iran, which many people unfortunately expect, this will probably be the straw the breaks the camel’s back but, no doubt the architects behind that will then blame the decimated US economy on the ‘war on terror.’
Scott Oliver – Founder
WeLoveCostaRica.comI share most of the same feelings, and was surprised to see this buying “frenzy” start again. And you are absolutley correct that the “Manhattan” market is a unique animal fueled by the big money makers and shakers…it wasn’t to long ago that there were no buyers out here, unfortunately not many people remember that.
Scott, Thanks for putting that into perspective. New York City is not indicative of the rest of the country, but I think I was trying to grab on to any good news up here to keep hope. You are correct about the subprime market and the negative savings rate. This, I think, also comes from a live for today attitude most Americans have adopted over the last decade.
The foreclosure rate is also of great concern. This could totally collapse any Real estate comeback.
Just yesterday I was talking to a customer who was a real estate broker. He told me he buys his homes with 10year ARM’s. The RE market, he tells me, has traditionally always gone up, despite short downturns, and no one lives in their homes more than 10 years anyway. I found this quite interesting for a broker to use this buying strategy. I guess this feeling is what has been driving the market recently.
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