The Monthly Insider | January 2016
The Hustis/Jovanovic Team
Our Industry: Whats the Latest?
Compass 2015 Year End Market Report
Amidst the dire economic news coming out of China recently and the extremely volatile financial markets, you may have heard that New York real estate closed prices increased dramatically year-over-year (YoY).
2015–2016 Year-over-Year Increase
- Median Price is up 31%
- Resale Condos Prices are up 25%
- Co-op Prices are up 6%
- New Development closed sales are up 21%
What describes this phenomenon?
Some of it has to do with the “closed” sales data from contracts that were signed in new developments over the past 3 years. The fact that many ultra luxury new developments especially along Billionaires Row have started to close has shifted the median and average prices upwards. Another factor that has also raised the average and median prices is the relative disappearance of the sub $500,000 apartment. In most parts of the country half a million dollars buys you a nice home in an area with great schools and services. In prime Manhattan and Brooklyn it’s very difficult to find a sub $1,000,000 apartment let alone sub $500,000. The market report not only shows that the sub $1,000,000 market segment inventory dropped dramatically YoY, but also that these apartments sell faster, having the lowest average days on market. As NYC’s population increases and the local job market continues to be strong and diversified, land will continue to become more scarce and expensive. Thus signaling that this price category will eventually disappear.
So what’s really going on…
Right now it is no secret that the market slowed in Q4 due to several factors such as: rising interest rates, projected lower bonuses, lower hedge fund returns in 2015, decrease in international buyers due to a strengthening dollar, and a general cautiousness in relation to economic forecasts in Europe, China, and the various developing countries in Latin America and Asia. Despite this general sentiment, the market is signaling a more balanced 2016 due to one simple fact; inventory is down 13% YoY. The bottom line is that the turbulent financial markets and global political turmoil is balanced out by low inventory levels and consistent demand, thus signaling a market where neither the seller or the buyer have all the leverage.
Our Industry: The Scoop.
Last week Governor Andrew Cuomo released his vision and some renderings of a potential renovation plan for Penn Station and the Farley Post Office into one massive mixed-use transportation hub. The cost will surely surpass the $3 billion dollar proposed budget. The redesign complexities are unique, including merging a working train station within the bureaucracy of a state, federal, and municipal structure as well as the ongoing power struggle involved with the owners of Madison Square Garden. To sum it up, the plan is extremely ambitious but much needed.
What’s on the Agenda?
Everyone is in agreement that the Penn Station experience is beyond horrendous. Not only is it overcrowded (it was originally built for 200,000 daily passengers and serves 650,000 daily), but it is an eyesore and completely disorganized. About six years ago we were lucky enough to receive a tour of the Landmarked and nearly 95% vacant Farley Post Office with an executive of the Empire State Development Corporation. As he walked us through the floors of the vacant offices and the seemingly endless former mail-sorting facility, he spoke of the vision of a modernized train station with a glass atrium and track entrances mixed in with high end retail and a commuter convenient office component. We were amazed and our minds wandered with all possibilities. Great cities need impressive, functional and visually pleasing ports of entry and departure. It is a lasting image of our city and the Governor’s plan while bold, is an important issue that needed to be addressed. We applaud the governor for his vision and for setting timelines. In 90 days all proposals are due and we look forward to all the ideas that various developers and their architects have created!
Our News: Here is what we’ve been working on…
Team and Company Recap 2015
Much is new and much has changed in the market and industry since we joined Compass 17 months ago. The Hustis/Jovanovic Team took leadership roles at Compass; investing hundreds of hours as members of the Compass Strategy Committee and working hand in hand with the C-suite, software engineers, marketing, branding, business development, and product teams. We enjoyed contributing to this industry changing company, all while having our best year brokering on behalf of our clients.
What does this mean for our clients?
Using our knowledge and experience we have played an integral role in crafting strategies and creating tools that improve processes, data quality, analytics, and our presentation of properties. The implementation of these tools have freed up time to spend with our clients and on the properties we represent. Not only are we happier and more empowered as a team, but our clients are seeing the results as we work to improve and perfect the real estate buying, selling, investing and renting process. In the coming months we will be sharing some of these game changing tools and strategies along with letting you know all the regions of the world Compass is expanding to! In the meantime, The Hustis/Jovanovic Team remains committed to you and all your real estate needs.
15 Compass Offices (More to come) NYC | Washington DC | Miami | Boston | Hamptons| Los Angeles
Our News: Learn More About the Compass Team
Liming is one of our favorite people at Compass. He is our Chief Technology Officer and one of the smartest and most approachable people with which we have ever had the privilege of collaborating. He received his Ph.D. in Computer Science from the University of Pennsylvania, where he developed graph-based algorithms to synthesize realistic human animations from motion capture data. Prior to Compass, Liming worked at D. E. Shaw Research where he led a team that developed specialized molecular dynamics simulation software for the Anton supercomputer. At the time, the Anton Supercomputer was the fastest computer in the world. At Compass he leads a team of 43 Engineers that work hand in hand with the Product, Marketing and Agent Teams in building tools and systems that make Compass agents more productive. Liming was one of the first people we met when we joined Compass and we have come to rely on each other quite frequently. He is a true collaborator and a great friend!
Lifestyle: On the Mark…
Architects and urban planners play an interesting and fundamental role in our society. They formulate ideas and design space in hopes that our physical reality is altered to function better, thus creating a higher quality of life. A recent dialog between two brilliant architects raised the popular question of how New York needs to keep innovating in order to adapt to population growth and our changing needs as a society. We as citizens have to continue to push to be a city that seeks and creates opportunities and doesn’t get stuck in it’s current political and bureaucratic state of a “City of Can’t.” Gregg Pasquarelli and Vishaan Chakrabarti are architects we admire and we suggest viewing their discussion.
Lifestyle: Neighborhood Highlight
Boerum Hill, Brooklyn
Rucola | 190 Dean Street- Cozy Italian Dining
French Louie | 320 Atlantic Avenue — French- American, Best for Brunch
Building on Bond | 112 Bond Street — Great Afternoon Spot
Brooklyn Inn | 148 Hoyt Street — Best for Sunday Afternoon Drinks
Betty Bakery | 448 Atlantic Avenue — Colorful & Gourmet Bakery
Blue Bottle Coffee | 85 Dean Street — The Best Coffee Around
Primary Essentials | 372 Atlantic Avenue — A Mix of Special Objects