Guest Post – Steps to Take Before Buying a Home by Paul Purcell

February 6, 2011 by Leave a Comment

Paul Purcell

Paul Purcell is a co-founder of Rutenberg Realty, a top ten boutique residential real estate firm based in Manhattan.  A respected industry voice, Purcell is often quoted in such prestigious publications as The New York Times, and has appeared frequently on New York 1 News as well as CNN, CNBC, and WNBC-TV.

Originally printed in Resident magazine’s October, 2010 issue

The number one real estate question these days seems to be “Is this a good time to buy a home?”  Given the current state of the economy and the housing market, consumers are heavily weighing the decision of “buy or not to buy.”  The decision, however, is always based on each individual’s unique needs and abilities.  But, whether you’re a first time buyer or in the market for a second home, there are a series of steps always worth following.  With ample preparation, you’ll feel more confident about the home buying process and be better prepared to make an educated decision.

Why Buy a Home?

Homeownership still remains one of the highest goals for many people because of its benefits.  Besides the number one reason of being the American dream, owning a home of your own transcends pride of ownership as well as a sense of security and belonging.  For many, homeownership represents personal and financial success.  As a valued investment, a home can have many financial advantages and tax benefits.  The amount of interest you pay on a home loan and the real estate taxes you pay on your home are among the major federal tax deductions.  Also, owning a home is the way many people build wealth.

Before you venture into the home buying journey, you might want to consider the following:

  1. Know What You Can Afford. Before you begin, you should figure out what kind of home you can afford based upon your monthly budget.  Create an itemized list of what you spend each month and determine how much will go to housing.  You might have to economize in order to get the home of your dreams, but don’t be unrealistic with your regular day-to-day needs and obligations.  Also, be sure to speak with a trusted financial advisor to get an objective opinion about mortgages and to be clear about the precise amount you can borrow.  Most importantly, be certain to understand the mortgage product – its terms and conditions.  Don’t be afraid to ask questions.  It’s a good idea to know what’s on your credit report and have a clear idea of your income stream so you can pre-qualify yourself for a loan.
  2. How and Where You Should Live. Is a single-family home right for you?  Would a condo be a better choice?  Which neighborhood, town, or city best fits your lifestyle?  These questions are important and require work.  Your friends and family will all have an opinion.  Listen to them objectively.  Remember, there is no real incentive for your real estate agent to tell you about places where they don’t sell, so consider their opinion judiciously.  Do your homework, prioritize your needs and wants, visit neighborhoods, try out the commute, ask questions and use the Internet.  Now more than ever, take the time to learn the local market conditions and see as much property as you can to better understand price and value.  There are some tremendous opportunities in most markets, but you have to educate yourself.  If you’re not entirely sure about a location, you might want to consider renting something first to determine if the area is a “fit.”  After all, this is your dream and not someone else’s.
  3. Select the Right Real Estate Agent.  Most of us spend more time picking out a restaurant than we do a real estate agent.  Yet, this is potentially the single largest financial transaction most of us will make in our lifetime.  It deserves greater attention!  Ask your friends, neighbors and work colleagues for recommendations.  Interview several prospective real estate agents.  Ask questions about their background, tenure in the profession, their firm, sales performance, and their knowledge of the market in which you’re interested.  A good agent brings knowledge to the table.  They don’t just open doors.  Above all else, make sure your personalities match too.
  4. Build Your Team.  It’s never too early to begin thinking about the other service providers necessary to turn your home ownership dream into a reality.  In additional to your financial advisor, there are other members of this process that you will also want to take into consideration.  For example, you might want to consult with an attorney to help with the complex legal paperwork and contracts.  You may also want to use the services of a house inspector, who can help determine whether the structure, construction and the mechanical systems of the home are completely safe.  If you do not already have an insurance agent, you may want to “shop around” among several companies before selecting the right one to assist with your move to a new location (or even if you are staying local, for that matter).  When you begin your search, ask your realtor to help you compile this list of other potential team members.

Remember, as in most things, preparation is key.  If you understand your finances, do your homework, learn as much as you can about the market, select an agent who understands your needs, build a great team of people you can trust and keep your focus and your cool, you will be in a much better position when the right home comes along.

If you are interested in purchasing or leasing property in the Village, or another Manhattan or Brooklyn neighborhood please feel free to reach out to our team for a free consultation by calling (212) 400-4838, or by e-mailing yourkeytothecity@AkerlyRE.com.

Related Articles
Filed Under: Buyer information, Guest posts, Relocating to NYC, Tenant information Tagged With: , , , , , , , , , , , , , ,

113 Jane Street – From Surly Seamen to Budget Travelers and Nightlife Denizens

February 6, 2011 by Leave a Comment

113 Jane Street historic photo

Jane Street’s long history in Greenwich Village has evolved over time.  Historians believe that its name was derived from a cow path that at one time lead to the Jayne Farm which grew tobacco in the area.  Today, at the most western point of Jane Street lays a storied building with a somewhat sordid history at 113 Jane.  The current Georgian style, red brick building designed by architect William Alciphron Boring was built in 1908 for the American Seaman’s Friend Society, a then eighty year old organization who “sought to bring civilizing influences to bear on the tens of thousands of sailors passing through the port of New York.”  The six-story building functioned as a seaman’s hostel with 156 rooms for sailors plus more for officers, engineers, cooks, and stewards.  The rank of the men while at sea came ashore with them and determined which rooms they could rent or which amusement rooms they could frequent.  Seaman paid $.25 per night while others paid $.50.  No alcohol was allowed on the premises and Christian proselytizing of the rough set was common.

NY Times Announces Sinking of Titanic

When the Titanic infamously sank on April, 15 1912, many survivors of the tragedy found their way to New York.  Ironically, the luxurious Titanic had been designed to compete with the Lusitania and Mauretania operated by rival company Cunard Line.  When the R.M.S. titanic sank in the frigid waters of the Atlantic, the Cunard Line’s Carpathia rescued the survivors and returned many of them to the operator’s pier on the Hudson River across from 113 Jane.  More than 100 of the survivors gathered there one night for a memorial service at which “a mighty, roaring chorus” could be heard singing “Nearer, My God, to Thee” according to the New York Times.  Many of them were sailors, now destitute after losing their jobs aboard the Titanic, and New Yorkers left clothes and money for them at the building.

The building was converted to other uses in 1931, but many sailors remained in the cramped living quarters.  In 1933, the NYPD was dispatched to deal with the surly bunch who hurled chairs and books at staff members attempting to keep order.  The American Seaman’s Friend Society sold the building to the YMCA in 1944 and it was converted to the Jane West Hotel in 1951.  The hotel, which was never substantively remodeled from the tiny 49 square foot rooms that housed sailors along narrow corridors with bathrooms at the end, was eventually used as single room occupancy (SRO) residences by some of New York City’s down and out.  The operation later changed its name to the Hotel Riverview.

By 2009, long-term residents paid $200 per month for their meager West Village abode while transients passing through paid $99 per night.  This is where Sean MacPherson, Eric Goode, and their partners came in.  They envisioned pod like rooms that would appeal to young travelers with the $99 per night price tag in a city where modest accommodations regularly top $250 per night.  They had already built the Bowery Hotel and renovated the Maritime Hotel, at 16th and Ninth Avenue in Chelsea – both of which had become nightlife destinations.  In order to bring their vision to fruition, over 150 residents, many of whom where drunks, degenerates, and drug addicts, would need to be relocated.  Most would not leave voluntarily and they were protected by housing laws that made it difficult to evict them.  But the construction began, many of the SRO residents departed, and 113 Jane was on its way to transforming into the The Jane, the modern hotel the developers envisioned.

Jane Ballroom

Today, The Jane offers its small rooms to travelers looking to experience NYC on the cheap or who are interested in the building’s interesting history.  Rooms are decked out with polished wood, flat-screen TVs, WiFi and iPod docking stations.  According to Trip Advisor, 77% of these travelers enjoy their stay. Those that don’t, complain about the small facilities, shared bathrooms, and noise from the bar downstairs.  That bar, the Jane Ballroom, was created from an auditorium left over from the buildings early days and designed with period décor.   It had more recently been used as The Jane Street Theater which was notable for launching such shows as Hedwig and the Angry Inch. The venue became the cocktail den du jour when the Beatrice Inn involuntarily closed its doors in 2009.  But the party was short-lived as it lead to an epic battle between the hotel’s owners and the nearby townhouse owners that makeup the Jane Street Block Association. The bar closed, then opened, then closed again but eventually emerged with a much toned down atmosphere in the lounge.

The Jane Hotel, 113 Jane Street at West Street, (212) 924-6700 or http://www.thejanenyc.com

Filed Under: Small business spotlight, Village history Tagged With: , , , , , , , , , , , , , , , , ,

Hidden Date Spot Opens on Hudson Street

January 26, 2011 by 1 Comment

Hudson Clearwater

Hudson Clearwater has just opened in what sort of looks like an abandoned insurance office on Hudson Street.  You may need some help in discovering it, but we can help with that.  From the corner of Hudson and Bank, locate the boarded up storefront, head around back, and walk fifteen paces to the unmarked green door that is the entrance.

Once you enter you will find yourself in a garden that will be open for al fresco dining in the warmer months.  Enter the restaurant and find yourself surrounded by marble countertops, reclaimed wood tables, hardwood floors, exposed brick walls, and a beautiful bar.  Check out the Photos and the Menu.

The restaurant also offers a private dining room (as if the hidden storefront wasn’t already enough!).  They are accepting reservations now.

Hudson Clearwater, 447 Hudson Street, (212) 989-3255 orhttp://hudsonclearwater.com

Filed Under: Openings and closings Tagged With: , , , , , , , , , , , , ,

Foreign Investor Interest in U.S. Market Hits Ten Year High

January 17, 2011 by Leave a Comment
A 20 segment panoramic image of the New York M...

Image via Wikipedia

According to the Association of Foreign Investors in Real Estate (AFIRE), more foreign investors are interested in U.S. real estate than at any time since the firm began surveying investors in 2000. Members of the survey hold more than $265 billion in U.S. real estate and $627 billion globally. The data collected from survey respondents ranked interest in the U.S. four times higher than the second ranked county, the United Kingdom. In fact, 72% of respondents said they are planning to invest more capital in the U.S. in 2011 than they did in 2010 and most believed that our domestic property markets offer the best investment return potential in the world. That being said, investors are focusing their interest almost exclusively in a half-dozen major metropolitan areas, especially New York City and Washington D.C. As CoStar Group Director of Advisory Services Hans Nordby put it, these investors “don’t take connecting flights.” James A. Fetgatter, the CEO of AFIRE, put it another way: “their strategy is more akin to a rifle than a shotgun.”

Multi-family property continues to remain the asset class of choice followed by retail, hotels, office, and then industrial. Brazil displaced China as the number one emerging market of choice (China was second), followed by India, Vietnam and Mexico.

If you would like to speak to a member of our team about investment opportunities in Manhattan or Brooklyn, please call (212) 400-4838 or e-mail yourkeytothecity@AkerlyRE.com.

Related Articles
Filed Under: Investor information Tagged With: , , , , , , , , , , , , ,

Bumpy Ride on the Road to Recovery

January 17, 2011 by Leave a Comment
President Barack Obama confers with Federal Re...

Image via Wikipedia

Lyrics to Bumpy Ride by Robyn:

Even though it’s a bumpy ride
Keep your head above the waterline
Keep focused and you’ll make it through
Keep on rollin’ is what you’ve got to do
Even though it’s a bumpy ride don’t you slip and don’t you slide

The second decade of the third millennium has begun and there are a number of events to look out for this year that could affect the real estate markets both locally and nationally.

1. U.S. Avoids the Dreaded Double-Dip

The threat of the double-dip has haunted America since “green shoots” were spotted by Ben Bernanke back in April of 2009. Fears were recently stoked by the release of the latest S&P/Case-Shiller Index showing declines in 18 of the 20 cities represented in the index. However, expect the tax cut extensions and payroll tax decrease to keep the U.S. out of recession. GDP growth will likely be in the 2.5% range (+ or – 50 basis points), not nearly enough to put a significant dent in unemployment, and most will use the tax cut savings to pay down bills.

2. Homeownership Rate Will Continue to Decline

The homeownership rate in the United States peaked in 2004 with 69.4% of the population owning their primary residence. That number has now slid to 66.9% and could reach as low as 62% in 2012 (the lowest level since 1960). Although historically low pricing and interest rates should be assisting buyers in the market, there are a number of factors that continue to put pressure on the homeownership rate. Stubbornly high unemployment continues to prevent many purchasers from making large financial decisions, whether they are currently unemployed or simply fearful of the possibility that they could be. Additionally, the millions of owners who lost their properties in foreclosures, sold them in a short sale, or defaulted before selling the property in a traditional sale, are now struggling with tainted credit and tighter credit guidelines in the mortgage market. Finally, the current administration has suggested that it could reconsider some of the policies that have been at the foundation of the increased homeownership rate in the past half-century including the mortgage interest deduction, public-private partnerships (i.e. FNMA and FMCC) that subsidize the mortgage industry and keep interest rates low, and capital gains tax exclusions for primary residences.

3. Issues With MERS Could Slow the Foreclosure Process

State Supreme courts have begun to question the legal standing of the Mortgage Electronic Registration System (aka “MERS”). MERS is a privately held company formed in 2004 that operates an electronic registry designed to track the ownership of mortgage loans nationwide. Essentially, the company asserts to be the mortgage owner’s nominee for the security interest (the mortgage or deed of trust) indicated by the notes transferred by lenders, investors, and their loan servicers in county land records. Wall Street used MERS to speed the securitization process and later foreclosures. Courts have addressed a number of legal issues regarding the system including the electronic notarization of documents, the legitimacy of notarizations done across state lines, and whether the company has standing to act as the plaintiff in a mortgage foreclosure. Expect Congress to address reform in 2011.

4. Foreclosures Will Increase

According to CoreLogic Inc., more than 10.8 million homeowners, or 22.5% of all mortgage borrowers, are underwater. These owners cannot sell without a short sale and are at risk of defaulting if any additional pressure is put on their household income or if they decide a strategic default is in their best interest. Legal issues including the robo-signing scandal, issues with MERS, and continuing pressure from States’ Attorney General have slowed down the foreclosure machine in many states, but expect that process to reverse in early 2011. That reversal should eventually help to clear out the market. However, shadow inventory persists in many forms (i.e. owners who defaulted but who benefit from slow foreclosures in judicial foreclosure states, REO on the books of banks but not released to the market, and inventory held by private owners who are waiting for a market rebound to attempt to sell). All of this increased inventory along with decreasing national demand will likely lead to a slow housing recovery at best.

5. Apartment Living Will Continue to Increase

With the homeownership rate continuing to slide demand for apartment housing is on the rise and will continue to be for the foreseeable future. Demographic trends that point toward increased demand include overall population growth, echo boomers entering the housing market, continued high levels of immigration, a continued shift in household composition away from the traditional married couple with children toward single person or single parent households, and a return to urban centers by populations currently living in the suburbs. The increased demand has already placed upward pressure on rental pricing nationwide and a lack of inventory and planned multi-family housing starts in the coming years will continue to do so.

6. Bankrupt Municipalities and Broke States

We can expect Detroit and at least one other city in Michigan to go bankrupt this year. Other potential victims of municipal largess and dwindling tax revenues include Los Angeles, Miami, Oakland, Houston, and San Diego. The discussion of such events is already affecting the bond markets. In legal circles, discussions are developing on the prudence of amending the law to permit states to file (think Illinois, California, Arizona, and Nevada). Currently, states can run out of money but do not have the protection of bankruptcy. The formal process of debt discharge may be the quickest road to recovery available and the only way to deal with massive unfunded obligations such as pension contracts. Additionally, now that Republicans have taken over the house and a large minority of the Senate, we can expect less enthusiasm for any plan to redistribute federal funds to states. This will certainly lead to continued cutbacks and major reductions in public services.

7. Unions Will Be Under Attack

Due to growing budget deficits and a public backlash against massive benefit programs, elected officials from states such as Maine, Ohio, and Arizona are pushing legislation to limit the power of labor unions, particularly those representing government workers. New governors are looking at every line item of their budget and finding that the salaries and pensions of government employees make up a significant portion of state budgets. Particularly in Republican states, politicians are pursuing aggressive structural changes aimed at weakening the bargaining power and political influence of unions, including ones in the private sector.

8. China Overheats Before the U.S. Recovers

Analysts have a close eye on the Chinese government as it takes steps to rein in inflation without derailing its red-hot economy. China may be expected to grow at 5-6% this year, but that is nowhere near as much as their government wants or the world expects. These could lead to the bursting of their property bubble and could pressure commodities as well as possibly derailing the global economic recovery.

9. Property Bubbles Finally Deflate in Australia and Canada

Australia, who has largely avoided the global recession may see its luck come to an end. Expect their economy to come to outright recession and look for Canada to slow as its real estate markets deflate. In November, The Economist released a report stating that Canada’s housing market was overvalued by as much as 24%.

If you would like to speak to a member of our team about about how to customize your investment strategy in Manhattan or Brooklyn or to speak about finding a new home in the area, please call (212) 400-4838 or e-mail yourkeytothecity@AkerlyRE.com.

Filed Under: Economic news Tagged With: , , , , , , , , , , , , , , , , , , , , , , ,