An open house for a five-bedroom brownstone in Brooklyn, New York, priced at $949,000 drew 300 visitors and brought in 50 offers. Three thousand miles away in Menlo Park, California, a one-story home listed for $2 million got six offers last month, including four from builders planning to tear it down to construct a bigger house. In south Florida, ground zero for the last building boom and bust, 3,300 new condominium units are under way, the most since 2007.

The U.S. spring homebuying season has been marked by a frenzy of demand fueled by the Federal Reserve’s drive to push down borrowing costs, a scarcity of listings and Wall Street’s new appetite for foreclosed homes. While values remain well below their peak, economists including Stan Humphries of Zillow Inc. (Z) and Mark Vitner of Wells Fargo & Co. assert prices in some areas are rising at an unsustainable pace — a dramatic shift from early 2012, when billionaire Warren Buffett said housing “remains in a depression.”

“It’s a big change from a year ago,” said Paul Willen, a senior economist at the Federal Reserve Bank of Boston. “You’ve gone from hearing horror stories about people losing money to hearing stories of frenzy — lots of traffic and multiple offers.”

Price Surge

U.S. home prices jumped almost 11 percent in March from a year earlier, the biggest gain since the height of the real estate boom in 2006, CoreLogic Inc. reported last week. Values are rising faster than incomes, an indication that prices may fall in some cities once higher mortgage rates erode affordability, Humphries said. Investor purchases will inevitably cool, adding another potential hit to the market, according to Vitner.

The gains in some U.S. areas aren’t sustainable for a healthy market, said Dean Baker, co-director of the Center for Economic and Policy Research in Washington.

“If prices keep going up at this rate for another six months, we will have a bubble, and people will get hurt,” he said in a telephone interview.

U.S. buyers spent three times their annual incomes on homes at the end of last year, and those properties were 15 percent pricier relative to incomes than before the housing bubble of the mid-2000s, according to data from Seattle-based Zillow (Z). Markets such as Silicon Valley, Southern California, Boston and New York will look expensive relative to incomes when mortgage rates rise, Humphries said.

‘On Sale’

“The Fed has put every home on sale because of its actions,” Humphries said in a telephone interview. “We’re not saying you should ignore the sale sign and not pay a cheaper price. We want people to be aware of the fact that this is unusual and not bake these expectations of high appreciation into their long-term calculus.”

The average rate for a 30-year fixed mortgage was 3.51 percent this week, and reached a record low of 3.31 percent in November, according to Freddie Mac. That compares with an average rate of 6.24 percent from 2001 to 2006.

It’s too early to say another bubble is emerging. So far, the biggest gains are limited to hard-hit markets such as Phoenix and Las Vegas and thriving job centers such as San Francisco, while prices are falling in cities such as Chicago and Indianapolis, according to CoreLogic. Nationally, existing-home sales are about a third off a 2005 peak and home construction is down by 66 percent. Also, in contrast to the easy lending of the boom years, mortgage standards are strict.

Spotty Recovery

In areas such as Long Island, New York, and Omaha, Nebraska, price gains are within moderate growth levels of 3 percent to 5 percent, according to the National Association of Realtors. In other cities, demand remains stagnant and the market is far from overheated.

Homebuyers in Erie, Pennsylvania, a port on Lake Erie in the northwest part of the state, are still finding plenty to choose from, said Debra Fries, a local agent with Coldwell Banker Select. The median home price in the area fell 5 percent to $105,000 in the first quarter from a year earlier, according the Realtor group.

“We don’t have any bubbles,” Fries said. “We’re steady as a stream.”

U.S. home prices fell 35 percent from their July 2006 peak to the bottom in March 2012, and are still 29 percent off their high, according to the S&P/Case-Shiller index measuring 20 U.S. cities. Nationally, prices dropped so much during the crash that they remain about 7 percent undervalued, based on comparisons with historical prices, incomes and rents, Trulia Inc. said this week, introducing a feature on its website called “Bubble Watch.”

Eight Markets

Still, the recent price surge has made eight U.S. markets – - including Orange County, California; Houston; and Portland, Oregon — overvalued, the San Francisco-based real estate data company said.

The housing market has defied predictions of a tepid recovery by many economists. A year ago, Moody’s Analytics Inc. said prices in 2013 would climb 1.6 percent. The company revised its projections upward for each of the last six months and now expects an increase of 7.5 percent this year. Gains probably will moderate in 2014, said Celia Chen, a Moody’s housing economist who predicts a 4 percent rise as homebuilding ramps up and underwater homeowners regain enough equity to sell.

CoreLogic said today that it projects prices will rise at an annualized rate of 3.9 percent through 2017 after climbing 7.3 percent in 2012.

Phoenix, Atlanta

Of the 150 metropolitan areas tracked by the National Association of Realtors, 9 out of 10 showed price increases in the first quarter from a year earlier and areas such as Silicon Valley, California; Phoenix; Atlanta; and Reno, Nevada, saw gains of more than 30 percent, the group said. Prices declined in 17 markets, including Edison, New Jersey; Champaign-Urbana, Illinois; and Allentown, Pennsylvania.

“This is a good spring for sellers in a hurry,” Jed Kolko, chief economist for Trulia, said in a telephone interview. “Buyer demand is stronger than we’ve seen it in years and it’s been strong enough to lift sales despite tighter inventory.”

The buying frenzy was on display at a March open house in Brooklyn, a borough of New York City where the median price rose 14 percent to $515,000 in the first quarter from the prior year as the number of listings plunged 45 percent, according to Douglas Elliman Real Estate and appraiser Miller Samuel Inc. Over two hours, 300 visitors streamed into a three-story brownstone in Crown Heights and it went under contract for more than the asking price less than a week later, said Barbara Brown-Allen, a Douglas Elliman agent who represents the seller.

Brooklyn Boom

The fear of losing out on mortgage rates that are close to the lowest on record is spurring the rush, Brown-Allen said. The up-and-coming Brooklyn neighborhoods of Crown Heights, Bushwick and Bedford-Stuyvesant have surged in popularity during the past year because buyers have been priced out of Manhattan and more exclusive Brooklyn neighborhoods, such as Park Slope and Cobble Hill, she said.

“It was a zoo — sometimes there were over 100 people in the house at a time,” Brown-Allen said. “Once the inventory is this short, you have a lot of people vying for the same properties.”

Above Asking

Even in markets like Boston, where CoreLogic put home-price gains at a moderate 8 percent in March, demand is high. Often, homes spend only one day on the market, said Cliff London, a broker with the RE/MAX Home Team in the suburban town of Needham, Massachusetts.

“By the time the first open house is over the offers are coming in, sometimes above asking price,” London said. “There’s a lack of quality inventory — that’s fueling it.”

In much of the country, inventory has been drained by institutional investors such as Blackstone Group LP and Colony Capital LLC buying single-family homes, often foreclosures, to turn into rentals, said CoreLogic Chief Economist Sam Khater.

Blackstone, the largest buyer in the U.S., spent more than $4 billion on 24,000 rental properties last year. The company recently bought 1,400 residences in Atlanta, the biggest bulk deal for the fledgling homes-for-lease industry. Such purchases helped to drive prices up 12 percent in March from a year earlier in Georgia, where values only rose 1.2 percent six months earlier, Khater said.

Moderating Prices

Appreciation in Arizona (SPCSPHX) is moderating as investors look in other markets for better yields, Khater said. Prices in the state rose 17 percent in March from a year earlier compared with a 20 percent increase in September 2012, he said.

Vitner of Wells Fargo said investors are buying properties as quickly as they can and when they leave, housing will take a hit. Investors accounted for 19 percent of sales in the U.S. in March and even more in some former bubble markets, according to the National Association of Realtors.

“The problem is if they don’t earn a high enough return, they all walk away,” Vitner said. “Investors accounted for a larger proportion of the housing recovery than people realize.”

While the tightness in the existing-home market is driving up sales for new homes, homebuilders can’t increase production fast enough because of labor shortages and rising competition for lots in the best locations. There were 153,000 new homes available for purchase in March, just 10,000 more than a five-decade low in mid-2012.

Not Done

In Menlo Park, builders are selling houses long before they’re completed, said Keri Nicholas, a Realtor with Coldwell Banker in the affluent Silicon Valley town. Land is in such short supply that they’re buying million-dollar homes to knock down and put up mansions, she said.

A three-bedroom house Nicholas listed for $2 million last month received four offers from builders. It sold to an owner-occupant who paid all cash, she said.

In south Florida, 20 condominium towers with more than 3,300 units are under construction, according to Peter Zalewski, owner of Condo Vultures LLC, a brokerage and consulting firm based in Miami. Another 14,600 units are planned, about three-quarters of them for Miami-Dade County, where the crash left dozens of unfinished and failed condo projects, now mostly filled with renters, he said.

“I don’t think there’s any question that we’re in the early stages of the next great south Florida construction boom,” Zalewski said.

The conditions that have propelled prices up for the past year won’t last, said Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania.

“We’re eventually going to see mortgage rates increase, supply increase, and affordability decline, so you probably cut price gains at least by half,” Naroff said. “It will be a slowdown, not a crash.”

But wider homes don’t necessarily sell for higher prices per square foot–location and layout factor in. A 13-foot, four-bedroom townhouse at 35 West 12th in Greenwich Village sold for $5.2 million in 2011, while the same year, a 20-foot, two-family townhouse at 69 Bedford Street went for $2.6 million. Important, too, is how far the width deviates from the Manhattan average.

Wider townhouses are a high commodity, offering a buyer more flexibility to work with the original floor plan. However, even with ample space, if the design does not take advantage of that space, the value is decreased. Miller warns against “throwing amenities at a property and not considering a key attribute like width.”

There’s something to the skinny houses, too. “There is some cachet behind having the tiniest townhouse around. You can boast about that,” said Sofia Song of StreetEasy.

Read the rest of the story on The Real Deal.

An open house for a five-bedroom brownstone in Brooklyn, New York, priced at US$949,000 drew 300 visitors and brought in 50 offers. Three thousand miles away in Menlo Park, California, a one-story home listed for US$2-million got six offers last month, including four from builders planning to tear it down to construct a bigger house. In south Florida, ground zero for the last building boom and bust, 3,300 new condominium units are under way, the most since 2007.

The U.S. spring homebuying season has been marked by a frenzy of demand fuelled by the Federal Reserve’s drive to push down borrowing costs, a scarcity of listings and Wall Street’s new appetite for foreclosed homes. While values remain well below their peak, economists including Stan Humphries of Zillow Inc. and Mark Vitner of Wells Fargo & Co. assert prices in some areas are rising at an unsustainable pace — a dramatic shift from early 2012, when billionaire Warren Buffett said housing “remains in a depression.”

“It’s a big change from a year ago,” said Paul Willen, a senior economist at the Federal Reserve Bank of Boston. “You’ve gone from hearing horror stories about people losing money to hearing stories of frenzy — lots of traffic and multiple offers.”

Price Surge

U.S. home prices jumped almost 11% in March from a year earlier, the biggest gain since the height of the real estate boom in 2006, CoreLogic Inc. reported last week. Values are rising faster than incomes, an indication that prices may fall in some cities once higher mortgage rates erode affordability, Humphries said. Investor purchases will inevitably cool, adding another potential hit to the market, according to Vitner.

You’ve gone from hearing horror stories about people losing money to hearing stories of frenzy

The gains in some U.S. areas aren’t sustainable for a healthy market, said Dean Baker, co-director of the Center for Economic and Policy Research in Washington.

“If prices keep going up at this rate for another six months, we will have a bubble, and people will get hurt,” he said in a telephone interview.

U.S. buyers spent three times their annual incomes on homes at the end of last year, and those properties were 15% pricier relative to incomes than before the housing bubble of the mid-2000s, according to data from Seattle-based Zillow. Markets such as Silicon Valley, Southern California, Boston and New York will look expensive relative to incomes when mortgage rates rise, Humphries said.

‘On Sale’

“The Fed has put every home on sale because of its actions,” Humphries said in a telephone interview. “We’re not saying you should ignore the sale sign and not pay a cheaper price. We want people to be aware of the fact that this is unusual and not bake these expectations of high appreciation into their long-term calculus.”

The average rate for a 30-year fixed mortgage was 3.51% this week, and reached a record low of 3.31% in November, according to Freddie Mac. That compares with an average rate of 6.24% from 2001 to 2006.

It’s too early to say another bubble is emerging. So far, the biggest gains are limited to hard-hit markets such as Phoenix and Las Vegas and thriving job centres such as San Francisco, while prices are falling in cities such as Chicago and Indianapolis, according to CoreLogic. Nationally, existing-home sales are about a third off a 2005 peak and home construction is down by 66%. Also, in contrast to the easy lending of the boom years, mortgage standards are strict.

Spotty Recovery

In areas such as Long Island, New York, and Omaha, Nebraska, price gains are within moderate growth levels of 3% to 5%, according to the National Association of Realtors. In other cities, demand remains stagnant and the market is far from overheated.

Homebuyers in Erie, Pennsylvania, a port on Lake Erie in the northwest part of the state, are still finding plenty to choose from, said Debra Fries, a local agent with Coldwell Banker Select. The median home price in the area fell 5% to US$105,000 in the first quarter from a year earlier, according the Realtor group.

“We don’t have any bubbles,” Fries said. “We’re steady as a stream.”

U.S. home prices fell 35% from their July 2006 peak to the bottom in March 2012, and are still 29% off their high, according to the S&P/Case-Shiller index measuring 20 U.S. cities. Nationally, prices dropped so much during the crash that they remain about 7% undervalued, based on comparisons with historical prices, incomes and rents, Trulia Inc. said this week, introducing a feature on its website called “Bubble Watch.”

Eight Markets

Still, the recent price surge has made eight U.S. markets — including Orange County, California; Houston; and Portland, Oregon — overvalued, the San Francisco-based real estate data company said.

The housing market has defied predictions of a tepid recovery by many economists. A year ago, Moody’s Analytics Inc. said prices in 2013 would climb 1.6%. The company revised its projections upward for each of the last six months and now expects an increase of 7.5% this year. Gains probably will moderate in 2014, said Celia Chen, a Moody’s housing economist who predicts a 4% rise as homebuilding ramps up and underwater homeowners regain enough equity to sell.

CoreLogic said today that it projects prices will rise at an annualized rate of 3.9% through 2017 after climbing 7.3% in 2012.

Phoenix, Atlanta

Of the 150 metropolitan areas tracked by the National Association of Realtors, 9 out of 10 showed price increases in the first quarter from a year earlier and areas such as Silicon Valley, California; Phoenix; Atlanta; and Reno, Nevada, saw gains of more than 30%, the group said. Prices declined in 17 markets, including Edison, New Jersey; Champaign-Urbana, Illinois; and Allentown, Pennsylvania.

“This is a good spring for sellers in a hurry,” Jed Kolko, chief economist for Trulia, said in a telephone interview. “Buyer demand is stronger than we’ve seen it in years and it’s been strong enough to lift sales despite tighter inventory.”

The buying frenzy was on display at a March open house in Brooklyn, a borough of New York City where the median price rose 14% to US$515,000 in the first quarter from the prior year as the number of listings plunged 45%, according to Douglas Elliman Real Estate and appraiser Miller Samuel Inc. Over two hours, 300 visitors streamed into a three-story brownstone in Crown Heights and it went under contract for more than the asking price less than a week later, said Barbara Brown-Allen, a Douglas Elliman agent who represents the seller.

Brooklyn Boom

The fear of losing out on mortgage rates that are close to the lowest on record is spurring the rush, Brown-Allen said. The up-and-coming Brooklyn neighbourhoods of Crown Heights, Bushwick and Bedford-Stuyvesant have surged in popularity during the past year because buyers have been priced out of Manhattan and more exclusive Brooklyn neighbourhoods, such as Park Slope and Cobble Hill, she said.

“It was a zoo — sometimes there were over 100 people in the house at a time,” Brown-Allen said. “Once the inventory is this short, you have a lot of people vying for the same properties.”

Above Asking

Even in markets like Boston, where CoreLogic put home-price gains at a moderate 8% in March, demand is high. Often, homes spend only one day on the market, said Cliff London, a broker with the RE/MAX Home Team in the suburban town of Needham, Massachusetts.

“By the time the first open house is over the offers are coming in, sometimes above asking price,” London said. “There’s a lack of quality inventory — that’s fuelling it.”

In much of the country, inventory has been drained by institutional investors such as Blackstone Group LP and Colony Capital LLC buying single-family homes, often foreclosures, to turn into rentals, said CoreLogic Chief Economist Sam Khater.

Blackstone, the largest buyer in the U.S., spent more than US$4-billion on 24,000 rental properties last year. The company recently bought 1,400 residences in Atlanta, the biggest bulk deal for the fledgling homes-for-lease industry. Such purchases helped to drive prices up 12% in March from a year earlier in Georgia, where values only rose 1.2% six months earlier, Khater said.

Moderating Prices

Appreciation in Arizona is moderating as investors look in other markets for better yields, Khater said. Prices in the state rose 17% in March from a year earlier compared with a 20% increase in September 2012, he said.

Vitner of Wells Fargo said investors are buying properties as quickly as they can and when they leave, housing will take a hit. Investors accounted for 19 percent of sales in the U.S. in March and even more in some former bubble markets, according to the National Association of Realtors.

“The problem is if they don’t earn a high enough return, they all walk away,” Vitner said. “Investors accounted for a larger proportion of the housing recovery than people realize.”

While the tightness in the existing-home market is driving up sales for new homes, homebuilders can’t increase production fast enough because of labor shortages and rising competition for lots in the best locations. There were 153,000 new homes available for purchase in March, just 10,000 more than a five- decade low in mid-2012.

Not Done

In Menlo Park, builders are selling houses long before they’re completed, said Keri Nicholas, a Realtor with Coldwell Banker in the affluent Silicon Valley town. Land is in such short supply that they’re buying million-dollar homes to knock down and put up mansions, she said.

A three-bedroom house Nicholas listed for US$2-million last month received four offers from builders. It sold to an owner- occupant who paid all cash, she said.

In south Florida, 20 condominium towers with more than 3,300 units are under construction, according to Peter Zalewski, owner of Condo Vultures LLC, a brokerage and consulting firm based in Miami. Another 14,600 units are planned, about three- quarters of them for Miami-Dade County, where the crash left dozens of unfinished and failed condo projects, now mostly filled with renters, he said.

“I don’t think there’s any question that we’re in the early stages of the next great south Florida construction boom,” Zalewski said.

The conditions that have propelled prices up for the past year won’t last, said Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania.

“We’re eventually going to see mortgage rates increase, supply increase, and affordability decline, so you probably cut price gains at least by half,” Naroff said. “It will be a slowdown, not a crash.”

An open house for a five-bedroom brownstone in Brooklyn, New York, priced at $949,000 drew 300 visitors and brought in 50 offers. Three thousand miles away in Menlo Park, California, a one-story home listed for $2 million got six offers last month, including four from builders planning to tear it down to construct a bigger house. In south Florida, ground zero for the last building boom and bust, 3,300 new condominium units are under way, the most since 2007.

The U.S. spring homebuying season has been marked by a frenzy of demand fueled by the Federal Reserve’s drive to push down borrowing costs, a scarcity of listings and Wall Street’s new appetite for foreclosed homes. While values remain well below their peak, economists including Stan Humphries of Zillow Inc. and Mark Vitner of Wells Fargo & Co. assert prices in some areas are rising at an unsustainable pace — a dramatic shift from early 2012, when billionaire Warren Buffett said housing “remains in a depression.”

“It’s a big change from a year ago,” said Paul Willen, a senior economist at the Federal Reserve Bank of Boston. “You’ve gone from hearing horror stories about people losing money to hearing stories of frenzy — lots of traffic and multiple offers.”

Price Surge

U.S. home prices jumped almost 11 percent in March from a year earlier, the biggest gain since the height of the real estate boom in 2006, CoreLogic Inc. reported last week. Values are rising faster than incomes, an indication that prices may fall in some cities once higher mortgage rates erode affordability, Humphries said. Investor purchases will inevitably cool, adding another potential hit to the market, according to Vitner.

The gains in some U.S. areas aren’t sustainable for a healthy market, said Dean Baker, co-director of the Center for Economic and Policy Research in Washington.

“If prices keep going up at this rate for another six months, we will have a bubble, and people will get hurt,” he said in a telephone interview.

U.S. buyers spent three times their annual incomes on homes at the end of last year, and those properties were 15 percent pricier relative to incomes than before the housing bubble of the mid-2000s, according to data from Seattle-based Zillow. Markets such as Silicon Valley, Southern California, Boston and New York will look expensive relative to incomes when mortgage rates rise, Humphries said.

‘On Sale’

“The Fed has put every home on sale because of its actions,” Humphries said in a telephone interview. “We’re not saying you should ignore the sale sign and not pay a cheaper price. We want people to be aware of the fact that this is unusual and not bake these expectations of high appreciation into their long-term calculus.”

The average rate for a 30-year fixed mortgage was 3.42 percent last week, and reached a record low of 3.31 percent in November, according to Freddie Mac. That compares with an average rate of 6.24 percent from 2001 to 2006.

It’s too early to say another bubble is emerging. So far, the biggest gains are limited to hard-hit markets such as Phoenix and Las Vegas and thriving job centers such as San Francisco, while prices are falling in cities such as Chicago and Indianapolis, according to CoreLogic. Nationally, existing- home sales are about a third off a 2005 peak and home construction is down by 66 percent. Also, in contrast to the easy lending of the boom years, mortgage standards are strict.

Spotty Recovery

In areas such as Long Island, New York, and Omaha, Nebraska, price gains are within moderate growth levels of 3 percent to 5 percent, according to the National Association of Realtors. In other cities, demand remains stagnant and the market is far from overheated.

Homebuyers in Erie, Pennsylvania, a port on Lake Erie in the northwest part of the state, are still finding plenty to choose from, said Debra Fries, a local agent with Coldwell Banker Select. The median home price in the area fell 5 percent to $105,000 in the first quarter from a year earlier, according the Realtor group.

“We don’t have any bubbles,” Fries said. “We’re steady as a stream.”

U.S. home prices fell 35 percent from their July 2006 peak to the bottom in March 2012, and are still 29 percent off their high, according to the S&P/Case-Shiller index measuring 20 U.S. cities. Nationally, prices dropped so much during the crash that they remain about 7 percent undervalued, based on comparisons with historical prices, incomes and rents, Trulia Inc. said this week, introducing a feature on its website called “Bubble Watch.”

Eight Markets

Still, the recent price surge has made eight U.S. markets – - including Orange County, California; Houston; and Portland, Oregon — overvalued, the San Francisco-based real estate data company said.

The housing market has defied predictions of a tepid recovery by many economists. A year ago, Moody’s Analytics Inc. said prices in 2013 would climb 1.6 percent. The company revised its projections upward for each of the last six months and now expects an increase of 7.5 percent this year. Gains probably will moderate in 2014, said Celia Chen, a Moody’s housing economist who predicts a 4 percent rise as homebuilding ramps up and underwater homeowners regain enough equity to sell.

Phoenix, Atlanta

Of the 150 metropolitan areas tracked by the National Association of Realtors, 9 out of 10 showed price increases in the first quarter from a year earlier and areas such as Silicon Valley, California; Phoenix; Atlanta; and Reno, Nevada saw gains of more than 30 percent, the group said. Prices declined in 17 markets, including Edison, New Jersey; Champaign-Urbana, Illinois; and Allentown, Pennsylvania.

“This is a good spring for sellers in a hurry,” Jed Kolko, chief economist for Trulia, said in a telephone interview. “Buyer demand is stronger than we’ve seen it in years and it’s been strong enough to lift sales despite tighter inventory.”

The buying frenzy was on display at a March open house in Brooklyn, a borough of New York City where the median price rose 14 percent to $515,000 in the first quarter from the prior year as the number of listings plunged 45 percent, according to Douglas Elliman Real Estate and appraiser Miller Samuel Inc. Over two hours, 300 visitors streamed into a three-story brownstone in Crown Heights and it went under contract for more than the asking price less than a week later, said Barbara Brown-Allen, a Douglas Elliman agent who represents the seller.

Brooklyn Boom

The fear of losing out on mortgage rates that are close to the lowest on record is spurring the rush, Brown-Allen said. The up-and-coming Brooklyn neighborhoods of Crown Heights, Bushwick and Bedford-Stuyvesant have surged in popularity during the past year because buyers have been priced out of Manhattan and more exclusive Brooklyn neighborhoods, such as Park Slope and Cobble Hill, she said.

“It was a zoo — sometimes there were over 100 people in the house at a time,” Brown-Allen said. “Once the inventory is this short, you have a lot of people vying for the same properties.”

Above Asking

Even in markets like Boston, where CoreLogic put home-price gains at a moderate 8 percent in March, demand is high. Often, homes spend only one day on the market, said Cliff London, a broker with the RE/MAX Home Team in the suburban town of Needham, Massachusetts.

“By the time the first open house is over the offers are coming in, sometimes above asking price,” London said. “There’s a lack of quality inventory — that’s fueling it.”

In much of the country, inventory has been drained by institutional investors such as Blackstone Group LP and Colony Capital LLC buying single-family homes, often foreclosures, to turn into rentals, said CoreLogic Chief Economist Sam Khater.

Blackstone, the largest buyer in the U.S., spent more than $4 billion on 24,000 rental properties last year. The company recently bought 1,400 residences in Atlanta, the biggest bulk deal for the fledgling homes-for-lease industry. Such purchases helped to drive prices up 12 percent in March from a year earlier in Georgia, where values only rose 1.2 percent six months earlier, Khater said.

Moderating Prices

Appreciation in Arizona is moderating as investors look in other markets for better yields, Khater said. Prices in the state rose 17 percent in March from a year earlier compared with a 20 percent increase in September 2012, he said.

Vitner of Wells Fargo said investors are buying properties as quickly as they can and when they leave, housing will take a hit. Investors accounted for 19 percent of sales in the U.S. in March and even more in some former bubble markets, according to the National Association of Realtors.

“The problem is if they don’t earn a high enough return, they all walk away,” Vitner said. “Investors accounted for a larger proportion of the housing recovery than people realize.”

While the tightness in the existing-home market is driving up sales for new homes, homebuilders can’t increase production fast enough because of labor shortages and rising competition for lots in the best locations. There were 153,000 new homes available for purchase in March, just 10,000 more than a five- decade low in mid-2012.

Not Done

In Menlo Park, builders are selling houses long before they’re completed, said Keri Nicholas, a Realtor with Coldwell Banker in the affluent Silicon Valley town. Land is in such short supply that they’re buying million-dollar homes to knock down and put up mansions, she said.

A three-bedroom house Nicholas listed for $2 million last month received four offers from builders. It sold to an owner- occupant who paid all cash, she said.

In south Florida, 20 condominium towers with more than 3,300 units are under construction, according to Peter Zalewski, owner of Condo Vultures LLC, a brokerage and consulting firm based in Miami. Another 14,600 units are planned, about three- quarters of them for Miami-Dade County, where the crash left dozens of unfinished and failed condo projects, now mostly filled with renters, he said.

“I don’t think there’s any question that we’re in the early stages of the next great south Florida construction boom,” Zalewski said.

The conditions that have propelled prices up for the past year won’t last, said Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania.

“We’re eventually going to see mortgage rates increase, supply increase, and affordability decline, so you probably cut price gains at least by half,” Naroff said. “It will be a slowdown, not a crash.”

In fact, you too would be able to afford the kind of digs reserved for the rich and famous — especially since big-name celebs have their Manhattan dreamhouses on the market right now.

Maybe you’d like Madonna’s palatial Central Park West duplex (current listing price: $19.95 million) or maybe hip-hop mogul Russell Simmons’ Financial District two-level home is more your style.

The New York City homes of celebrities can range from a few million dollars to the tens of millions. On average, the sales price in the high-end luxury market was $5 million during the first quarter of this year.

But buyers don’t have to shell out extra money for a place once owned by a boldface name.

“It doesn’t ensure some sort of premium,” said Jonathan Miller, a real estate appraiser. “And if there is, it would probably be modest. It’s more about the property.”

If you should find yourself suddenly able to afford a celebrity’s apartment, it may be best to act fast.

Leonard Steinberg, managing director at Douglas Elliman, who has had celebrity clients, said a famous face attached to a property could attract publicity to a listing.

“It certainly can provide a good provenance to the building,” said Steinberg. “There’s definitely a vast interest level these days in anything related to a celebrity.”

Built in 1839, the 22.5-foot-wide home has only been owned by only three families over its 175-year life. Its most famous owner, John Philip Sousa, invented the sousaphone and penned marching ballads, including Marine marching standard “Semper Fidelis” and “The Stars and Stripes Forever,” and was also a committed technophobe. “These talking machines are going to ruin the artistic development of music in this country,” he testified to Congress in 1906, presaging the rise of Skrillex.

The most recent owners are the Raineros; Gildo Rainero purchased the property in the 1960s. Though he carved into nine apartments, the house has been stitched back together over time and then some. The developer, Gildo’s grandson William Rainero, has added a story to the house, and hired Clodagh Design to redo the interiors, with stone, exposed brick, steel and plenty of glass. While the front face of the house is for the most part still the 19th century Georgian style you’d expect from the Village, the back is nearly all glass.

The property is now listed with Town for $28.9 million, a number that was gradually lowered from last year’s $31.5 million ask. (While the property is Town’s most expensive listing in Manhattan, it won’t be the most expensive in Greenwich Village: that honor belongs to 11 West 10th Street, appraisal guru Jonathan Miller tells us, which sold for $34.5 million in 2007, at the height of the last bubble.)

In terms of amenities, the house is no slouch. While most townhouses have only a single kitchen, this one has four—the normal one plus a catering kitchen and two outdoor cooking spaces—including one designed by New York-by-way-of-Florence restaurateur Silvano Marchetto. There’s also a 700-bottle wine cellar and an espresso maker built into the wall (why not?). Plus, it includes all the normal things you’d expect from an eight-digit townhouse—a lounge, a screening room, a full-floor master suite, a zen garden and a roof deck—plus some things you wouldn’t, like views of both One World Trade Center and the Empire State Building. Not to mention the coal chute that’s been repurposed into a stone-faced waterfall.

It’s time to share my Three Cents Worth (3CW) on Curbed NY, at the intersection of neighborhood and real estate in the capital of the world…and I’m here to take measurements.

Check out today’s 3CW column on @CurbedNY:

I thought I’d take a look at price growth between the Manhattan rental market and sales market over the past decade. I am struck by how many of us have the default view that these two markets always move in opposite directions, myself included. In other words, if rental prices are rising, sales prices must be falling and vice versa. I trended the year-over-year change in median rental price and median sales price over the decade. I also inserted significant US housing milestones along the way but left out the ’13 launch of Iron Man 3…

[click to expand chart]

Today’s Post: Three Cents Worth: Manhattan Sales, Rentals Not Opposites [Curbed]
Three Cents Worth Archive Curbed NY
Three Cents Worth Archive Curbed DC
Three Cents Worth Archive Curbed Miami

Landsmith LP paid $32.5 million this month for 250 Houston-area houses that were built last year. The firm, which began buying properties to rent in 2009, has 2,000 lots for new homes under contract and expects to purchase a total of 4,000 new houses this year, according to San Francisco-based Chief Executive Officer James Breitenstein.

Just as investors flocked to Atlanta after picking through foreclosures in Phoenix, they’re now seeking deals from builders who want to lock in sales or sell property quickly. The appeal of buying newly-built homes that are typically more expensive than repossessed ones is growing as the number of borrowers facing foreclosure falls to the lowest level since 2008 and after prices of bank-owned properties was driven up by Blackstone Group LP (BX), Colony Capital LLC and other private-equity firms snapping up tens of thousands of houses.

“A big part of our business plan is to execute this strategy,” Breitenstein said in a telephone interview. “It’s a way to control your pipeline and not have to fight with the herd.”

The share of mortgages in foreclosure, meaning the lender filed to repossess the property, fell to 3.55 percent in the first quarter from 4.39 percent from a year earlier, the lowest in four years, according to a Mortgage Bankers Association report last week.

Dwindling Supply

“The dwindling supply of such properties may be cause for concern among some institutional investors whose residential business models depend crucially on being able to snap up these bargains,” Paul Diggle, an analyst with Capital Economics Ltd. in London wrote in a note after the Mortgage Bankers report.

Demand from rental investors may bolster some homebuilders, which have rallied 22 percent this year and more than doubled since the end of 2011. Steve Eisman, who rose to fame betting against subprime mortgages during the housing crash, said last week that investors should buy shares of builders and land as the housing market strengthens.

“While homebuilders are cheap, they have not priced in how much fundamentals have improved,” Eisman, founder of Emrys Partners LP, said at a conference in New York.

New home sales also have “higher economic multipliers and local impact relative to existing home sales,” Sam Khater, deputy chief economist with CoreLogic Inc., wrote in a newsletter published today. “For example, the sale of every new home requires the equivalent of five full-time jobs for 12 months.”

Capital Starved

Builders selling to Landsmith have mostly been capital-starved smaller operators, according to Breitenstein, rather than publicly-traded companies such as D.R. Horton Inc. or PulteGroup Inc. (PHM) Other investors have bought small numbers of houses from the largest builders.

American Homes 4 Rent, a Malibu, California-based company headed by Public Storage founder B. Wayne Hughes, bought from Lennar Corp. (LEN), KB Home and M/I Homes Inc. in Florida’s Hillsborough County, according to property records.

Blackstone, which has acquired more than 24,000 houses over the past year, bought five Lennar homes in Hillsborough County since September. The new houses, which sold for $200,000 to $257,000, are in areas with low crime and good schools and can make money from rent or price appreciation, according to Eric Elder, spokesman for Invitation Homes, Blackstone’s single-family rental division.

“It was an opportunistic buy,” Elder said in a telephone interview. “It’s not a specific bullet point in our strategy.”

Vegas Houses

American Residential Properties Inc. (ARPI), a Scottsdale, Arizona-based rental company that raised $288 million in an initial public offering last week, bought 21 to-be-built Las Vegas houses last year from William Lyon Homes (LWHS), the last of 325 lots in a subdivision that opened in 2003.

“If we can make the numbers work, we’ll look at that the way we look at any other opportunity,” American Residential Chief Operating Officer Stephen Schmitz said in a telephone interview.

Wall Street-backed investors began buying single-family rental homes in the last few years after prices plunged more than a third from the 2006 peak and more than five million homeowners lost property to foreclosures, bringing institutional capital to what has been a mom and pop industry.

‘Massive Supply’

While low prices and record-low interest rates have made homes more affordable, many potential buyers are unable to get a mortgage because they don’t have money for a down payment or lack high enough credit scores to borrow. The U.S. homeownership rate dropped to 65 percent in the first quarter, down from 69 percent in 2004 and the lowest rate in 17 years, according to Commerce Department data. For people younger than 35, an age group when families begin raising children and buying home, the ownership rate fell to 37 percent last year from 43 percent in 2004.

“The massive supply of homes coupled with the significant drop in prices create an opportunity for investors to acquire homes at significant discounts while delivering housing solutions for many displaced residents,” Colony American Homes, the rental division of Thomas Barrack Jr.’s investment firm, said in a regulatory filing.

Colony has raised $2.2 billion and acquired more than 9,500 homes in eight states as of April 21. The average house was 26 years old, 1,760 square feet (164 square meters) and cost $159,000.

Highest Yields

Las Vegas; Indianapolis, Indiana; and Orlando, Tampa and Jacksonville, Florida, have the highest yields on rentals according to a report last month by Goldman Sachs Group Inc. Those yields are higher on foreclosed homes, which typically sell at a 30 percent discount to other properties, according to the report. In Las Vegas, for example, the yield on bank-owned properties is 8 percent compared to 6.2 percent for other rentals, after factoring in vacancy rates and costs, such as taxes and insurance.

The median resale home price in 150 U.S. cities jumped 11.3 percent in the first quarter to $176,600, the biggest price rise in seven years, the National Association of Realtors reported May 9. Prices soared 31 percent in Atlanta, 30 percent in Phoenix and 27 percent in Las Vegas, the real estate group reported from Washington.

The largest rental investors have bought faster than they can find tenants. Only 55 percent of Colony’s homes, most of which were purchased within the last six months, were leased, according to a regulatory filing this month.

Assembling Portfolios

Landsmith has specialized as a mid-sized player in the single-family rental industry, buying homes for itself and assembling portfolios of as large as 200 leased-up properties that it sells to larger investors. The company is in the process of closing deals this month to buy 87 rentals in Raleigh, North Carolina, for $5.1 million and 118 homes in Nashville, Tennessee, for $11 million.

It paid an average $130,000 for the 250 Houston-area homes, Breitenstein said. The rentals are sprinkled around 12 communities where builders sold most of the houses to owner occupants, he said.

The new houses have low maintenance costs and are more efficient to manage than more scattered properties, Breitenstein said. About 98 percent of the Houston residences are already leased for $995 to $1,500 a month, according to an offering memorandum obtained by Bloomberg News. Tenants are willing to pay a premium of $50 to $100 a month to occupy a brand new home, according to Breitenstein.

‘Smell New’

“They like the smell of new,” he said.

While fewer bank-owned properties are coming to market, the number of new homes for sale has increased — slowly — rising 5 percent from a year earlier to 153,000 in March, according to Commerce Department data. That compares with a high of 572,000 in July 2006.

The new homes sold for a median $247,000, up 3 percent from a year earlier. Average prices rose 9.3 percent at Lennar, 10 percent at PulteGroup and 14 percent at D.R. Horton during the companies’ most recent quarters as they emphasized improving profit margins over sales volume.

“Our goal is improve the bottom line better than we improve the top line,” D.R. Horton CEO Donald Tomnitz said during an April 26 earnings call.

Builders sell houses to Landsmith at a discount compared with owner occupants, because they don’t have to pay real estate broker fees and it’s easier to raise project financing if a large number of sales are guaranteed, Breitenstein said.

‘Bullet-Proof’

“We help builders by giving them a bullet-proof takeout,” said Breitenstein, who declined to name the builders to keep his competitive edge.

Building new homes to sell to landlords was a viable option in markets such as Charlotte, North Carolina, a year or two ago, according to John Burns, chairman of John Burns Real Estate Consulting. The opportunity to build new homes as rentals may have passed as land, lumber and labor prices rise and more buyers seek new houses amid a tight supply of existing homes, he said.

More Sense

“Today, it makes way more sense to sell,” Burns said in a telephone interview from Irvine, California.

Beazer Pre-Owned Rental Homes Inc., a venture formed by private-equity firm KKR & Co. and Beazer Homes USA Inc., started last year with a portfolio of 190 houses in Phoenix and Las Vegas, hasn’t been able to find new houses to rent that fit its criteria, according to CEO Patrick Whelan.

“It’s harder to make the math work on new houses to rent, and they are often located in inferior submarkets,” Whelan said in a telephone interview from his office in Scottsdale, Arizona. “Buying for less than replacement cost is a key metric we focus on. Obviously, if you’re buying new, you’re buying at full cost, including builder margin.”

Last year, builder Hovnanian Enterprises Inc. and its investor GTIS Partners debated whether to sell or rent units in Vistabella, a 70-unit townhouse community in Boynton Beach, Florida. They opted to sell, a decision that’s been vindicated, according to GTIS Chairman Tom Shapiro.

Debate Over

“I’d say the debate’s over now given what’s happened in the for sale market,” Shapiro, whose New York-based firm has $2.3 billion under management, including 5,000 rental homes and 30,000 lots, said in a telephone interview. “Had rents kept increasing and prices stayed low, I think we could’ve gotten there. Today, I don’t think it will be your best economic option.”

The economics of building to rent depend mostly on the price of lots, which Landsmith tries to keep below 25 percent of the final costs, Breitenstein said. Ready-to-build lots in Texas markets, such as Houston, are about 20 percent of the cost of a home, compared with as much as 50 percent in coastal California markets, according to Jeff Meyers, a housing consultant with Beverly Hills, California-based Kennedy-Wilson Holdings Inc.

“In Texas, the land isn’t such a big component,” Meyers said in a telephone interview.

Landsmith started tying up land in 2008 and 2009, when prices had plunged to pennies on the dollar, buying foreclosed subdivisions from banks and builders who ran out of cash. For now, it makes financial sense to keep some of the new houses as rentals.

“The key is executing quickly enough and moving fast enough,” he said. “In a year or two, this might not work.”

At the same time, those who arrived last year or the year before, face their own dilemma — to look for a new place or stay put, as their leases expire en masse.

For rental brokers, this is a time to clean up, or make up for a slow winter. But this year things are different.

Rent rates have remained flat and existing tenants facing some of the lowest vacancy rates in years, are choosing to renew their leases rather than risk a very tight rental market.

In the past, owners who had a turnover of 10% a year, now have “close to zero,” said Marc Lewis, chairman of AC Lawrence.

“This is unheard of in Manhattan. Normally this is the time of year that leases come up. Usually there is a glut of inventory. With this in mind, tenants at the end of their leases should take a close look at the market and their options before committing to making a move,” he said.

Manhattan’s vacancy rate for the month of April was a paltry 1.58 percent, below the average over the past five years, according to Miller Samuel Inc. and Douglas Elliman. The Upper East Side has the lowest vacancy rate at 1.04 percent.

Rental prices are up 6.5 percent over last year, but were virtually unchanged from March, according to Douglas Elliman. Because of low vacancy leading to limited options for tenants, landlords have decided to continue to be stingy with doling out concessions.

Douglas Elliman reported that only 4.7 percent of all leases signed through the brokerage in April had any kind of concession, while Citi Habitats reported that number to be slightly higher at 9 percent.

As far as prices are concerned, three bedroom apartments are the units that have seen the biggest price jump since last month, from $4,949 a month for leases signed in March, to $5136 a month on average for those signed in April, according to Citi Habitats.

Two bedroom apartments in elevator buildings were also up more than the rest, jumping 3.3 percent, or $100 dollars more from March to April, according to AC Lawrence.

Although, they still have lower overall prices, Harlem and Washington Heights were the areas that saw the highest percentage jumps from March to April. The average price for a rental uptown rose by 13.2 percent, the highest in Manhattan, according to Miller Samuel Inc.

In Harlem, the average rental price has gone up more than 18 percent since 2012, while the number of new rentals has dipped by 41.7 percent since last year.

That is leading to limited low-cost options for those looking to move, putting landlords in the drivers seat.

Brokers are reporting that the landlords’ market is leading to some of the largest rent increases for existing tenants they have seen in a while.

“In the past, it was very common for an owner to give a ‘home discount’ to an existing tenant,” said Lewis. “They thought it was better to not have a vacancy as the loss of rent and painting and cleaning cost was not worth the increase.

“Now, with rents up as much as 30% in the past five years, owners are in many cases asking for full rents on renewals. Tenants don’t really have many options so they are paying 10-30% more to stay put.”

“It’s consistently one of the most coveted things in the apartment,” says Kelly Mack, president of Corcoran Sunshine. “It’s a rare opportunity to step outside your door, enjoy a moment of peace and serenity. In large-scale towers, outdoor space is even more difficult to find and people are really willing to pay up for it and pay a significant premium.”

How much of a premium?

Exterior space trades at somewhere between “25 to 50 percent” of the interior price per square foot, says Jonathan Miller, president and CEO of the appraisal firm Miller Samuel.

So if you have an apartment with interior space that’s valued at around $2,000 per square foot, 1,000 square feet of outdoor space can add somewhere between $500,000 and $1 million to the price of the residence.“The increase,” adds Miller, “represents the greater functional utility of the space.”

Click here for our top outdoor picks.

By this, Miller means that an undivided 1,000-square-foot terrace is probably worth more than four 250-square-foot terraces because the former is more useful.

Properties with outdoor space are difficult to land. “Outdoor space is one of those things you’d pay a premium for because it’s usually either a penthouse apartment or ground-floor garden,” says Shaun Osher, CEO of Core.

Rare or not, there’s no question that there’s been an uptick in units with outdoor space that have traded in the last decade.

“In 2000, about 9 percent” of apartments sold had terraces, Miller says. “In 2012, it’s closer to 12 percent.” Apartments with balconies and gardens have also been selling. “Another way to look at this is, it’s now roughly one out of four sales that has some sort of outdoor space — terrace, garden, balcony, patio. Twelve years ago it was roughly one out of five.”

And when developers run out of units with private outdoor space, they tout their building’s common courtyards or landscaped roof decks — for instance, the forthcoming 150 Charles St. features a good 40,000 square feet of green space. At 455 W. 20th St., the condo building within the grounds of the General Theological Seminary, there’s a block-long enclosed garden that looks like something out of Oxford. Buildings like the Schumacher, at 36 Bleecker St., bandy about the names of their courtyard designers (the Schumacher tapped Ken Smith, who did MoMA’s roof garden). Each of these new developments is selling condos for well over $2,000 per square foot, making them some of the most expensive real estate in the city.

But whether it’s a still-under-construction super-pad or something already built, the city offers some outstanding options for those who want to get outdoors.

We recently released the market reports we prepare for Douglas Elliman covering the The Hamptons and North Fork.

This is part of an evolving market report series I’ve been writing for Douglas Elliman since 1994.

Key Points

HAMPTONS 1Q 2013

• Listing inventory continued to fall.
  
• Number of sales surged.
  
• Number of sales in excess of $5M dropped as many high end buyers rushed to close at the end of 2012.
  
• Limited supply beginning to apply upward pressure to stable markets.
  
• Credit remains tight, restraining supply from entering market, no urgency to list.
  
• Record low mortgage rates and release of pent-up demand keeping demand strong.
  
• Less high end sales as tax-incentivized buyers rushed to close at the end of 2012.
  
  

NORTH FORK 1Q 2013

• Housing prices up in all segments except for top quintile due to tax-incentivized rush at end of 2012.
  
• Number of sales fell and listings rose.
  
• Days on market expanded.
  
  

Here’s an excerpt from the 1Q 2013 report:

HAMPTONS…After an unprecedented year end surge in high end closings motivated by tax planning purposes, the first quarter Hamptons housing market saw an unusually low level of high end sales despite a year-over-year increase in total sales. As a result, the price indicators reflected declines, when in fact the housing market was not experiencing falling prices…

NORTH FORK…Sales activity in the first quarter of the North Fork housing market was somewhat weaker than the same period a year ago as the prior quarter “poached” some activity at the close of 2012. Price indicators were generally higher, but sales were lower and inventory was above prior year levels…

You can build your own custom data tables on the market – now updated with 1Q 13. While we haven’t built separate chart galleries for each market yet, you can browse our chart library.

The Elliman Report: 1Q 2013 Hamptons Sales [Miller Samuel]
The Elliman Report: 1Q 2013 North Fork Sales [Miller Samuel]
The Elliman Report: 1Q 2013 Hamptons Sales [Douglas Elliman]
The Elliman Report: 1Q 2013 North Fork Sales [Douglas Elliman]
Market Chart Library [Miller Samuel]
Aggregated Custom Market Data Tables [Miller Samuel]

We published our report on the Long Island sales market for 1Q 2013.

This is part of an evolving market report series I’ve been writing for Douglas Elliman since 1994.

Key Points

1Q 2013

• Lowest first quarter listing total in a decade.
  
• Signed contract volume jumped from year ago levels.
  
• Housing prices remained generally stable, indicators mixed.
  
• Limited supply beginning to apply upward pressure to stable markets.
  
• Credit remains tight, restraining supply from entering market, no urgency to list.
  
• Record low mortgage rates and release of pent-up demand keeping demand strong.
  
• Less high end sales as tax-incentivized buyers rushed to close at the end of 2012.
  
  

Here’s an excerpt from the 1Q 2013 report:

…The lack of supply and rise of contract activity continued to define the Long Island housing market. Listing inventory fell to the lowest first quarter level seen in a decade as pending sales continued to rise. Despite the tightening of the market, overall price indicators remained mixed. The number of listings in inventory at the end of the first quarter fell 24.8% to 15,303 as compared to the same period last year, a ten year first quarter low…

You can build your own custom data tables on the market – now updated with 1Q 13 data. Check out the charts by browsing in our chart library.

The Elliman Report: 1Q 2013 Long Island Sales [Miller Samuel]
The Elliman Report: 1Q 2013 Long Island Sales [Douglas Elliman]
Market Chart Library [Miller Samuel]
Aggregated Custom Market Data Tables [Miller Samuel]

We recently completed the 1Q 2013 South Florida market report series for Douglas Elliman. These markets include Miami, Boca Raton, Fort Lauderdale and Palm Beach.

Had a fun interview with Tom and Sara this morning on the always MUST watch/listen Bloomberg Surveillance. We talked housing, rentals, vacancy and inventory. An added bonus was the addition of Adam Davidson – co-founder and co-host of Planet Money as guest anchor. I’m a huge fan of his show. Even bought their t-shirt last week through Kickstarter.

More importantly, I’m still the mayor of the Bloomberg Cafeteria on FourSquare.

Douglas Elliman JUST published their Manhattan/Brooklyn rental report. This monthly report is part of an evolving market report series I’ve been writing for Douglas Elliman since 1994. We discontinued the quarterly rental report series but still present the information in our aggregate database.

MANHATTAN

• Rents continue to press higher. 2013 annual growth on par with 2012.
  
• Rate of rental price growth consistent across all unit sizes.
  
• Limited use of landlord concessions remain.
  
• Vacancy rate below 5-year average, same as year ago.
  
• Stabilizing number of new rentals suggest more balance between landlords and existing tenants.
  
  

BROOKLYN
[North, Northwest Regions]

• After a fast start in 2013, rental price growth slowed – not clear if a trend.
  
• Declining days on market in new year reflects quick pace.
  
• Number of new rentals continued to slow.
  
• Tight mortgage lending conditions keeping pressure on rental market.
  
• Slow improvement in regional economy keeping rents rising despite record low mortgage rates.
  
  

Here’s an excerpt from the report:

MANHATTAN…Median rental price jumped 6.5% to $3,195 from the same period last year, but was unchanged from the prior month. The average year-over-year increase in median rental price has been rising since the beginning of 2013 averaging 5.1% year to date. The average rate of rental price growth is consistent with the 2012 average rate of 5.3%. The year-over-year increase in median rental price across all size categories was remarkably consistent in April…

BROOKLYN…The number of new rentals increased 10.9% above prior year levels, the third lowest annual increase in a year. This metric can be seen as a barometer of tenant resistance to lease renewal rates offered by landlords. Lower new rental growth reflects more tenants re-signing their leases at renewal. After an aggressive series of rental price increases in 2012, landlords have been easing rate increases and tenants have better adjusted to the high rent environment…

The Elliman Report: 4-2013 Manhattan/Brooklyn Rentals [Miller Samuel]
The Elliman Report: 4-2013 Manhattan/Brooklyn Rentals [Douglas Elliman]
Miller Samuel Aggregate Database [Miller Samuel]
Chart Gallery (Brooklyn Monthly) [Miller Samuel]
Chart Gallery (Manhattan Monthly) [Miller Samuel]
Chart Gallery (Manhattan Quarterly) [Miller Samuel]

It’s time to share my Three Cents Worth (3CW) on Curbed NY, at the intersection of neighborhood and real estate in the capital of the world…and I’m here to take measurements.

Check out today’s 3CW column on @CurbedNY:

Since Manhattan sales are fairly heavy right now—basically we’re at High Noon of the annual housing market cycle—I wanted to look at how important spring is to the market and explore how housing sales patterns have changed over the past few decades. I plotted the sales market share for each quarter and separated them into their own charts. For example: 2Q 2012 (last year’s spring market) had sales that represented 25.2 percent of all sales for 2012. I then applied a trend line to each quarter to cut through the volatility. The four quarters (sort of) correlate with the four seasons…

[click to expand chart]

Today’s Post: Three Cents Worth: Manhattan Sales Wave More of a Bell Curve [Curbed]
Three Cents Worth Archive Curbed NY
Three Cents Worth Archive Curbed DC
Three Cents Worth Archive Curbed Miami

Absorption defined for the purposes of this chart is: Number of months to sell all listing inventory at the annual pace of sales activity. (The definition of absorption in my market report series reflects the quarterly pace – nearly the same)

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. The blue line showing the 10-year quarterly average travels up and down because of the change in scale caused by some of the significant volatility seen at the upper end of the market. The pink line represents the overall average rate of the most recently completed month.

Side by side Manhattan regional comparison:

[click images to expand]

The market pace continues to be brisk below the $3M level (incidentally that accounts for 90% of the market).

Manhattan Market Absorption Charts 2013 [Miller Samuel] Manhattan Market Absorption Charts 2012 [Miller Samuel]

Just catching up here on Matrix – had a great visit with Christine Romans on CNN’s Your Money a week ago. Also go to meet Rana Foroohar, Assistant Managing Editor at Time Magazine (sitting next to me but not in the clip) who interviewed me for her column “The Housing Mirage. Good stuff.

Nothing better confirms Sassen’s observations than Miami’s rapidly ascendant real estate market. Hard-hit by oversupply and underfinancing after the 2008 crash, Miami has not merely survived, but is now thriving at record levels.

Last summer, a 10-bedroom/30,000 sq ft compound on Miami’s Indian Creek Island sold for a record $47m; while in March, US “infomercial” entrepreneur Ajit Khubani reportedly paid $34m for a 16,000 sq ft penthouse at developer Ian Schrager’s 26-unit Miami Beach Edition project – a record for a Florida condominium. An 18,253 sq ft penthouse is now on sale for $50m at nearby Faena House, where 45 condominiums are being designed by Foster + Partners, and a 17,000 sq ft penthouse on top of South Beach’s 10-year-old south tower of Continuum is now listed for $39m.

“Unlike before the recession, luxury Miami developers are building far fewer ‘mass-market’ projects with hundreds or even thousands of units,” says Peter Zalewski, of local property consultancy Condo Vultures. “They’re focusing on maximum pricing rather than maximum capacity.”

Such figures represent the top end of the Miami market but prime property values have grown at all levels, from Atlantic-front South Beach across to Downtown and the Miami Design District, northward to Mid-Beach and up to Sunny Isles Beach. Indeed, agent Knight Frank says high-end Miami real estate prices rose by 19.5 per cent last year – the highest in North America and the fourth highest in the world, after Dubai, Bali and Jakarta.

Prime Miami real estate (defined by Knight Frank as the top five per cent of the market) now averages between $1,300 and $1,440 per sq ft, with average sector condominiums now $1.57m and single-family homes $2.02m, according to a mid-April report by Douglas Elliman Real Estate. The firm says Miami’s high-end market begins at $730,000 for condominiums, and $850,000 for single-family homes.

Already costlier than metropolises such as Tokyo or Mumbai, Miami prices are predicted by Knight Frank to grow by five to 10 per cent this year as more buyers enter an increasingly shrinking premium property pool. map of Miami, Florida

Although domestic buyers, particularly New Yorkers, have shown interest in the highest-end projects such as Faena House and Edition, foreign buyers – notably Brazilians, Argentines and Venezuelans – remain the strongest players in Miami. Last year, foreigners comprised some 60 per cent of the city’s total market, according to the Miami Association of Realtors.

“Certain key prime markets have bounced back stronger than ever and Miami is one of them,” says James Price, Knight Frank’s head of international residential development. “Aided by international buyers, the level of [over]supply that had brought the market down has completely reversed itself.”

A recent report by realtor Douglas Elliman found that Miami’s property inventory shrunk 12.5 per cent in the first quarter of 2013 compared with 2012 – and a full 30 per cent from 2011. The number of distressed properties – the short-sales and foreclosures that dominated recession-era sales – fell nearly 25 per cent from last year and almost 50 per cent since late 2010.

Today, says Ron Shuffield, head of Christie’s affiliate EWM Realty International, Miami’s property inventory hovers between four and six months, well below the nine to 12 month threshold required to maintain market health. “Building in Miami came to a near-halt for almost five years,” he says. “We have a substantial number of projects being built but they’re still two to three years from completion.”

According to CVR Realty, across South Florida nearly 125 towers with 17,700 units are either under construction or in the development stages – nearly half in Miami itself.

As in New York, Miami developers are associating many of their highest-end projects with top architects: Foster’s Faena House, John Pawson at Edition, Denmark’s Bjarke Ingels at the Grove at Grand Bay, Mexican Enrique Norten at South Beach’s One Ocean and 321 Ocean, Zaha Hadid’s One Thousand Museum and Herzog & de Meuron at Jade Signature.

Developers are also thinking bigger: units at Hadid’s building will reportedly start at roughly 4,500 sq ft, while apartments at Norten’s One Ocean average roughly 3,000 sq ft. “Buyers want larger spaces; simpler spaces that are functional from moment one,” says Edgardo Defortuna, founder of Fortune International, which is building Jade Signature. “Adding a name like Herzog & de Meuron takes it to the next level” – and adds roughly 20 per cent to the price.

With dozens of new projects now in development and apartments at Edition and Faena now topping $3,000 per sq ft, Miami’s undersupply could shift into overabundance – or at least overpricing. “The ingredients and conditions are certainly there for another bubble,” says Condo Vulture’s Zalewski. “Two-thirds of all Miami sales are still under $300,000, so it’s hard to see the highest prices continuing to appreciate at such rapid rates.”

Yet with prices still 37 per cent below their pre-recession peak, local agents say Miami may even be undervalued – at least compared with premium markets in London, Hong Kong or New York. Meanwhile, bank financing has now become far scarcer across the US, helping Miami’s market to develop what Shuffield calls “its own set of checks and balances” to ensure new projects remain solvent. “The bulk of new condo buyers are purchasing in cash – with deposits of 50 to 70 per cent. These new terms are giving the market far greater stability.”

In both markets, the number of new rentals (i.e. tenants who decided to not renew their leases) slowed down. “I see this metric as a measure of resistance to a landlord’s rent increase at renewal,” says Miller. “I think landlords and tenants are becoming a bit more in sync on high rents, and more tenants are signing renewals than they were before.” Basically, tenants are starting to face the facts: rents are high everywhere, so why go through the hassle of finding a new apartment when the rent won’t be any lower? Plus, Miller says that landlords are “realizing that they need to reduce some of the churn in recent months,” so they are more favorable to renewals.

The drivers of high rents remain the same. “Rising employment and tight credit,” explains Miller. These factors are “tipping people back into the rental market even though they would have normally purchased, but don’t qualify.” Still, Miller notes that it’s somewhat surprising that the rental market is still strong when the purchase market is also strong: “The improvement in the regional economy probably isn’t being given enough credit (sorry—no pun intended).”

The Brooklyn market remains tight, with the average days on the market falling from 76 days in March to just 37 in April. Last April, it was at 52 days. In Manhattan, the vacancy rate, which Miller notes is a better measure of availability than inventory, is unchanged from the same time last year, thus it’s still below the five year average. The East Side continues to see the lowest vacancy rate; at 1.04 percent, it’s down a smidge from last year. Across the park, the West Side saw the highest vacancy rate at 2.2 percent.

Landlord concessions remain unchanged; they still barely exist. Less than five percent of transaction included a concession, and even then, it was only about equal to about 1.1 months of rent. Long-gone are the good ol’ days when two to three months free rent was offered are nearly half of all leases.

Market reports being released on Thursday showed a low vacancy rate and a tight inventory. The average rent in Manhattan rose by $139 to $3,367 a month in April, compared with March, a one-month increase of 4.3%, according to a report by Citi Habitats, a brokerage firm that represents many renters.

“It is going to be more difficult to find a desirable apartment,” said Mark Menendez, the director of rentals at Douglas Elliman. “There is a lack of inventory and a huge demand.”

The tight market, he said, is in turn leading many renters to renew leases with their current landlords, or request extensions so they can look for new apartments later in the year. This will lead to further tightening of the market.

Rents normally drift lower during the fall and winter, and rise modestly in the spring and summer with the end of the school year, when many new college graduates move to the city, and when families with children prefer to relocate.

But as the economy recovered from the financial crisis over the last few years, rents rose significantly. They hit a record in August of $3,461 a month, according to Citi Habitats, and since then fell to a low of $3,211 in January, a drop of 7.2%, raising questions about whether rents would remain low in the spring.

Gary Malin, the president of Citi Habitats, said that last year landlords had raised rents faster than incomes were rising, and there was a pushback from tenants.

Now after that pause, “we are starting to see that rents are starting to go up,” he said. “There is no weakness in the market at all,” with rentals showing a “very strong” performance throughout Manhattan, according to Mr. Malin.

Mr. Malin attributed this to a strengthening economy, including an increase in corporate relocations from other parts of the country so far this year, compared with the same period last year.

Shawna Aschmies, a Citi Habitats broker, said with inventory so tight, she was advising some past clients to try to extend their leases for a few months to see whether more apartments come on the market later in the year, others were giving up on Manhattan, and finding more space for less money in Brooklyn or Queens.

A few weeks ago, she found a $3,100 a month two-bedroom apartment in the East Village for Marie Clare Brush, a fashion designer, and her roommate, a software engineer.

But the apartment was small, and had only one bathroom, so they kept looking.

Now Ms. Brush said that with help from Ms. Aschmies she found a bigger apartment—with a new kitchen with stainless-steel appliances, two bathrooms and several skylights—for $2,800 a month in Greenpoint, Brooklyn. It was farther from the subway than she would have preferred.

“It is slim pickings,” Ms. Brush said. “You have to decide what you can compromise on and what you can’t compromise on. You have to keep your options open and look at neighborhoods that aren’t generally known. “

Jonathan Miller, president of appraiser, Miller Samuel Inc., said that this year landlords have been less aggressive in raising rents for their existing tenants, resulting in more tenants renewing leases, leaving fewer apartments available on the market.

The tight market was also driven by rising employment, slowly improving economic growth, Mr. Miller said.

He said that the renters who want to buy rather than rent, will find little relief in the sales market: Sales inventory is at a 12-year low, and credit conditions remain very tight.

The median rent for a Manhattan apartment in April was $3,195 per month, a 6.5 percent increase from $3,000 per month in the same month last year, a report from Douglas Elliman shows. In April, there were 4,287 rental transactions in Manhattan, up 1.4 percent from a year earlier.

Meanwhile, the vacancy rate in Manhattan dropped to 1.28 percent, a 12 percent decline from the 1.46 percent rate in March, numbers from Citi Habitats show.

“It’s going to make for a very competitive summer,” said Gary Malin, president of Citi Habitats, the city’s largest brokerage. “You will see a vacancy rate sub 1 percent very soon.”

The reason continues to be that constrained supply in the sales market and tight restrictions on mortgage lending are keeping certain would-be buyers in the rental market longer, said Jonathan Miller, president of appraisal firm Miller Samuel and author of Elliman’s report, adding that this year is “on par” with a “robust” 2012.

“It’s somewhat surprising, because sometimes rental and sales markets move in opposite directions, and in Manhattan they are both moving up,” he said.

And, heading in to the busy summer rental season, the price increases and tight supply show no signs of letting up, particularly for apartment hunters interested in smaller unit types Downtown.

“We’re moving into the meat of the market,” said Mark Menendez, Elliman’s director of rentals, who predicted a summer of slow but steady price increases.

Demand for studios Downtown — particularly in the West Village and mostly from newcomers to Gotham — is the major force in the Manhattan rental market at the moment, Menendez said.

In March, average prices for studios showed the steepest rent increase, Citi Habitats’ figures showed, and April was no different. The average rent for a studio was $2,048, up 3 percent from a month prior, when the figure was $1,986, per Citi’s report.

“The majority of the activity that we are seeing now is coming from the entry level,” he said.

There is also a higher number of hybrid customers — that is, people considering buying or renting, based on what is available — on the hunt for new digs, Malin said.

“Interest rates are still incredibly attractive,” he said.

Over the river, price growth has been more modest, despite last month’s roaring market, Miller said.

“After several months of very robust year-over-year growth, [Brooklyn rents are] only up 1 percent, so the numbers there seem to be more volatile than in Manhattan,” he said. “But rents are still rising.”

Indeed, the median rent in Brooklyn increased to $2,700 per month, up a mere 1 percent from $2,673 at this time last year, the Elliman report shows.

However, the volume of rental transactions was up 10.9 percent, to 357 from 322 year-over-year, which could indicate continued resistance from renters, with many opting to find a new place rather than suffer rent increases.

Still, insanely low vacancy and inventory are a concern for the whole industry, experts said.

“Any new product that comes online is always at the highest end of the marketplace,” Malin said. “We need to add some more units.”

The company is inviting investors to assess the property this week and submit plans for potential use, Verizon said today in a statement. It expects to keep the first 10 floors of the 31-story structure, a 1920s-era building whose lobby and exterior are designated as New York City landmarks.

By offering the space, located at 140 West St., Verizon aims to capitalize on a renaissance of the area following the Sept. 11 attacks more than a decade ago. The building is across the street from One World Trade Center, now the tallest tower in the U.S., which will open next year. The real estate could be used as retail, restaurant, hotel or residential space for the burgeoning neighborhood, Verizon said.

“Lower Manhattan — especially the World Trade Center neighborhood — is destined to be an important tourist and commercial center for the world, and the plan that Verizon is proposing is in concert with that grand vision for the area,” John Vazquez, vice president of global real estate, said in the statement.

Cushman & Wakefield Inc. has been hired to market the space, said Nicholas Derasmo, a spokesman for the New York-based brokerage.

Dual Disasters

Verizon’s tower, formerly the New York Telephone Co. building, has suffered two blows in recent years. The structure was damaged during the Sept. 11 attacks in 2001 when terrorists destroyed the original World Trade Center, requiring Verizon to embark on seven years of restoration. The devastation caused hundreds of windows to be blown out and steel girders punctured the building, according to MacRostie Historic Advisors LLC, which consulted on the rehabilitation project.

It was struck again last year by Superstorm Sandy, which flooded the building. The view of Verizon’s opulent lobby under water became a symbol of the storm’s destruction after the company posted a picture of the damage on the Web.

It’s become increasingly attractive to convert New York office space into housing, something that’s already happened to previous Verizon buildings. Manhattan apartment prices climbed 5.9 percent in the first quarter from a year earlier as buyers competed for a tight supply of properties, according to a report by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.

Doing Math

“With the lack of housing supply, especially in the new development space, I think every company, individual or institution with a building that has conversion potential is doing the math on whether they should take advantage of current conditions,” said Jonathan Miller, president of New York-based Miller Samuel Inc.

One Verizon office building in Chelsea on 18th St., which was sold in 2009 to a partnership led by JDS Development Group, was converted to a luxury condominium called Walker Tower. The 24-story project, where a top floor penthouse was listed for sale at $55 million, is expected to be completed this year.

Just four blocks from Verizon’s 140 West St. building is the landmark Woolworth Building, where the upper floors are being converted into 40 luxury apartment units. An investment group led by New York developer Alchemy Properties acquired the top 29 stories last year for $68 million, according to research firm Real Capital Analytics Inc.

Earlier Deals

Verizon has previously sold parts of other buildings, including 1095 Avenue of the Americas and 375 Pearl St. The company maintained communications equipment at both locations.

With 140 West St., Verizon will retain the executive offices and boardroom on the 28th and 29th floors, in addition to the lower floors. The building will still house both network and administrative employees and it will remain the corporate headquarters, said Ray McConville, a spokesman for the company.

As part of the move, about 1,100 mostly customer-service workers will be relocated to a call center in Brooklyn. Verizon said it is planning to make improvements, including a fitness center, at the Flatbush Avenue site.

Verizon shares rose 1.7 percent to $52.92 at the close in New York. The stock has climbed 22 percent this year.

The buyers of Steinway Hall are in informal talks with the city’s Landmarks Preservation Commission and zoning officials about what they may build on the site, which includes the piano maker’s building and an adjacent parcel at 105-107 W. 57th St. that they purchased last year. The investors had plans for a 700-foot (213-meter) tower and now estimate that air rights acquired in the Steinway deal would allow them to go taller — potentially as Manhattan’s third-tallest residential building.

“It will certainly be taller than 900 feet,” said Michael Stern, managing partner of JDS Development Group, which agreed in March to buy the 16-story Steinway Hall and land beneath it with Property Markets Group and Atlantic Development Group. “What its ultimate height will be is yet to be determined.”

The JDS group’s project sits at the center of a high-rise construction boom in midtown Manhattan as developers seek to take advantage of soaring luxury-condo demand. It’s on the same block as the current tallest residential building in the city, Extell Development Co.’s One57, which has set records with two condo sales valued at more than $90 million each. Three blocks away at Park Avenue and 57th Street, Harry Macklowe and CIM Group are building a skyscraper on the former Drake Hotel site that’s slated to rise even higher than the Extell property.

Manhattan Icons

The 57th Street corridor, near such New York icons as Central Park and the luxury shopping district of Fifth Avenue, is appealing to international investors who are seeking Manhattan residential real estate as a haven for cash, according to Jonathan Miller, president of New York-based appraiser Miller Samuel Inc.

“It’s this new high-tower district that has a global appeal,” he said. “It’s almost a new segment of the market: high-end residential immersed in Midtown.”

The median price of new-development Manhattan condos climbed 36 percent in the first quarter from a year earlier to $1.33 million, as a dearth of supply intersected with a surge in demand for luxury units from local and international buyers, Miller said. The number of new units on the market dropped 42 percent in the quarter to 872, according to a report from Miller Samuel and brokerage Douglas Elliman Real Estate.

JDS and its partners plan at least 45 luxury condos on the 57th Street site, said Stern and Kevin Maloney, chief executive officer of Property Markets Group, which is also developing the 24-story Walker Tower in Chelsea with JDS.

Steinway Landmark

Plans for the combined site may include a condo tower with retail at the base or a hotel with condos above it. How Steinway Hall can be incorporated into the project is under discussion with landmarks and zoning officials, Stern and Maloney said. As a landmark, the building can’t be demolished.

The eventual height of the tower, to be built at the 105-107 W. 57th St. site, is “not a contest to us,” Stern said. “We’re just going to try to find the most desirable configuration.”

Unimpeded vistas of Central Park begin at 225 feet, according to Stern.

“It’s all about the views, so we want to maximize the square footage we have above the break of unobstructed park view,” he said.

Part of the site is in a special Midtown zoning district that doesn’t restrict building heights, according to Stern. The development rights acquired with the Steinway purchase allow the companies to expand the number of square feet they can build, including going higher, he said.

“You can probably pull enough out of Steinway,” Maloney said. “The air is there.”

Pricey Views

At 900 feet, JDS’s project would be about the height of the One Bryant Park office tower without its spire, and rank as New York’s third-tallest residential tower, according to Emporis.com, a website that collects data on skyscrapers. One57, where Extell expects residents to begin moving in this year, is the current highest at 1,004 feet. Macklowe and CIM’s 432 Park Ave. would rise to 1,397 feet upon completion in 2015. More than a third of the units in that building have already been sold, the firms said in March.

Building trophy apartments with lofty views gives developers, who are paying high prices for land, the best return on their investment, according to Miller.

“Property values rise as you go up, so the higher you go, in theory, the more you can sell those properties for,” he said.

Helicopter Views

Extell was one of the earliest adopters in the latest condo wave, breaking ground on One57 in 2009. Buyers have been putting down deposits based on floor plans, a model apartment in the 6,000-square-foot offsite sales office and photographs by a camera mounted on a drone helicopter that show views at different elevations of the 90-story tower.

Extell has increased prices at least twice. A 6,200-square- foot full-floor apartment on the 88th floor was listed for $67 million in September, a 28 percent markup from its initial offering price in June 2011. The 87th-floor unit was increased to $64.5 million, or 36 percent more than in June 2011, sales documents filed with the New York state attorney general’s office show.

The JDS group expects its Steinway Hall deal to be completed this month. Steinway Musical Instruments Inc. (LVB), the maker of its namesake pianos, agreed to sell its stake in the property for $46 million, plus an undisclosed amount to be held in escrow. The land beneath the building was purchased from a separate, unnamed owner.

The narrowness of the 105-107 W. 57th St. site means the developers probably won’t try to match the Extell tower’s height, Maloney said.

“When you get that high with such a narrow building, it might cause the floor plate to be so inefficient, it may rule it out economically,” he said. “It could rise very high, but I don’t think it’s going to be higher than One57.”

Local real estate entrepreneurs met and shared their ideas over bagels and coffee. At a panel discussion moderated by realtor David Brause, participants shared views on the booming LIC real estate industry’s present and future.

Panelists included Eric Benaim, president and CEO of Modern Spaces, Jonathan Miller, president and CEO of Miller Samuel Inc., Andrew Nimmer, principal of The Local Hostels, Michael Phillips, chief operating officer of Jamestown and Jason Sheftell, real estate editor for the New York Daily News.

The panelists discussed what they believe makes LIC a destination for visitors and people looking to settle down. They noted the easy public transportation access, closeness to Manhattan and the affordability of the community’s real estate.

According to Benaim, whose business has gone from residential sales and leasing to project development and marketing, prices for real estate in the area range from about $2,500 to $50,000,

“I think Long Island City is the gateway to all of Queens,” said Sheftell. “It’s the very beginning for this neighborhood.”

The story in New York is not nearly that good and no one seems to be taking much notice of it.

The accompanying chart tracks the Case-Shiller index for the 20 largest markets against its index for the New York area. As you can see, the region has failed to follow the national rebound. In fact, New York showed a gain in only the last two months and prices remain below where they were a year ago.

The story is better for New York City. The first-quarter report from the Real Estate Board of New York for the entire city advanced 7% to 480,000 in the past year. Manhattan apartments rose 6% to $820,555, according to Miller Samuel. (These are median not average numbers. It is crucial to use median because the averages are inflated by a few very expensive luxury apartment sales and distort the New York figures when compared with national figures).

It is true that New York did not suffer as severe a decline as the rest of the country, but the housing figures are telling us something. While the city is enjoying a robust recovery measured by jobs, the suburbs are stagnating because they don’t have the growth engines of the city’s economy—tourism, TV production, tech and higher education. In addition, the trying times in financial services hurt the suburban markets a lot because so many bank and finance executives live there.

Nationally, the major issue in housing is whether the recovery will be sustained because it is being driven by sales to investors who want to rent properties and then flip them and the end to the wave of foreclosures, which depressed the market.

The New York region’s housing market depends on an improved economy in the suburbs, and there is not much evidence that is happening anytime soon.

After the Wall Street crisis in 2008, the Canadian real estate market barely skipped a beat, but New York and the rest of the country suffered. The few Manhattan sales that did occur in the months following September 2008 were discounted by as much as 25%.

The upswing

More recently, 1Q 2013 has been a period of banner sales with bidding wars and rising prices. Market conditions New York hasn’t experienced with such exuberance since 2007. According to the Elliman Report, a Manhattan real estate sales report prepared by Miller Samuel Inc., “Sales activity expanded despite plunging listing inventory. Supply continued to decline as listing inventory dropped 34.4 percent from the same period a year ago, the steepest drop in the 12 years this metric has been recorded. However, the number of sales increased 6.3 percent to 2,457 as consumers fought tight credit conditions to take advantage of low mortgage rates.”

Miller Samuel Inc. continues with, “All price indicators posted year-over-year gains. Median sales price rose 5.9% from the same period last year to $820,555.”

Luxury pause

The flourishing market conditions are similar across all market segments, however, the luxury market which represents the top 10 percent of condo and coop sales, showed a negligible decline in median price from $4,125,000 in 1Q 2012 to $4,015,000 in 1Q 2013 and a more significant decline from $4,440,150 in 4Q 2012.

This downward adjustment is best explained as a resting period after a flurry of high-end sales rushed to close in 4Q 2012 to beat an increase in capital gains tax effective January 1st. Another key factor is a shift in motivation. Prospective sellers witnessed a fast moving market at the end of 2012 and seized the opportunity to sell at a premium. As a result, 1Q 2013 listing inventory for the luxury sector increased 7.6 percent over the previous quarter. The additional inventory took some pressure off buyers to respond quickly, but not completely since the inventory for luxury homes is still down 15.4 percent from 1Q 2012.

Low Inventory

The sharpest decline in listing inventory is in the new development sub-category which fell 41.7 percent from the same quarter last year. For a few years after the crash, new development projects were put on hold while developers had a wait and see attitude. It’s only recently, that new developments came to market. Developers are playing catch up to provide sufficient supply and they’ve conveniently stumbled upon a pent up demand that’s allowing them to fetch top dollar for each new project. Accidental or planned, the delay in building has paid off for the developer as new development prices far exceed peak 2008 benchmarks.

Loft Increase

The Manhattan loft market segment experienced an 8.8% increase in median sales price and a 20.3% increase in average sales price over the prior year quarter which is the highest average price increase of all market segments. This growth underscores the continued high demand for loft style living which is unique to the downtown market.

Condo vs Coop

Condos saw a 13.8 percent increase in median sales price from the prior year quarter and coops increased a modest 1.9 percent. One of the quirks of Manhattan real estate is the infamous coop. 75 to 80 percent of home ownership in Manhattan is in the form of a cooperative. The remaining 20 to 25 percent are condos. Condos offer freehold ownership and coops generally have restrictive policies.

The flexibility of freehold ownership and the low availability of condominiums make them more desirable, which creates a price variance for the two types of ownership. The average price per square foot for a Coop in 1Q 2013 was $925 compared to $1377 per square foot for a condo in the same quarter.

Home prices in the U.S. jumped a whopping 9.3 per cent in the year to February, according to the Standard & Poor’s/Case-Shiller home price index.

It’s a clear sign that the U.S.’s half-decade-long housing slump — which wiped billions from household balance sheets — is finally coming to an end.

Things have been particularly strong at the top end of the U.S. market. Forbes magazine recently declared the country has entered “the era of $100-million homes.”

“I’m at the point where I’m calling this a new category of housing,” Miller Samuel CEO Jonathan Miller told Forbes. “It is something that’s come of age in the past two years in response to global economic turmoil, where wealthy individuals are looking for ways to invest, and ultra-high-end real estate seems to be the asset of choice.”

When it comes to $100-million homes, the same cardinal rule of real estate still applies, Forbes says: Location, location, location. A house has to be located in one of the U.S. most expensive zip codes in order to break the $100-million barrier.

But pedigree also matters.

“A home tied to an esteemed public figure can offer unique bragging rights, even when the connection isn’t a happy one, as with Casa Casuarina, the $100 million Miami Beach mansion where Gianni Versace was murdered on the front steps,” Forbes reports.

The top end of Canada’s housing market is nowhere nearly as opulent (or as dramatic). Even though home prices in Canada are about 62 per cent higher, on average, than U.S. house prices, the most expensive home for sale in Canada, the last time HuffPost checked, was listed for only $28.8 million.

We use the world “only” loosely here, of course.

Here are the latest:

MLH SQFT Index (Miller Samuel Manhattan Luxury Housing Price Per Square Foot)

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MLH MED Index (Miller Samuel Manhattan Luxury Housing Median Sales Price)

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MLH AVG Index (Miller Samuel Manhattan Luxury Housing Average Sales Price)

[click to expand]

While the mass openings were more the result of coincidence than design, they “reflect New York’s ascendancy as a true world capital”, according to historian Andrew Berman, executive director of the Greenwich Village Society for Historic Preservation (GVSHP). “New York may only have truly passed London for the title after the first world war, but this was when the city’s pre-eminence began.”

This potent mix of economic, cultural and technological expansion also left its mark on the era’s residential architecture, particularly on Manhattan’s then-ascendant Upper East Side. Indeed, with Grand Central Terminal as its main entry point, and the green expanse of Central Park as its key calling card, Park Avenue began to emerge as the East Side’s main thoroughfare in the years leading up to the first world war. As on nearby Fifth Avenue, Park Avenue would eventually be flanked by the grandiose apartment buildings that quickly supplanted single-family town houses as the most desirable dwellings for wealthy Manhattanites.

Just beyond Park Avenue, two such buildings – 150 East 72nd Street and 11 East 68th Street – are simultaneously celebrating their centenary while being converted into premium, luxury condominiums. Located roughly five blocks apart, and close to the 69th Regiment Armory (whose annual contemporary art fair also debuted in 1913), the projects are relatively small for New York. But their attributes – bay windows, copper-cladding, 12ft-high ceilings – foreshadowed the Upper East Side’s architectural evolution for the next 20 years.

At 150 East 72nd, 32 rental apartments have been whittled down to 20 new condominiums, while at 11 East 68th Street, known as the Marquand, 41 rental units will be converted into roughly 30 homes. Named after railroad magnate Henry Marquand, a founder of the Metropolitan Museum of Art and the site’s original owner, the building has been redesigned by architect Lee Mindel, whose firm Shelton, Mindel & Associates is best known for designing private residences for clients such as George Soros and Sting and Trudie Styler.

Both buildings reference the era’s embrace of European architectural styles with brick and limestone cladding and rigidly symmetrical, minimally embellished façades. And inside, appropriate materials have been sourced to evoke the projects’ richness and provenance. “We’re using the same Tennessee marble that was used to build Grand Central Terminal,” says developer Harry Macklowe, whose firm Macklowe Properties is building 150 East 72nd Street.

Rising to nearly 15 floors each, these buildings also reflect the technological advancements that were transforming America’s construction industry, such as elevators and the steel frame. These technologies were pioneered in Chicago, the historical home of the skyscraper and the city that gave birth to the influential City Beautiful movement. Established as a response to late-19th century tenement crowding, the movement advocated large-scale urban planning schemes, incorporating parks and open spaces, across the nation.

“New York has always looked to Europe for inspiration, and from Italian to French, Gothic to Renaissance to Federal, the architectural styles during this period were [from] all over the map,” says historic preservationist Tara Kelly, executive director of the Friends of the Upper East Side Historic Districts. “But 1913 was sort of a magical moment, when architecture, investment and grand gestures towards civic pride all came together.”

As in 1913, the Upper East Side of Manhattan remains a mostly residential district, and buyers – unlike at flashier Midtown projects – are predominantly American. “Most of our buyers already live in New York neighbourhoods such as Chelsea or Tribeca,” says Macklowe, who is also building the 1,400ft 432 Park Avenue, which will open in late 2015 as New York’s tallest building. “They now want bigger homes close to Central Park and near many of New York’s best private schools.”

Accordingly, both 150 East 72nd and the Marquand are dominated by large-sized apartments – three- to five­bedrooms at the former; four- to six-bedrooms at the latter. Both Macklowe and Marquand developer Ziel Feldman, founder of HFZ Capital Group, say such sizes come at a premium. Prices at 150 East 72nd Street – slated for occupancy this summer – begin at just over $6m for the 2,300 sq ft smallest units and rise to $20m for the largest penthouses. Homes at the Marquand will range from roughly 3,900 sq ft to between 7,000 and 8,000 sq ft, says Feldman, and begin at roughly $15m. As at 150 East 72nd Street, two apartments will be offered per floor and residents should begin moving in by late autumn.

This autumn is also when the top 30 floors of the century-old Woolworth Building in the City Hall neighbourhood are due to begin their long-delayed transformation into around 40 luxury apartments. Capped by a five-floor penthouse in the building’s neo-gothic cupola, and anchored by a restored 55ft basement swimming pool, the Woolworth’s apartments are expected to be priced at roughly $3,000 per sq ft. That may be standard for luxury Upper East Side projects such as 150 East 72nd Street or the Marquand, but it’s more than double the average price of nearby apartments.

So will the Woolworth Building’s architecture and heritage – and 100th anniversary – be enough to lure top-of-the-market buyers to a still “transitional” neighbourhood? Jonathan Miller, a local analyst at Miller Samuel, believes so. “For a building like the Woolworth, in this segment of the market,” Miller says, “nothing would surprise me.”

A review of 214 Manhattan townhouse sales that closed between July 2010 and March 2013 shows that wider townhouses don’t necessarily sell for a higher price per square foot. Indeed, the overall closing price of a home has more to do with location and layout than width, according to the data, compiled by StreetEasy. For example, a 13-foot, four-bedroom townhouse at 35 West 12th Street in Greenwich Village sold for $5.2 million back in 2011, while a nearby 20-foot, two-family townhouse at 69 Bedford Street fetched a mere $2.6 million that same year.

The average price for a townhouse was $5.3 million in 2012, according to the most recent Douglas Elliman townhouse market report, prepared by Miller.

“It really does become an issue of ego more than anything else,” said Jed Garfield, president of Leslie J. Garfield & Co., a brokerage that specializes in townhouse sales. “I’ve sold houses that are eight feet wide and 40 feet wide and there’s no appreciable difference between the widths.”

Instead, a better marker of value, the data sample shows, is how far a townhouse’s width deviates from the Manhattan average — 19.1 feet on the East Side and 19.7 feet on the West Side, according to the Elliman report.

For example, J. Christopher Flowers sold the 50-foot-wide Harkness Mansion at 4 East 75th Street to art mogul Larry Gagosian for $36.5 million in 2011, at a price of $1,682 per square foot. Last year, a 12.5-foot-wide townhouse at 153 East 78th Street sold for $6.1 million, or $2,083 per square foot — $401 more per square foot than Flowers’ former home. (Of course, Flowers famously paid $53 million for the Harkness Mansion in 2006.)

“As they get more wide they get rare,” said Chris Halstead, an executive vice president at Halstead Property, who is listing an 18-foot-wide townhouse at 333 East 82nd Street, which is priced at $2.5 million less than the 22-foot-wide house next door. “That [rarity] contributes to how attractive they are to buyers. As the homes get wider, there are fewer of them.”

That said, wider townhouses still carry a certain prestige. The wider the townhouse, the more flexibility a buyer perceives in the overall floor plan, said Miller.

But, he warned, excessive additions can decrease value. He remembers appraising a 15-foot-wide townhouse on the Upper East Side in which the owner had installed an elevator. The elevator took up nearly half the width of the floor plan and greatly decreased the value of the property, he said.

“It turns out that throwing amenities at a property and not considering a key attribute like width can detract from the value,” Miller said.

While flexibility in layout is dependent on width, a poorly designed use of space will decrease any value gained from extra width, he explained.

Townhouse specialist Paula Del Nunzio, a senior vice president at Brown Harris Stevens, said that her clients often request homes wider than 20 feet, but not for their layout potential. Instead, they are looking for legacy.

“The wider mansions were often created by extraordinary original architects,” explained Del Nunzio, naming icons like Stanford White, C.P.H. Gilbert and John Duncan.

The widest townhouses, she added, have a unique magnetism because they were crafted for “clients of the Gilded Age, who sought to reproduce an American version of the palaces of Europe.”

Del Nunzio is currently listing the 40-foot-wide townhouse of Broadway producer Hal Prince for $21 million and a 25-foot-wide historical Greenwich Street townhouse, built in 1819 and asking $19.5 million. Just as buyers covet wide townhouses, there is also demand for the exclusivity of skinny townhouses. Manhattan’s slimmest townhouse, at 9.5 feet wide, is on the market for $3.5 million, or $3,530 per square foot. The 990-square-foot, four-story house at 75 1/2 Bedford Street includes a renovated basement, three bedrooms and two bathrooms.

“There is some cachet behind having the tiniest townhouse around,” said Sofia Song, head researcher at StreetEasy. “You can boast about that.”

The listing inventory for Manhattan townhouses has remained relatively stagnant during the past decade, decreasing slightly by 3.5 percent since 2003, from 426 listings to 411, Elliman’s report shows. Such scarcity in townhouse supply has major implications for how buyers perceive the value of unalterable attributes like width.

“The listing inventory is remarkably consistent because the housing stock isn’t changing,” Miller said. “You’re not seeing new development. You’re seeing rehab, but you’re not seeing new construction.”

A review of 214 Manhattan townhouse sales that closed between July 2010 and March 2013 shows that wider townhouses don’t necessarily sell for a higher price per square foot. Indeed, the overall closing price of a home has more to do with location and layout than width, according to the data, compiled by StreetEasy. For example, a 13-foot, four-bedroom townhouse at 35 West 12th Street in Greenwich Village sold for $5.2 million back in 2011, while a nearby 20-foot, two-family townhouse at 69 Bedford Street fetched a mere $2.6 million that same year.

The average price for a townhouse was $5.3 million in 2012, according to the most recent Douglas Elliman townhouse market report, prepared by Miller.

“It really does become an issue of ego more than anything else,” said Jed Garfield, president of Leslie J. Garfield & Co., a brokerage that specializes in townhouse sales. “I’ve sold houses that are eight feet wide and 40 feet wide and there’s no appreciable difference between the widths.”

Instead, a better marker of value, the data sample shows, is how far a townhouse’s width deviates from the Manhattan average — 19.1 feet on the East Side and 19.7 feet on the West Side, according to the Elliman report.

For example, J. Christopher Flowers sold the 50-foot-wide Harkness Mansion at 4 East 75th Street to art mogul Larry Gagosian for $36.5 million in 2011, at a price of $1,682 per square foot. Last year, a 12.5-foot-wide townhouse at 153 East 78th Street sold for $6.1 million, or $2,083 per square foot — $401 more per square foot than Flowers’ former home. (Of course, Flowers famously paid $53 million for the Harkness Mansion in 2006.)

“As they get more wide they get rare,” said Chris Halstead, an executive vice president at Halstead Property, who is listing an 18-foot-wide townhouse at 333 East 82nd Street, which is priced at $2.5 million less than the 22-foot-wide house next door. “That [rarity] contributes to how attractive they are to buyers. As the homes get wider, there are fewer of them.”

That said, wider townhouses still carry a certain prestige. The wider the townhouse, the more flexibility a buyer perceives in the overall floor plan, said Miller.

But, he warned, excessive additions can decrease value. He remembers appraising a 15-foot-wide townhouse on the Upper East Side in which the owner had installed an elevator. The elevator took up nearly half the width of the floor plan and greatly decreased the value of the property, he said.

“It turns out that throwing amenities at a property and not considering a key attribute like width can detract from the value,” Miller said.

While flexibility in layout is dependent on width, a poorly designed use of space will decrease any value gained from extra width, he explained.

Townhouse specialist Paula Del Nunzio, a senior vice president at Brown Harris Stevens, said that her clients often request homes wider than 20 feet, but not for their layout potential. Instead, they are looking for legacy.

“The wider mansions were often created by extraordinary original architects,” explained Del Nunzio, naming icons like Stanford White, C.P.H. Gilbert and John Duncan.

The widest townhouses, she added, have a unique magnetism because they were crafted for “clients of the Gilded Age, who sought to reproduce an American version of the palaces of Europe.”

Del Nunzio is currently listing the 40-foot-wide townhouse of Broadway producer Hal Prince for $21 million and a 25-foot-wide historical Greenwich Street townhouse, built in 1819 and asking $19.5 million.

Just as buyers covet wide townhouses, there is also demand for the exclusivity of skinny townhouses. Manhattan’s slimmest townhouse, at 9.5 feet wide, is on the market for $3.5 million, or $3,530 per square foot. The 990-square-foot, four-story house at 75 1/2 Bedford Street includes a renovated basement, three bedrooms and two bathrooms.

“There is some cachet behind having the tiniest townhouse around,” said Sofia Song, head researcher at StreetEasy. “You can boast about that.”

The listing inventory for Manhattan townhouses has remained relatively stagnant during the past decade, decreasing slightly by 3.5 percent since 2003, from 426 listings to 411, Elliman’s report shows. Such scarcity in townhouse supply has major implications for how buyers perceive the value of unalterable attributes like width.

“The listing inventory is remarkably consistent because the housing stock isn’t changing,” Miller said. “You’re not seeing new development. You’re seeing rehab, but you’re not seeing new construction.”

According to Coldwell Banker’s luxury market report, many of these properties reside in the same few zip codes: New York, Beverly Hills, Aspen and Montecito, but surprisingly a few of the country’s highest priced abodes are in less conspicuous locations, such as the Broken O Ranch just west of Great Falls, Montana, which recently had an asking price of $132,500,000.

Jonathan Miller, chief executive of New York real estate appraisal firm Miller Samuel, Inc told Forbes, “It is something that’s come of age in the past two years in response to global economic turmoil, where wealthy individuals are looking for ways to invest, and ultra-high-end real estate seems to be the asset of choice.” And there is nothing conservative about these acquisitions. Some are palatial estates well over 10,000 square feet with amenities like ballrooms that fit 200 guests, 50-seat home theaters and regulation-sized athletic facilities. Then there are the penthouse spreads with private elevators and terraces with jaw-dropping views.

Want to see what a $100 million home looks like? We’ve rounded up ten in the slideshow below. • The Penthouse at The Pierre Hotel $125 million New York, New York Listed by: Sotheby’s Homes • Miami Beach Residence $100 million Miami Beach, Florida Listed by: Realtor.com • DeGuine Estate & Lands $100 million Hillsborough, California Listed by: Sotheby’s International Realty • Midtown Duplex $115 million New York, New York Listed by: Corcoran Group • Carlwood Drive Residence $125 million Los Angeles, California Realty Executives International • Silicon Valley Mansion $117.5 million Woodside, California AOL Real Estate • Maison de l’Amitié $125 million Palm Beach, Floriday Wall Street Journal • Broken O Ranch Land $132.5 million Montana SOLD by: Swan Land Company • Crespi Hicks Estate $135 million Dallas, Texas • Oprah Winfrey’s Promised Land $50 million Montecito, California CORRECTION: This previously stated that the home was valued at $2.7 billion. This is Oprah Winfrey’s net worth.

Located blocks from the ocean and the bay on a thin peninsula of land that makes up the coastal community of Belle Harbor in the Rockaways, Anzalone’s prized colonial home with “old world charm” was inundated with 12 feet of seawater that filled the basement to the ceiling and a few feet of the first floor.

“My husband and I struggled,” said Anzalone, who ultimately decided to move forward with the purchase of the home worth around $750,000. “People think we’re absolutely crazy.”

Throughout the New York metro area, Superstorm Sandy left behind difficult decisions for prospective buyers and sellers of damaged homes on the market.

Some buyers have decided to move forward but now must negotiate how repairs will be completed. Others are reneging and looking for escape clauses in their contracts. Realtors are taking inventory of their listings in flooded neighborhoods, while banks are sending appraisers out in droves to re-evaluate homes in the wake of the storm.

For the last eight years, Anzalone has rented in Brooklyn’s Bay Ridge neighborhood with her husband and their 3-year-old daughter. Now, planning to go ahead with the purchase of the home in Rockaways, she expects home insurance premiums to rise 10 to 20 percent, and she is working with an attorney to negotiate with the seller to make necessary repairs.

Other buyers in contract have decided the risks are not worth closing the deal.

Richard R. Rodriguez, a real estate attorney who represents Anzalone, is helping two other clients try to escape from contracts on homes that were damaged.

“Everyone has the same concern: the neighborhood,” and how it will recover, said Rodriguez.

In one case, Rodriguez said he plans to use a clause in the buyer’s contract that required the deal to close by the end of October, just two days after Sandy hit. The buyer will most likely lose a few thousand dollars by walking away, a cost Rodriguez considered “not bad.”

Attorney Jay Freedhand is representing a buyer who planned to close on a nearly $2 million home last week in Far Rockaway. But after the city’s Department of Buildings deemed the house severely structurally damaged, the buyer wanted to renege. Freedhand is now looking for outlets to stop the sale stemming from the city’s damage classification.

“We don’t know what that legally means,” said Freedhand. “We need to figure out exactly what the government order actually means. That part is unprecedented.”

In hard-hit Hoboken, New Jersey, contracts began fraying shortly after the storm moved inland, even on homes that were not damaged by the storm. Gene Cordano, director of sales for Halstead Property in New Jersey, said he lost three deals in contract.

“They decided they didn’t want to deal with the possibility of flooding in the aftermath,” said Cordano, who said he considered the loss “a blip on our radar screen.”

With some New Jersey residents dislocated by the storm, Cordano said he expects to see available housing units quickly filled.

“The question being asked going forward is, ‘Did this building flood during the hurricane?’ And that will be answered by, ‘yes,’ in many cases,” Cordano said.

Of the roughly 140 properties listed in Hoboken, an estimated 56 percent were flooded or otherwise damaged in the storm, Prime Real Estate Group Co-Chief Executive Officer Jesse Halliburton said.

“There is definitely going to be a time period when consumer confidence is going to be lower and less likely to make a quick decision,” Halliburton said.

“It’s crossed my mind that property prices could drop,” Halliburton said.

Robin Shapiro of Robin Shapiro Realty said the sand drift against her own home in the Rockaways was 3-feet-high the day after the hurricane. After digging out, Shapiro said she fielded calls from real estate flippers looking for cheap deals, but Shapiro, who still lost two deals in contract after the storm, did not foresee prices would significantly decline.

“There are only so many oceanfront properties,” she said.

Jonathan Miller, president of the real estate appraisal firm Miller Samuel, agreed buyers will continue to idolize beachfront properties, but a sobering effect on the market, should there be one, would most likely come from lenders and insurers.

“It’s going to come down to cost and access to credit. Lenders right now are essentially afraid of their own shadow. They are looking for reasons not to lend,” said Miller. “Even if a home has flood insurance, lenders may be wary and look for a reason to not issue a mortgage.”

That’s what happened last week when Adria and Dr. George C. Roush’s updated unit in the historic complex at 200 N. Ocean Blvd. sold for a recorded $2.12 million. The buyer was Samuel “Sandy” J. Bloomberg, acting as trustee of a family trust in his name, along with co-trustee James H. Grandberg.

Before this month’s deal, the last sale at Warden House dated to 2006, when the Roushes paid about $1.6 million for condo No. 3, their 1,778-square-foot condo about a block from the beach. They transferred ownership of the two-floor unit to Adria Roush’s name in 2007.

The apartments are among Palm Beach’s most intriguing, at least as far as their architectural history is concerned. They were carved out of a 40-room, Mediterranean-style mansion designed in 1922 by noted society architect Addison Mizner; the house was converted into condos by Palm Beacher Bob Eigelberger in 1980.

Eigelberger’s revamp — along with his similar “adaptive restoration” of nearby Bienenstar, another celebrated historic mansion — earned its own place in island history when it received the Preservation Foundation of Palm Beach’s inaugural Robert I. Ballinger Award for historically sensitive renovation in 1988.

The Roushes completely overhauled their two-bedroom, two-bathroom apartment in 2009, adding a third bedroom and a half-bath in the process. The update created a light-and-bright apartment with a “transitional twist,” according to the Corcoran Group’s property description prepared by listing agents Paulette Koch and her son, Dana Koch.

Among the apartment’s features are crown moldings, Venetian-plaster walls, an antique mantelpiece, a stainless-steel kitchen and a sophisticated Lutron lighting system.

“This apartment is outstanding in every way possible. It really takes your breath away,” says Paulette Koch, who had priced it at $2.75 million.

Corcoran Group had the listing for a little less than two months before it went under contract in early January.

“People are also looking for ‘turnkey’ and ‘easy,’ and this was one of those,” Koch adds. Neither she nor her son would comment further on the sale or the parties involved.

Folks with New England ties figured prominently on both sides of the deal. The Roushes have a home in Greenwich, Conn. Dr. Roush, who specializes in internal medicine, is affiliated with St. Vincent’s Medical Center in Bridgeport. His wife, meanwhile, is a jewelry designer known professionally as Adria de Haume.

Buyer Bloomberg, meanwhile, founded Tweeter Home Entertainment Group, a now-defunct multi-state chain of audio and video electronics stores that was based in Canton, Mass. In 2008, Bloomberg and his wife, Carolina, sold a 2.3-acre parcel they owned through a trust in her name at 1040 S. Ocean Blvd. in Manalapan for $9.2 million, property records show.

“We moved in a week ago and we love it,” says Sandy Bloomberg, who has other homes in Massachusetts and Vermont. “It’s a wonderful apartment and a great location.”

*

New market analysis — In case you missed it, houses are moving again in Palm Beach. The number of single-family homes that sold during the first quarter of the year was up substantially compared to the same period a year ago. So confirms an analysis of data, including selling prices, drawn from data in the local multiple listing service and just released by the Douglas Elliman agency.

Thirty-three Palm Beach houses sold in January, February and March, compared with 18 in the first quarter of 2012, according to the Elliman report. The independent analysis was prepared for the agency by Miller Samuel Inc., a New York City-based real estate appraisal and consulting firm.

A key reason for the increase in transactions? The gap between the asking prices of properties and the prices they actually fetched has narrowed substantially, says Jonathan Miller, who heads Miller Samuel. Expressed as a percentage, that gap fell from nearly 20 percent in last year’s first quarter to 13.5 percent this year, according to the report.

In other words, buyers and sellers have increasingly found themselves on the same page during negotiations.

“Properties are moving off the market,” said Miller. “And what you’re seeing is that higher-quality properties move more quickly.”

Year-over-year first-quarter comparisons show prices also were up in the single-family sector, with the median sales price jumping nearly 42 percent to $2.8 million. The median is the price at which half of the houses sold for more and half for less.

Also noteworthy: Bigger houses sold during the first quarter of this year versus the same period last year. The average size of the properties sold between Jan. 1 and March 31 of this year was 4,351 square feet – an increase of 11 percent in square footage over those that sold in the first quarter of 2012. That hike “partly caused the large increase in price indicators,” the report says.

On the condo scene, the first-quarter figures were not quite as buoyant, with the number of condos sold falling from 59 to 54. The median condo sales price in January, February and March of this year, meanwhile, was just about flat, at $397,500, when compared to last year’s figure.

The report does not take into account sales of properties that were not listed in the MLS, nor do the sales prices necessarily match those recorded with the deeds by the Palm Beach County Clerk’s office.

Miller prepared similar first-quarter reports for the markets in Miami, Fort Lauderdale and Boca Raton, where Douglas Elliman also has brokerages; similar reports are available for New York City and nearby areas.

You can see the complete Palm Beach analysis by clicking the “Florida” link at Elliman.com/MarketReports.

Just 15,303 homes were on the market, according to the first quarter report he released Thursday in conjunction with Douglas Elliman Real Estate.

The report showed sales fell 14 percent quarter-over-quarter to 3,905, but stood 2.9 percent greater than the 3,795 recorded during the first quarter of 2012. (Generally, year-over-year statistics are better indicators of the market because it accounts for seasonal housing cycles.)

Long Island’s median sales price sank 2.6 percent on both an annual and quarterly basis, to $341,000. Broken out by county, the median sales price in Suffolk (excluding the Hamptons) was $295,000; in Nassau it was $388,000.

Whereas superstorm Sandy was cited as a big factor in a Hamptons market report released earlier this week, both Miller and Douglas Elliman chief executive Dottie Herman played down its affect on this report’s finding. “People who want to live on the ocean, want to live on the ocean,” Herman said. “That’s never going out of style.”

Miller noted that even in the hardest-hit communities, in particular the South Shore of Nassau County, many would-be sellers are waiting out the rebuilding process before they list their homes. So while the number of South Shore sales fell by nearly a third to 107 in the first quarter, the median sales price of those homes slipped just 0.8 percent to $328,000.

However, in the long-term, the increased cost of home ownership in the area — from increased premiums, flood-proof construction and potentially higher property taxes to compensate for lost revenue — might yield a weaker real estate market.

Both Herman and Miller pointed to the inventory shortage as having the biggest impact on the market. Inventory on Long Island declined 24.8 percent year-over-year, leaving less than a year’s worth of supply — and that’s not because buyers are snapping up homes. Sales increased just 2.9 percent annually.

“What’s happening is fewer listings are coming on the market because you have a lot of people on Long Island with low or negative equity,” Miller explained. (A recent report found about one in 10 Long Islanders owes more on their home than it’s worth.)

Those owners, he continued, have no reason to sell because they can’t trade up, especially with today’s tight credit standards. That, in turn, impacts aggressive home hunters. Without as many suitable options for new purchases even they become reluctant to list their homes, which perpetuates the cycle.

“Inventory is falling far faster than sales are rising and it’s largely credit-related,” Miller said.

A 12.2 percent annual rise in newly pending home sales — or homes that entered contract during the first quarter — indicates that the inventory shortage could become even grimmer, which might finally apply some upward pressure on pricing.

That’s good news for Herman and her stable of agents, who have begun encountering bidding wars on particularly desirable properties. However, she noted that agents must be careful offers don’t outpace appraisals, otherwise the tight lending environment becomes an issue.

“Financing is still an issue on the Island,” she said, “it’s a little too tough to get credit.”

Home sales and prices in the tony enclave plummeted in the first quarter of this year, according to reports released today by the area’s largest residential brokerages.

“We had this mad rush at the end of the year and that poached first quarter activity largely in the high-end of the market,” said Jonathan Miller, president of appraisal firm Miller Samuel.

The average sale price dropped 29.4 percent, to $1.22 million from $1.72 million, compared to the same period in 2012, according to Douglas Elliman’s quarterly report, compiled by Miller. The average price of a Hamptons home in the fourth quarter of 2012 was $2.13 million, or 91 percent less than the previous quarter.

Average prices dropped in all Hamptons markets except for Bridgehampton, according to Brown Harris Stevens’ report. In Bridgehampton, prices increased 29.1 percent year-over-year to $2.13 million from $1.65 million, the report says.

The village of East Hampton posted the biggest year-over-year price decline, according to the Corcoran Group’s report. The average sale price for a home in East Hampton declined 76 percent year-over-year, to $1.41 million from $5.8 million, Corcoran’s report says.

Despite the price drops, the number of transactions increased 20.9 percent year-over-year, to 347 sales from 287 sales, Elliman’s report shows. The growth is the result of an increase in demand coupled with low mortgage rates, Miller said. However, since the previous quarter, the number of transactions fell 34.4 percent, to 347 from 529.

“The biggest characteristic in the market is actually what happened in the fourth quarter versus the first quarter,” he added. “The impact was quite profound on the East End.”

Indeed, the rush to complete transactions before the Jan. 1 deadline absorbed sales that normally would have closed in the first quarter, according to Brown Harris Stevens’ report. Some 239 sales closed during the first quarter of 2013 — 13 percent fewer than the first quarter of 2012, the report says.

In Manhattan and Brooklyn, a similar pre-fiscal cliff rush has meant “chronically low”inventory levels, as well as prices that have stayed steady. However, inventory hasn’t fallen nearly as far year-over-year in the Hamptons, Miller noted, declining only 4.9 percent, to 1,437 listings from 1,511 listings.

That said, the second quarter is “shaping up to be more consistent with seasonal trends,” Miller said, noting the increased activity he is seeing now.

Ernie Cervi, a managing executive director at Corcoran’s Bridgehampton’s office, noted that his agents have been busy in recent months.

“This is our season,” Cervi said. “This is when we’re the busiest.”

Home sales and prices in the tony enclave plummeted in the first quarter of this year, according to reports released today by the area’s largest residential brokerages.

“We had this mad rush at the end of the year and that poached first quarter activity largely in the high-end of the market,” said Jonathan Miller, president of appraisal firm Miller Samuel. The average sale price dropped 29.4 percent, to $1.22 million from $1.72 million, compared to the same period in 2012, according to Douglas Elliman’s quarterly report, compiled by Miller. The average price of a Hamptons home in the fourth quarter of 2012 was $2.13 million, or 91 percent less than the previous quarter.

The Corcoran Group via The Real Deal Average prices dropped in all Hamptons markets except for Bridgehampton, according to Brown Harris Stevens’ report. In Bridgehampton, prices increased 29.1 percent year-over-year to $2.13 million from $1.65 million, the report says. The village of East Hampton posted the biggest year-over-year price decline, according to the Corcoran Group’s report. The average sale price for a home in East Hampton declined 76 percent year-over-year, to $1.41 million from $5.8 million, Corcoran’s report says.

Despite the price drops, the number of transactions increased 20.9 percent year-over-year, to 347 sales from 287 sales, Elliman’s report shows. The growth is the result of an increase in demand coupled with low mortgage rates, Miller said. However, since the previous quarter, the number of transactions fell 34.4 percent, to 347 from 529.

“The biggest characteristic in the market is actually what happened in the fourth quarter versus the first quarter,” he added. “The impact was quite profound on the East End.”

Indeed, the rush to complete transactions before the Jan. 1 deadline absorbed sales that normally would have closed in the first quarter, according to Brown Harris Stevens’ report. Some 239 sales closed during the first quarter of 2013 — 13 percent fewer than the first quarter of 2012, the report says.

In Manhattan and Brooklyn, a similar pre-fiscal cliff rush has meant “chronically low”inventory levels, as well as prices that have stayed steady. However, inventory hasn’t fallen nearly as far year-over-year in the Hamptons, Miller noted, declining only 4.9 percent, to 1,437 listings from 1,511 listings.

That said, the second quarter is “shaping up to be more consistent with seasonal trends,” Miller said, noting the increased activity he is seeing now.

Ernie Cervi, a managing executive director at Corcoran’s Bridgehampton’s office, noted that his agents have been busy in recent months.

“This is our season,” Cervi said. “This is when we’re the busiest.”

The walk is obviously a fundraiser that will cover 5k or a little over 3 miles with a $25 entrance fee. There will also be a GRAND PRIZE to the person who raises the most money! Now, just know I will website and ARF’s website. be the one who raises the most. YOU GOT A BONE TO PICK WITH THAT?! If your interested in hanging with Bella, Russell, Jill Rappaport and me you can get more info from Bay Street theatre on their

Now it’s a good time to paws and get the latest news on Hamptons real estate as Douglas Elliman released it’s latest “Elliman Report: Hamptons Sales 1Q 2013.” As you’ve been hearing the market has been brisk the past few months and the new market report confirms it. 2013 started at a rapid pace tail end of the year. If you want more details you can download a copy of the report from Douglas Elliman. with lots of activity and less inventory. While prices slipped slightly, appraiser Jonathan Miller of Miller Samuel suggests this may be due to many high end sales in the prior quarter happening because of tax-incentives to close by the

Finally, some have a bone to pick with the Hamptons and the fact it’s just gotten too darn expensive out here! Recently I had a chance to sit down with my friend author Stephen Gaines and LTV host and Southampton Press editor Dawn Watson about the state of the Hamptons economy. Take a look and in the meantime, I’ll stop hounding you with my horrible puns!

According to Town and County Real Estate, home sales fell nearly 20 percent in the quarter in the Hamptons, while the median home sale price fell 8 percent to $750,000. The company said many of the sales that hit the books in the first quarter actually originated in the fourth quarter of 2012, when the region was still reeling in the aftermath of Sandy.

Sales in the $1 million to $2 million range fell 15 percent, according to the report, while sales in the $3.5 million to $5 million range dropped nearly 53 percent.

On Town and Country’s report, Bridgehampton sales represented a bright spot, recording a 150 percent jump in sales in the $1 million to $2 million range. Also, Bridgehampton was the only area to record sales in the $5 million to $10 million range.

Meanwhile, a report by Brown Harris Stevens cited a 13 percent drop in average sales price, a decline the company blamed on a rush of fourth quarter buyers who looked to close on their homes before capital gains taxes rose in 2013. The company also saw a 13 percent drop in closings in Hamptons and a 40 percent drop in sales $4 million and above. Like Town and County, Brown Harris Stevens saw a spike in Bridgehampton, where sales above $4 million rose 80 percent.

Lastly, real estate firm Douglas Elliman saw similar drops, citing a 5 percent drop in median sales price, a 29 percent drop in average sales price and a 5 percent drop in listing inventory.

On a positive note, the Elliman report claimed the number of sales in the Hamptons jumped nearly 21 percent.

According to Town and County Real Estate, home sales fell nearly 20 percent in the quarter in the Hamptons, while the median home sale price fell 8 percent to $750,000. The company said many of the sales that hit the books in the first quarter actually originated in the fourth quarter of 2012, when the region was still reeling in the aftermath of Sandy.

Sales in the $1 million to $2 million range fell 15 percent, according to the report, while sales in the $3.5 million to $5 million range dropped nearly 53 percent.

On Town and Country’s report, Bridgehampton sales represented a bright spot, recording a 150 percent jump in sales in the $1 million to $2 million range. Also, Bridgehampton was the only area to record sales in the $5 million to $10 million range.

Meanwhile, a report by Brown Harris Stevens cited a 13 percent drop in average sales price, a decline the company blamed on a rush of fourth quarter buyers who looked to close on their homes before capital gains taxes rose in 2013. The company also saw a 13 percent drop in closings in Hamptons and a 40 percent drop in sales $4 million and above. Like Town and County, Brown Harris Stevens saw a spike in Bridgehampton, where sales above $4 million rose 80 percent.

Lastly, real estate firm Douglas Elliman saw similar drops, citing a 5 percent drop in median sales price, a 29 percent drop in average sales price and a 5 percent drop in listing inventory.

On a positive note, the Elliman report claimed the number of sales in the Hamptons jumped nearly 21 percent.

There were 347 transactions in the three months ended March 31, up from 287 a year earlier, as buyers of less-costly homes jumped into a recovering market, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said in a report today. The median sale price fell 5.1 percent to $740,000, reflecting a drop in deals for the most expensive homes.

An expected Jan. 1 jump in capital-gains taxes, part of the so-called fiscal cliff that ultimately was averted by a congressional agreement, prompted a surge in year-end luxury- property sales. In the fourth quarter, 49 Hamptons homes sold for at least $5 million, the most in at least six years. In the first three months of 2013, only eight such properties sold, the fewest since 2009’s first quarter, when sales of all types of Hamptons homes reached a record low.

“This was clearly related to the fiscal-cliff tax incentive to close before the end of the year,” Miller Samuel President Jonathan Miller said in an interview. Higher-priced “transactions were poached from the first quarter.”

The median price of all luxury properties, defined as the top 10 percent of sales by price, dropped 26 percent to $3.68 million in the first quarter. The most expensive home to trade hands was an oceanfront estate on Morrison Lane in Water Mill, which sold for $17 million, Miller said. ‘More Normal’

“You had a lower level of high-end activity, but we’re anticipating a more normal seasonal pattern” through midyear, he said.

Billionaire hedge-fund manager Steven A. Cohen agreed late last month to pay $60 million for a 10,000-square-foot (930- square-meter) oceanfront property in East Hampton, two people familiar with the matter said at the time. The sale of the home, on seven acres (2.8 hectares) with a tennis court and pool, wasn’t included in the first-quarter tally.

Homes of all price points are attracting buyers as New York City employment improves and international investors discover the eastern Long Island waterfront, Miller said. Wall Street executives, whose spending fuels the Hamptons market, last year received bonuses that were 8 percent higher than in 2011. Employees took home an average cash bonus of almost $121,900 as profits in the securities industry climbed threefold, New York state Comptroller Thomas DiNapoli said in February.

“If we didn’t have the fiscal cliff, we would have had an even bigger jump in sales,” Miller said. Faster Pace

The number of Hamptons homes listed for sale dropped to 1,437 in the first quarter, down 4.9 from a year earlier, Miller Samuel and Douglas Elliman said. The absorption rate, or time it would take to sell all homes on the market at the current sales pace, was 12.4 months, 22 percent faster than a year earlier.

“We’re starting to see the recovery taking hold, with prices slowly inching up,” said Gregory Heym, chief economist at brokerage Brown Harris Stevens, which also released a report on the Hamptons today.

The median price of homes of less than $1 million climbed 6.7 percent to $540,000 in the first quarter, the only category with an increase, Brown Harris said in its report. Homes in that price range made up 64 percent of all sales.

Bridgehampton was one of two Hamptons neighborhoods where the median price rose, according to Brown Harris. That market, where all transactions of more than $8 million took place, had a 29 percent median-price increase. In East Hampton, prices climbed 31 percent, the brokerage said.

According to Douglas Elliman data, there were only eight sales priced higher than $5 million in the first quarter of 2013. That’s a 46% drop from the same period in 2012. In contrast, a record 49 sales of $5 million or higher were logged in the fourth quarter of 2012.

There was a similar situation at the end of 2010 and beginning of 2011, said Jonathan Miller, CEO of Miller Samuel Inc., the appraisal firm that compiles and analyzes the Ellliman data. That’s when sellers feared the Bush tax cuts would not be extended, leading to 38 fourth-quarter sales in 2010 and just 11 in the following quarter.

“This is déjà vu, but déjà vu on steroids,” Mr. Miller said.

For the Hamptons market as a whole, first-quarter sales totaled 347, up 20.9% from year-earlier levels. Meanwhile, the median sales price eased by 5.1%, to $740,000, partially because of the dearth of high-end sales.

“In the Hamptons, there’s not a lot of transactions, so one or two of those big sales will make a big difference in what those prices look like,” said Dottie Herman, CEO of Douglas Elliman.

Brown Harris Stevens recorded similar trends, with the number of sales falling 13% from the first quarter and the median price slipping by 8% to $750,000.

“There was a scarcity of new development over the past five years,” says Susan de Franca, president and CEO of Douglas Elliman Development Marketing. “And there is a voracious appetite for New York.”

This has led many a developer in this city to set out a lavish spread for the well-heeled buyer.

“We’ve sold over $1 billion [of new construction] in the last 90 days,” says Kelly Mack, president of Corcoran Sunshine. “In the coming year, luxury buildings are going to dominate the market — more than half the properties that will open are expected to ask over $2,000 per foot. Developers are pushing the upper limits of luxury even higher. If you look at deals over $8 million, year over year, they’ve tripled.”

“Inventory levels are at or near the lowest levels I’ve ever tracked,” says Jonathan Miller, president and CEO of appraisal firm Miller Samuel. And prices are up. “It’s been happening for several years, but it really accelerated over the last six months.”

The hesitancy of buying an apartment off floor plans is a thing of the past. The forthcoming 150 Charles St. has in three months put about 90 percent of its 91 units in contract, at about $3,000 per square foot. (Last we checked in, the building had done $560 million in sales.) Its developer, Steve Witkoff, has his sights set on his next project, 10 Madison Square West, a somewhat more modest endeavor (in terms of pricing), rumored to be about $2,400 to $2,500 per square foot.

Developers PMG and JDS are preparing to build a 700-foot-tall tower at the Steinway building on West 57th Street (only about a block from One57), with plans for a 200-room hotel below 45 condo units, slated to be ready by 2015. “The building may grow to 900 feet,” says Kevin Maloney, principal of PMG, making it one of the tallest residential towers in the city.

Luxury developments are popping up all over town. From still-to-be-fully developed neighborhoods like Hudson Square, which is seeing the launch of Renwick Modern (with prices starting at $1.5 million and going up to $6.5 million, for 1,100- to 2,700-square-foot apartments) — to de Franca’s new project, the Marquand on the Upper East Side (where the starting price for apartments is $15 million).

At 56 Leonard in TriBeCa, half the 145 units are in contract. At 93 Worth, a few blocks away, 70 percent of the 92 units are in contract. The 104-unit 250 West St., at the edge of TriBeCa, which has been on the market since 2011, has seen 18 price increases and there are only four units left.

“What’s happening is really changing developers’ expectations,” says Louis Puopolo of Douglas Elliman, which is getting ready to unveil the Hill, at 87 Leonard, another building in TriBeCa, where price hikes seem limitless. The seven units in the condo conversion (which should be finished by the end of the year) will start at about $6 million.

“I don’t know what’s hotter than white-hot,” says Steve Kliegerman, president of Halstead Property Development Marketing. “We can achieve prices that a few years ago seemed unachievable. Pre-Lehman, we were reaching to attain these prices . . . I’m confident we’re surpassing pre-Lehman.”

The Schumacher

The Schumacher’s sleek sales office opened earlier this month on a Monday. By that Friday, the sales team had letters of intent in hand for half of the building’s 20 units. We understand why: The condos at the Morris Adjmi-designed Schumacher, an old printing house at 36 Bleecker St. in NoHo, are nice and roomy, ranging from 1,132 to 4,600 square feet (prices should start at $3 million and go up to $25 million for a penthouse). The kitchens are outfitted in marble; the ceilings are massive (over 15 feet high in some cases); and the interior courtyard is being done by Ken Smith (who designed the MoMA roof garden). A few days into the frenzy, developer Roy Stillman was on the phone with Fredrik Eklund of Douglas Elliman, who is heading up the marketing of the project with John Gomes. “Fred,” Stillman said, sensing something amiss in Eklund’s voice, “Are you OK?” Eklund insisted he was fine, but when pressed he admitted: “We only have 20 units in the building,” with something wistful in his voice. “It’s going to be gone soon.” Contact: 212-891-7676

10 Madison Square West

Like a kid lying awake waiting for Christmas, brokers have been waiting to unwrap the old International Toy Center since word leaked in 2011 about its pending conversion into the 10 Madison Square West condo complex by developers Steven Witkoff and Howard Lorber. Given its location (on the edge of Madison Square Park next to Eataly) and size (350,000 square feet), it seems destined to bring joy to many. And as a bonus, there will be a 10,000 square foot residents’ club. Although sales haven’t officially started, we hear that the building has had north of 1,100 inquiries. When the sales office opens next month, the brokers should be busy. Pricing isn’t set yet, but one can expect it to be somewhere between $2,400 and $2,500 per square foot. Contact: Kirk Rundhaug, Douglas Elliman, 2124182052

The Marquand

“We saw it like a vintage car,” says NirMeir, principal at HFZ, talking about his new development, the Marquand, at 11 E. 68th St. “[It’s] the chance to restore it to the way it should be — a jewel.” The jewel in question is a 100yearold Beaux Arts building on the corner of Madison Avenue and 68th Street. It’s a conversion of a 43unit rental into 30 spacious condos—with the help of the architecture firms Shelton, Mindel & Associates and Beyer Blinder Belle—starting at $15million. “It was crying out to be grand again,” says Douglas Elliman Development Marketing’s Susan de Franca. Everything is being refinished and updated to suit today’s barons of the Upper East Side: solid oak paneling, wide expanses of windows and limestone powder rooms. Residences go from a 3,795squarefoot fourbedroom up to 6,000 square feet for the sprawling penthouses. Contact: Madeline Hult Elghanayan, Douglas Elliman, 2124182028

160 E. 22nd St.

It might be a tribute to just how jaded the NewYork real estate observer has become to hear starting prices of $800,000 for brand new studios and immediately exclaim: “Whoa—cheap!” OK, the 81 condos in this 21story building being put up byToll Brothers (which is shooting for LEED certification) are not exactly inexpensive. But in a market where nearly every developer is starting at $2 million, this is awelcome change. (And the fact that it stands less than two blocks away from Gramercy Park is another point in its favor.) Clad in a smart, gray Indiana limestone, the building has units ranging from 575squarefoot studios up to more than 1,800 square feet and $5 million for a three bedroom. They’re outfitted with floor to ceiling windows, white oak floors, Miele cooktops and SubZero refrigerators. The sales gallery has been open less than twomonths, and more than a quarter of the units are in contract. Contact: Florence Clutch, Toll Brothers, 2123889194

35XV

The “XV” part of the name of this 55 unit Chelsea building could mean three things. It could mean “Xavier,” because the residences of this shiny, ultra modern will be above Xavier High School (the condos in the 24story building will begin on the eighth floor). And the developer, Alchemy Properties, was also no doubt thinking in terms of Roman numerals: This building is at 35 W. 15th St. But we like to think the “V” stands for “view.” Residents are promised “unobstructed light and air looking north, with views of the Empire State Building and, looking south, of the Freedom Tower,” says Ken Horn, president of Alchemy. The building has been on the market only for about a month, but it’s already sold about 20 units (at roughly $2,300 per square foot). The units range from865 square feet up to 3,831 square feet, but only one unit less than 1,000 square feet remains. Moveins are expected for 2014. Contact: Wendy Triffon, Alchemy Property, 2122443515

241 Fifth Ave.

After you’ve consumed a stack of ShackBurgers or stuffed yourself silly on Daniel Humm’s $195 Eleven Madison Park dinner menu, youmight want a place nearby to lie down. If 10 Madison Square West sells out, you could try this 20story, 70,000 square foot Fifth Avenue condo development sprouting up a couple of blocks north of Madison Square Park. The mixe duse building designed by Eran Chen (who had the distinction of designing 15 Union SquareWest) consists of 46 units, starting at $1.25 million for a 566 square foot onebe droom. The building also include two penthouses—at 2,706 and 3,080 square feet — that will likely be listed for more than $6 million each. The building will include 3,200 square feet of commercial and retail space on the ground level. Contact: Doron Zwickel, Core, 2126129607

According to Douglas Elliman data, there were only eight sales priced higher than $5 million in the first quarter of 2013. That’s a 46% drop from the same period in 2012. In contrast, a record 49 sales of $5 million or higher were logged in the fourth quarter of 2012.

There was a similar situation at the end of 2010 and beginning of 2011, said Jonathan Miller, CEO of Miller Samuel Inc., the appraisal firm that compiles and analyzes the Ellliman data. That’s when sellers feared the Bush tax cuts would not be extended, leading to 38 fourth-quarter sales in 2010 and just 11 in the following quarter.

“This is déjà vu, but déjà vu on steroids,” Mr. Miller said.

For the Hamptons market as a whole, first-quarter sales totaled 347, up 20.9% from year-earlier levels. Meanwhile, the median sales price eased by 5.1%, to $740,000, partially because of the dearth of high-end sales.

“In the Hamptons, there’s not a lot of transactions, so one or two of those big sales will make a big difference in what those prices look like,” said Dottie Herman, CEO of Douglas Elliman.

Brown Harris Stevens recorded similar trends, with the number of sales falling 13% from the first quarter and the median price slipping by 8% to $750,000.

There were 347 transactions in the three months ended March 31, up from 287 a year earlier, as buyers of less-costly homes jumped into a recovering market, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said in a report today. The median sale price fell 5.1 percent to $740,000, reflecting a drop in deals for the most expensive homes.

An expected Jan. 1 jump in capital-gains taxes, part of the so-called fiscal cliff that ultimately was averted by a congressional agreement, prompted a surge in year-end luxury- property sales. In the fourth quarter, 49 Hamptons homes sold for at least $5 million, the most in at least six years. In the first three months of 2013, only eight such properties sold, the fewest since 2009’s first quarter, when sales of all types of Hamptons homes reached a record low.

“This was clearly related to the fiscal-cliff tax incentive to close before the end of the year,” Miller Samuel President Jonathan Miller said in an interview. Higher-priced “transactions were poached from the first quarter.”

The median price of all luxury properties, defined as the top 10 percent of sales by price, dropped 26 percent to $3.68 million in the first quarter. The most expensive home to trade hands was an oceanfront estate on Morrison Lane in Water Mill, which sold for $17 million, Miller said.

‘More Normal’

“You had a lower level of high-end activity, but we’re anticipating a more normal seasonal pattern” through midyear, he said.

Billionaire hedge-fund manager Steven A. Cohen agreed late last month to pay $60 million for a 10,000-square-foot (930- square-meter) oceanfront property in East Hampton, two people familiar with the matter said at the time. The sale of the home, on seven acres (2.8 hectares) with a tennis court and pool, wasn’t included in the first-quarter tally.

Homes of all price points are attracting buyers as New York City employment improves and international investors discover the eastern Long Island waterfront, Miller said. Wall Street executives, whose spending fuels the Hamptons market, last year received bonuses that were 8 percent higher than in 2011. Employees took home an average cash bonus of almost $121,900 as profits in the securities industry climbed threefold, New York state Comptroller Thomas DiNapoli said in February.

“If we didn’t have the fiscal cliff, we would have had an even bigger jump in sales,” Miller said.

Faster Pace

The number of Hamptons homes listed for sale dropped to 1,437 in the first quarter, down 4.9 from a year earlier, Miller Samuel and Douglas Elliman said. The absorption rate, or time it would take to sell all homes on the market at the current sales pace, was 12.4 months, 22 percent faster than a year earlier.

“We’re starting to see the recovery taking hold, with prices slowly inching up,” said Gregory Heym, chief economist at brokerage Brown Harris Stevens, which also released a report on the Hamptons today.

The median price of homes of less than $1 million climbed 6.7 percent to $540,000 in the first quarter, the only category with an increase, Brown Harris said in its report. Homes in that price range made up 64 percent of all sales.

Bridgehampton was one of two Hamptons neighborhoods where the median price rose, according to Brown Harris. That market, where all transactions of more than $8 million took place, had a 29 percent median-price increase. In East Hampton, prices climbed 31 percent, the brokerage said.

“We had this mad rush at the end of the year and that poached first quarter activity largely in the high-end of the market,” said Jonathan Miller, president of appraisal firm Miller Samuel.

The average sale price dropped 29.4 percent, to $1.22 million from $1.72 million, compared to the same period in 2012, according to Douglas Elliman’s quarterly report, compiled by Miller. The average price of a Hamptons home in the fourth quarter of 2012 was $2.13 million, or 91 percent less than the previous quarter.

Average prices dropped in all Hamptons markets except for Bridgehampton, according to Brown Harris Stevens’ report. In Bridgehampton, prices increased 29.1 percent year-over-year to $2.13 million from $1.65 million, the report says.

The village of East Hampton posted the biggest year-over-year price decline, according to the Corcoran Group’s report. The average sale price for a home in East Hampton declined 76 percent year-over-year, to $1.41 million from $5.8 million, Corcoran’s report says.

Despite the price drops, the number of transactions increased 20.9 percent year-over-year, to 347 sales from 287 sales, Elliman’s report shows. The growth is the result of an increase in demand coupled with low mortgage rates, Miller said. However, since the previous quarter, the number of transactions fell 34.4 percent, to 347 from 529.

“The biggest characteristic in the market is actually what happened in the fourth quarter versus the first quarter,” he added. “The impact was quite profound on the East End.”

Indeed, the rush to complete transactions before the Jan. 1 deadline absorbed sales that normally would have closed in the first quarter, according to Brown Harris Stevens’ report. Some 239 sales closed during the first quarter of 2013 — 13 percent fewer than the first quarter of 2012, the report says.

In Manhattan and Brooklyn, a similar pre-fiscal cliff rush has meant “chronically low” inventory levels, as well as prices that have stayed steady. However, inventory hasn’t fallen nearly as far year-over-year in the Hamptons, Miller noted, declining only 4.9 percent, to 1,437 listings from 1,511 listings.

That said, the second quarter is “shaping up to be more consistent with seasonal trends,” Miller said, noting the increased activity he is seeing now.

Ernie Cervi, a managing executive director at Corcoran’s Bridgehampton’s office, noted that his agents have been busy in recent months.

“This is our season,” Cervi said. “This is when we’re the busiest.”

The number of homes listed for sale on Long Island (excluding the Hamptons) during the first quarter was lower this year than in any first quarter in the decade that Jonathan Miller, chief executive of appraisal firm Miller Samuel, has tracked the figure for Long Island.

Just 15,303 homes were on the market, according to the first quarter report he released Thursday in conjunction with Douglas Elliman Real Estate.

The report showed sales fell 14 percent quarter-over-quarter to 3,905, but stood 2.9 percent greater than the 3,795 recorded during the first quarter of 2012. (Generally, year-over-year statistics are better indicators of the market because it accounts for seasonal housing cycles.)

Long Island’s median sales price sank 2.6 percent on both an annual and quarterly basis, to $341,000. Broken out by county, the median sales price in Suffolk (excluding the Hamptons) was $295,000; in Nassau it was $388,000.

Whereas superstorm Sandy was cited as a big factor in a Hamptons market report released earlier this week, both Miller and Douglas Elliman chief executive Dottie Herman played down its affect on this report’s finding.

“People who want to live on the ocean, want to live on the ocean,” Herman said. “That’s never going out of style.”

Miller noted that even in the hardest-hit communities, in particular the South Shore of Nassau County, many would-be sellers are waiting out the rebuilding process before they list their homes. So while the number of South Shore sales fell by nearly a third to 107 in the first quarter, the median sales price of those homes slipped just 0.8 percent to $328,000.

However, in the long-term, the increased cost of home ownership in the area — from increased premiums, flood-proof construction and potentially higher property taxes to compensate for lost revenue — might yield a weaker real estate market.

Both Herman and Miller pointed to the inventory shortage as having the biggest impact on the market. Inventory on Long Island declined 24.8 percent year-over-year, leaving less than a year’s worth of supply — and that’s not because buyers are snapping up homes. Sales increased just 2.9 percent annually.

“What’s happening is fewer listings are coming on the market because you have a lot of people on Long Island with low or negative equity,” Miller explained. (A recent report found about one in 10 Long Islanders owes more on their home than it’s worth.)

Those owners, he continued, have no reason to sell because they can’t trade up, especially with today’s tight credit standards. That, in turn, impacts aggressive home hunters. Without as many suitable options for new purchases even they become reluctant to list their homes, which perpetuates the cycle.

“Inventory is falling far faster than sales are rising and it’s largely credit-related,” Miller said.

A 12.2 percent annual rise in newly pending home sales — or homes that entered contract during the first quarter — indicates that the inventory shortage could become even grimmer, which might finally apply some upward pressure on pricing.

That’s good news for Herman and her stable of agents, who have begun encountering bidding wars on particularly desirable properties. However, she noted that agents must be careful offers don’t outpace appraisals, otherwise the tight lending environment becomes an issue.

“Financing is still an issue on the Island,” she said, “it’s a little too tough to get credit.”

There were 347 transactions in the three months ended March 31, up from 287 a year earlier, as buyers of less-costly homes jumped into a recovering market, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said in a report today. The median sale price fell 5.1 percent to $740,000, reflecting a drop in deals for the most expensive homes.

An expected Jan. 1 jump in capital-gains taxes, part of the so-called fiscal cliff that ultimately was averted by a congressional agreement, prompted a surge in year-end luxury- property sales. In the fourth quarter, 49 Hamptons homes sold for at least $5 million, the most in at least six years. In the first three months of 2013, only eight such properties sold, the fewest since 2009’s first quarter, when sales of all types of Hamptons homes reached a record low.

“This was clearly related to the fiscal-cliff tax incentive to close before the end of the year,” Miller Samuel President Jonathan Miller said in an interview. Higher-priced “transactions were poached from the first quarter.”

The median price of all luxury properties, defined as the top 10 percent of sales by price, dropped 26 percent to $3.68 million in the first quarter. The most expensive home to trade hands was an oceanfront estate on Morrison Lane in Water Mill, which sold for $17 million, Miller said.

‘More Normal’ “You had a lower level of high-end activity, but we’re anticipating a more normal seasonal pattern” through midyear, he said.

Billionaire hedge-fund manager Steven A. Cohen agreed late last month to pay $60 million for a 10,000-square-foot (930- square-meter) oceanfront property in East Hampton, two people familiar with the matter said at the time. The sale of the home, on seven acres (2.8 hectares) with a tennis court and pool, wasn’t included in the first-quarter tally.

Homes of all price points are attracting buyers as New York City employment improves and international investors discover the eastern Long Island waterfront, Miller said. Wall Street executives, whose spending fuels the Hamptons market, last year received bonuses that were 8 percent higher than in 2011. Employees took home an average cash bonus of almost $121,900 as profits in the securities industry climbed threefold, New York state Comptroller Thomas DiNapoli said in February.

“If we didn’t have the fiscal cliff, we would have had an even bigger jump in sales,” Miller said.

Faster Pace The number of Hamptons homes listed for sale dropped to 1,437 in the first quarter, down 4.9 from a year earlier, Miller Samuel and Douglas Elliman said. The absorption rate, or time it would take to sell all homes on the market at the current sales pace, was 12.4 months, 22 percent faster than a year earlier.

“We’re starting to see the recovery taking hold, with prices slowly inching up,” said Gregory Heym, chief economist at brokerage Brown Harris Stevens, which also released a report on the Hamptons today.

The median price of homes of less than $1 million climbed 6.7 percent to $540,000 in the first quarter, the only category with an increase, Brown Harris said in its report. Homes in that price range made up 64 percent of all sales.

Bridgehampton was one of two Hamptons neighborhoods where the median price rose, according to Brown Harris. That market, where all transactions of more than $8 million took place, had a 29 percent median-price increase. In East Hampton, prices climbed 31 percent, the brokerage said.

Fear of higher taxes in 2013 drove a flurry of high-end house sales in the Hamptons at the end of last year. That front-loading of sales slowed down the top of the market in the first three months this year, experts said Wednesday, citing data from a report scheduled to be released Thursday by broker Douglas Elliman Real Estate and prepared by appraisal firm Miller Samuel Inc.

On the rest of Long Island — excluding the Hamptons and North Fork — housing inventory declined sharply in the quarter, according to the report. Houses listed for sale fell to 15,303 in the first quarter, down from 20,358 a year earlier, as homeowners wait to rebuild equity and see where prices head. Average prices rose in the first quarter to $435,082 from $415,243 a year earlier.

Hamptons houses sold for an average price of $1.2 million in the first quarter of 2013, down from $2.1 million in the previous quarter and $1.7 million a year earlier, the report said. The fall doesn’t signal a decline in prices so much as a shift in timing, said Jonathan Miller, president and chief executive of Miller Samuel.

Buyers, Miller said, tried to close “by Dec. 31 because the general assumption was a tax environment would be higher in 2013.”

Miller said 49 houses in the Hamptons sold for more than $5 million in the fourth quarter but only eight in the first quarter.

The so-called “fiscal cliff” threatened a mix of automatic tax hikes and spending cuts in 2013. Congress agreed to limit the tax hikes while increasing rates on the highest earners — those likeliest to be worried about capital gains on the sale of multimillion-dollar homes.

While the average price in the Hamptons swung, the median price was more stable, falling to $740,000, a 5.1 percent drop compared with a year earlier.

“The top end of the market has taken a breather,” said Douglas Elliman broker Paul Brennan. “Other than that everything is pretty normal.”

Judi Desiderio, chief executive of Town & Country Real Estate, which publishes its own market reports, agreed that sales in the high end fell in the first quarter. “The greatest gain in activity was seen in the $2 million to $3.5 million range, it went up 41 percent,” Desiderio said. “That’s huge.”

A. There is a considerable difference between owning a ground-floor outdoor space and one many stories above, says our experts, and each will cost you.

“Be prepared to pay dearly for it, and sadly, be prepared to compromise,” says real estate broker Gordon Roberts of Warburg Realty.

“Oftentimes,” he says, “fabulous outdoor space is attached to a not-so-fabulous interior space. In fact, it’s the fabulous apartment with fabulous outdoor space–add to that prime location and a drop-dead view– that will bring the most competition from other buyers, and possibly an aggressive bidding war.”

Overall, says appraiser Jonathan Miller of Miller Samuel, “Patios are less expensive.”

That’s because patios are attached to ground floor apartments, he explains, which cost less than higher-floor apartments (except in walk-up buildings).

Priced by square foot, says Miller, both patios and terraces are typically valued at around 25-50% of the apartment’s interior price per square foot.

Here are some ups-and-downs to consider as you weigh your options:

Privacy: “The townhouse garden may seem very seductive until you realize you have a live audience every time you use it, or possible complaints about your small, animated gatherings or smoky barbeques,” says Roberts. Privacy-wise, he notes, “the 57-foot wide townhouse that Madonna bought a few years ago for $40 million boasts a 3000 square foot garden with mature landscaping, but it is completely visible to neighbors in modest one-bedroom apartments nearby. A perfect stakeout for watchful paparazzi.”

Light: Ground-floor outdoor space is more likely to be surrounded by taller structures, meaning you may only have a few hours of sunshine a day.

Falling objects: Debris from higher-up apartments can be a problem whether your space is on the ground floor or above. “It could be very annoying if your penthouse terrace is below a neighbor who is in the habit of throwing their cigarettes out the window,” says Roberts.

The building comes first: You could spend a fortune on landscaping and irrigation of your terrace or roofdeck, only to have to clear it all off at your expense for major exterior work required by the building, notes Roberts. And typically none of that will be covered by your apartment insurance, says apartment insurance broker Jeff Schneider of Gotham Brokerage.

Leaks: If your roof deck or terrace has a drainage problem that damages your downstairs neighbor’s newly-renovated home, you may have a lawsuit or insurance claim on your hands. You may also spend a lot of money and time tearing up your space trying to find and fix the leak.

Critters: Rats, mice and ants tend to be more of a problem for groundfloor spaces, notes pest control expert Gil Bloom of Standard Pest Management. You can take preventive measures (no standing water where mosquitos can breed, keeping food and trash picked up, etc.), but if neighbors do not, it will be an uphill battle.

Wind: The higher up your terrace or roofdeck is, the more wind it is likely to be subjected to. Anything above the 30th or 40th floor is likely to be unusable.

It’s time to share my Three Cents Worth (3CW) on Curbed NY, at the intersection of neighborhood and real estate in the capital of the world…and I’m here to take measurements.

Check out today’s 3CW column on @CurbedNY:

Given all the hype about new development product entering the listing-starved Manhattan market over the next couple of years, I thought I’d take a look at the market share of co-ops and condos over the last decade (the boom and bust era), but in a different way. For the uninitiated, Manhattan co-op housing units outnumber condo units 3:1 (i.e. 75 percent v. 25 percent market share)…

[click to expand chart]

Today’s Post: Three Cents Worth: $3,000 is the new $1,500 in Manhattan [Curbed]
Three Cents Worth Archive Curbed NY
Three Cents Worth Archive Curbed DC
Three Cents Worth Archive Curbed Miami

It’s time to share my Three Cents Worth (3CW) on Curbed NY, at the intersection of neighborhood and real estate in the capital of the world…and I’m here to take measurements.

Check out last week’s 3CW column on @CurbedNY:

It’s no secret that the lack of supply has turned the housing market inside out right now. We are seeing multiple bids on a larger portion of the sales and no immediate relief in sight. I took a look at inventory trends over the past five years to explore how we got here. I separated out the market by re-sale and new development to explore the differences…

[click to expand chart]

Today’s Post: Manhattan Inventory on a Slippery Slope [Curbed]
Three Cents Worth Archive Curbed NY
Three Cents Worth Archive Curbed DC
Three Cents Worth Archive Curbed Miami

“The pace in these South Florida markets quickened,” said Vanessa Grout, CEO and President of Douglas Elliman’s Florida Brokerage. Inventory in Miami fell sharply as the number of sales jumped due to increased distressed sales and buyers seeking to purchase properties as prices rose in the area. “If progress continues as it has for the past two years, we should see distressed inventory continue to decline through the end of the year,” stated Grout. “As buyers see increased activity of the Miami market, they are moving quickly on purchases.”

In Boca Raton, prices jumped from last year’s levels, with double digit gains across the marketplace. Sales rose sharply above levels a year ago, and the pace of the market quickened as negotiability dropped.

“Price indicators in Fort Lauderdale rose as its condo market outpaced single family homes,” said Jonathan Miller, the author of the report. “Boca Raton also saw condominiums outperform single family homes as the number of sales increased. Inventory for condos in the area trended lower than in previous quarters. Marketing times dropped in the overall Lauderdale market, while the luxury market remained stable.”

The Palm Beach luxury market surged, with single family homes outperforming condominiums. “Unlike the markets in Miami, Boca Raton and Fort Lauderdale, where inventory levels lessened, in Palm Beach overall inventory levels remained stable. Luxury inventory rose from the prior quarter,” said Miller.

The latest data, released Thursday by Douglas Elliman Real Estate, show prices at the luxury end of the market (the top 10% of sales) have jumped significantly from a year ago. The average sales price for these high-end condominiums was $1.57 million in the first quarter of 2013, up 18.5% from the first quarter of 2012. Luxury single-family homes sold for an average of $2.02 million, an increase of 15.4% from the previous year.

Foreign wealth is pouring into Miami and nearby areas, but there’s now a shortage of inventory on the market as a result of the building slowdown during the downturn. “You’re seeing this almost release of pent-up demand into the market even though inventory is contracting,” says Jonathan Miller of Miller Samuel Inc., who prepared the report.

Several very high-end new buildings are currently under construction or soon-to-begin construction—and developers are specifically eyeing the lucrative overseas buyer, as the Journal wrote today in Mansion. Developers use design and amenities to target buyers from various regions and countries. For South American buyers, contemporary design is a big selling point, as are very large outdoor terraces for entertaining. Secured parking is particularly important to the Brazilian buyer, as many will keep their most expensive cars in the U.S., where security is less of a concern and bullet-proofing isn’t a necessary upgrade.

At Faena House, a coming Miami project by an Argentine developer, apartments will have sprawling terraces they’re calling “aleros,” a Spanish word for balcony. Prices there range from $2.3 million to $50 million.

Mr. Miller says about three-fourths of buyers of condos are purchasing with cash. He says the double-digit price increase isn’t being skewed by the higher-end sales or larger homes and condos, as average square-footage has remained flat. But average prices are still off by almost 37% from their peak, in the second quarter of 2007, before the credit crunch and housing-market crash. “That peak was artificial,” he says.

Last year, international buyers purchased a whopping $82.5 billion worth of real estate in the country, up from $53.4 billion in 2010, according to data from the National Association of Realtors seen by the Journal. International buyers, on average, spend about $400,000, twice as much as the average American buyer, the data showed. In Manhattan, roughly one-third of condominium and townhouse sales went to international buyers last year, real estate appraiser Jonathan Miller told the Journal. In new buildings, foreign buyers were responsible for almost half the total sales, Miller added.

Developers of high-end buildings such as the Baccarat Residences have wised up to this trend. Apartments at the Baccarat will sport kitchen cabinets that are several inches higher than those typically found in American kitchens, to cater to European preferences and allow for appliances such as woks.

“Americans are much more conservative, much like with fashion,” Tony Ingrao, the designer responsible for the Baccarat’s interiors, told the Journal. “There’s almost a global taste emerging.”

Developers are also approaching wealthy Russian buyers in the pre-construction phase to ensure that units will appeal to them and can be combined to create estate-style apartments, Edward Mermelstein, a prominent real estate lawyer who works with Eastern European investors, told the Journal. “Foreign capital is sort of greasing the wheels and making these projects go much faster than they’d normally go forward,” Mermelstein said.

And when foreigners look for apartments, they sometimes have considerations that may not be important to an American buyer. Russians put a premium on discretion and secrecy, as The Real Deal reported.

Shanghai native Emma Peng recently bought a one-bedroom condo at 400 Fifth Avenue, and one of her priorities was a south-facing unit, she told the Journal. Southern exposure, she said, is “very important to the Chinese,” as it maximizes daylight and is also culturally important.

A luxury apartment in New York’s trendy TriBeCa neighborhood will run you a cool $42 million. Lauren Schuker Blum has details. Photo: 250 West Street.

The four-bedroom, five-bathroom apartment sits atop 250 West St., a 12-story condominium development by El Ad Group where sales launched in 2011. The penthouse, one of three condos left for sale in the 106-unit building, was held off the market until this month.

On three of its sides, the 12th-floor penthouse has floor-to-ceiling sliding glass panels that open onto a 4,350-square-foot wraparound terrace. The unit has protected views of the Hudson River, the Statue of Liberty and the Empire State Building.

The private terrace has a Jacuzzi, an outdoor kitchen and barbecue, as well a children’s play area. The penthouse has a private entry through wrought-iron gates and a private lobby, which has room for a car as well as staff and personal security. From there, a private elevator rises into the penthouse.

The penthouse also comes with all the amenities available to residents at 250 West St., including a doorman, a library, a 61-foot-long indoor pool, a sauna, a fitness center and a children’s playroom. There’s also an interior courtyard and a 5,000-square-foot landscaped rooftop with a separate sun deck lounge. “It’s like having a private mansion in Manhattan, with all the advantages and amenities of an apartment building,” says Richard Cantor, principal of Cantor & Pecorella, the sales and marketing firm for 250 West St.

Condo sales in TriBeCa and adjacent SoHo have gone up, with the average sales price rising by 17.5% in the past year to $3.08 million in 2012 from $2.62 million in 2011, according to real-estate appraiser Jonathan Miller.

Ariana Meyerson, managing director at Cantor & Pecorella, has the penthouse listing.

TV personality Mary Hart and her husband producer Burt Sugarman, who created the Newly-Wed Game and the Richard Pryor show, are putting their Big Sky, Montana ranch on the market for $26.5 million.

The ranch sits inside the Yellowstone Club, a 13,600-acre private golf and ski community that lies about 20 miles north of Yellowstone National Park. Possibly the world’s only members-only ski resort, with 15 lifts and three lodges, the Club has roughly 400 members and in the past has counted among them NBCUniversal Chief Executive Steve Burke, former Los Angeles Dodgers owner Frank McCourt, Starwood Capital Group Chief Executive Barry Sternlicht and Bill Gates.

The Yellowstone Club was started in the late 1990s by timber baron Tim Blixseth and his wife, Edra. They divorced, and the club went bankrupt in 2008. Sam Byrne’s buyout firm, CrossHarbor Capital Partners, purchased the resort out of bankruptcy. Since taking over, Mr. Byrne has made improvements and added new members, including Justin Timberlake and Google Chairman Eric Schmidt.

Called Elk Horn Ranch, Mr. Sugarman and Ms. Hart’s property has a 7,000-square-foot main home with six bedrooms and seven bathrooms. There’s a detached garage with a one-bedroom apartment in addition to a hand-hewn one-room log cabin. There’s also a four-stall horse barn with a fully decorated rec room and kitchen upstairs.

There are only six parcels of this size in the Yellowstone Club. And the placement of Elk Horn Ranch within the Yellowstone Club is also unique, says listing broker Tim Murphy of Hall & Hall, because it is one of the few parcels in community that has direct access to the national forest, which leads into Yellowstone National Park.

Mr. Murphy says that Mr. Sugarman and Ms. Hart are selling the ranch because they already own another property within the Yellowstone Club.

The five-bedroom, eight-bathroom home has a large living room with a fireplace and a dining room that opens onto a covered outdoor patio with a stucco fireplace and a built-in grill. There’s also a den with a full wet bar and a large modern kitchen with two dishwashers and another fireplace.

On the second floor, there’s a master suite with a marble bath and urinal in the bathroom. “I have a urinal in all my houses—it solves the classic seat-up, seat-down controversy,” says Mr. Sonnenfeld. In the basement, there’s a large screening room that seats 16 people plus a lounge with a bar, a gym and a playroom.

The 2.4-acre property also has a terraced 44-foot-long swimming pool that Mr. Sonnenfeld and his wife, Susan Ringo, who is a producer on his films, built after they bought the house in 2004 for $2.4 million. They put a further $1 million into renovating the home and landscaping its grounds. The property also has 100-foot-tall white pine trees and is near several hiking trails.

Mr. Sonnenfeld and Ms. Ringo lived in this home full-time and have lived in East Hampton year-round since 1982. Mr. Sonnenfeld says they are now selling their home and leaving the Hamptons because their kids are grown and they have decided to move to Telluride, Colo., where they have long had a second home. He says they don’t need two houses anymore since they go on location for work.

“We’ll miss our friends and home in the Hamptons, but figured that by leaving, it opens up valuable tables at Nick and Toni’s and the American Hotel,” jokes Mr. Sonnenfeld, referring to the East Hampton restaurant and Sag Harbor hotel, respectively.

Peter Turino of Brown Harris Stevens in the Hamptons has the listing.

So last year, Paulo Bacchi, a well-known furniture-maker and designer from Brazil, was hired to create a new look. Now, the model has white leather sectional sofas, sandstone tile floors and other contemporary furnishings. Mr. Bacchi, CEO of design retailer Artefacto, also put the designs on his company’s website, which Ms. Ordover says helped introduce more Brazilians to the building. Fifteen units sold within the first month after the switch. Today, only one of the 306-unit building’s apartments remain—and about 30% of buyers are Brazilian.

With sales to overseas buyers surging, U.S. developers are increasingly designing for a global audience. New buildings and residences now have kitchens outfitted with wok burners to attract Asian buyers. Others have European-style bathtubs and bidets for Western tastes. South American-inspired residences include sprawling balconies that can accommodate large extended families for dining and playing games.

“I can look at an apartment or house and almost figure out the nationality of buyers who are there,” says Mark Zilbert, president and CEO of Miami-based Zilbert International Realty. “Whether it’s deliberate or not, [developers] are putting in a lot of features that appeal to that taste and color palette.”

The designs are driven by a robust appetite from the international jet set looking for second homes in the U.S. In 2012, international buyers purchased $82.5 billion in residential real estate in the U.S.—up from $53.4 billion in 2010, according to the National Association of Realtors. On average, international buyers spend about twice as much as a typical American buyer, according to NAR, with an average purchase price of $400,000.

In Florida, 26% of all home sales went to buyers from outside the U.S. in 2012, making it the state with the largest number of foreign buyers, according to NAR. In Miami, about 60% of buyers came from overseas last year, according to the Miami Association of Realtors. In New York City, real-estate appraiser Jonathan Miller estimates that as much as one-third of condo and townhouse sales in Manhattan went to international buyers last year. In new buildings, as many as half of the buyers were foreign.

To sell the Baccarat Residences, a 50-story glass condominium tower under construction across from the Museum of Modern Art in midtown Manhattan, a model set up in the building’s showroom includes striking materials like lacquered ziricote-wood walls and a crackled bronze sculptural wall embedded with tiny pieces of glass made by a British artist. Each residence will have a custom Baccarat fixture, and kitchens have sleek cabinetry, electromagnetic cooking surfaces and Miele appliances. Cabinets are several inches higher than in typical American kitchens, in keeping with a more European look and to allow room for exotic appliances like woks.

It’s a look designed to appeal to a global palate: “Americans are much more conservative, much like with fashion,” says Tony Ingrao, the designer who is creating the interiors. “There’s almost a global taste emerging.”

The building, designed by Skidmore Owings & Merrill, will have 61 condos priced from $3.5 million to $60 million when completed in 2014.

In Miami, marketers at Vizcayne, twin 49-story towers in downtown Miami on Biscayne Bay, created model units for a designer showcase outfitted by interior designers from five different countries—Venezuela, Brazil, Spain, Colombia and the U.S. “It’s really about the nuance,” says Philip J. Spiegelman, who handles marketing for the developer. “Colombians may like very modern-contemporary, while the Brazilians may like something more conservatively contemporary.” Before the international models were created, 653 of the 849 apartments were unsold. Sales began in March 2011, and today, about 150 units remain, with prices ranging from $300,000 to $2.2 million. Most buyers are coming from Argentina, Venezuela and Brazil.

Natalie Brabner, a 38-year-old fitness trainer from São Paulo, recently paid $1.8 million for a three-bedroom unit in Echo Aventura on the water near Miami. When it opens—construction is expected to begin later this year—apartments will include extra-large balconies with outdoor kitchens. “Brazilians, they love to spend their afternoons hanging out and making a little barbecue,” Ms. Brabner says. And the maid’s quarters within the apartment were also appealing in case the couple decided to travel with a maid or nanny in the future. “It’s a different lifestyle in Brazil, and you can afford that,” she says.

At Faena House, a coming Miami complex by an Argentine developer with prices ranging from $2.3 million to $50 million, developers are calling the sprawling balconies “aleros,” a Spanish word for patio.

Because security is less of a concern in Miami than it is back home, Brazilians often choose to purchase and keep their most expensive cars in the U.S., where they cost less and don’t require extra safety features, like bulletproof windows. As a result, many of Miami’s newest buildings include elaborate private garages within larger parking garages and expansive private terraces.

Lambert Ranch, a master-planned community in Irvine, Calif., was built with Asian buyers in mind. To observe feng shui principles, an elaborate “ming tong” ceremony was held before construction; it involved burying gold coins throughout the property to symbolize good fortune. Floor plans also observed feng shui: Stairwells, for example, don’t directly face the front door, for ideal energy-flow. Homes, which typically cost between $900,000 and $1.5 million, also come with optional wok kitchens, a separate space for aromatic cooking. So far, about 65% of buyers have been of Asian descent, with many from China.

For condo buildings, developers say hotel-like services can help attract buyers from overseas. The Baccarat building will also include a large hotel component, with a concept by the creator of Starwood’s W Hotel brand. One57, a 90-story tower in midtown Manhattan that is currently under construction, will sit on top of a Park Hyatt hotel.

When Emma Peng, a 20-year-old Shanghai native studying at New York University, purchased a one-bedroom apartment in Manhattan’s 400 Fifth Ave., the building’s amenities, including concierge service and an adjacent hotel where visiting friends can stay, were critical selling points. She was also looking for a south-facing unit. The southern exposure “is very important to the Chinese,” she says, both for cultural and practical reasons because it maximizes natural daylight. Ms. Peng, who is a junior, purchased the apartment with the help of her parents.

Size matters, too. Some very wealthy Russian buyers in the New York market have started partnering with developers before construction to make sure units in prime locations can be combined to create large, estate-size apartments, says Edward Mermelstein, a lawyer who works primarily with buyers from Russia and Eastern Europe. “Foreign capital is sort of greasing the wheels and making these projects go much faster than they’d normally go forward.”

Sezgin Yalcin, a senior manager at a financial-software company from Paris currently living in New York, sought out new construction when purchasing a pied-à-terre in midtown Manhattan. “When we moved to the U.S. the first time, we wanted to live in a glass building, like we’d seen on TV,” says the father of two. He bought a one-bedroom at the Orion, a glass condo building near Times Square with a three-story “amenity suite” and an indoor pool, with the help of Prime NYC, a local brokerage. “You have an image of what America is, and that was our image.”

SINGLE FAMILY There were 33 sales in the first quarter, 83.3% more than in the prior year quarter. The market share represented 37.9% of all Palm Beach sales, a significant share increase from 23.4% in the prior year quarter. The listing discount fell to 13.5% from 19.3% over the same period….

SINGLE FAMILY Median sales price edged 2.2% higher to $224,900 compared to the prior year quarter. Average sales price fell 3.6% and average price per square foot increased 8.8% over the same period. The average size of a sold property was 1,777 square feet, down 11.4% from the same period last year. There were 435 sales, 6.9% more than in the prior year quarter…

SINGLE FAMILY The average size of a sale edged 4.2% higher to 2,589 square feet from a year ago, not enough to account for the large rise in price indicators. Median sales price jumped 14.8% to $310,000 over the same period. The other price indicators also posted similar double-digit gains. The number of sales increased 7.4% to 523 from the prior year quarter…

But one market continues to thrive on the steadfast barrage of economic uncertainty: luxury housing.

“The U.S. is just coming out of a housing downturn and it’s become a global safe haven for investors,” says Jonathan Miller, chief executive of Miller Samuel, a New York-based real estate appraisal firm. “But this time it’s not carpenters and nurses quitting their jobs to become mom-and-pop investors; it’s billionaires looking to sink money into unique properties.”

Miller believes these unique properties have become a “new global currency,” as investors view prime trophy real estate as a safe, relatively low-risk place to park cash that hedges against inflation while diversifying an investment portfolio. Couple that with historic home price drops and the waning value of the greenback, and U.S. luxury homes present a compelling buying opportunity to investors from abroad. “I have heard these homes referred to as the most expensive safety deposit boxes,” muses Miller. And there’s something to the concept.

Take One57 in Manhattan. The up-and-coming 90-story glass high rise, which will boast views of Central Park, has experienced a flurry of multimillion-dollar sales activity, particularly among foreign investors from Russia, South Korea, and China. Just recently, a Chinese mother plunked down $6.5 million on a condo there for her daughter, for when she attends an American university. The daughter is two years old. The World’s Most Expensive Cities For Luxury Real Estate Morgan Brennan Morgan Brennan Forbes Staff The Era Of The $100 Million House Morgan Brennan Morgan Brennan Forbes Staff Real Estate Tourism: Who’s Really Buying America’s Homes? Morgan Brennan Morgan Brennan Forbes Staff The Most Expensive Billionaire Homes In The World Morgan Brennan Morgan Brennan Forbes Staff

Across the park, inside the famously elite limestone building known as 15 Central Park West, a Russian billionaire heiress plunked down $88 million on the lower penthouse, last year. Amid messy allegations that the purchase was actually a front for her divorcing father, Dmitry Rybolovlev, to stash cash, the apartment is rumored to be scantly furnished and rarely used.

“We have seen a lot of negative sentiment in emerging markets that is definitely driving interest toward our hard assets that are easy to sell, the easiest of which is real estate in the best locations in the country,” explains Edward Mermelstein, a real estate attorney with Rheem Bell & Mermelstein who has handled sales for many high profile Eastern Europeans. “If you’re presenting an easy investment to a foreigner hailing from a difficult economic situation, what’s easier than an apartment overlooking Central Park?”

Russians and Chinese enjoy attention for their big-ticket purchases but Mermelstein says investors are now coming from other countries too. “Malaysians, Singaporeans, and Koreans are calling on a regular basis and these were not the typical calls coming in a few weeks ago,” he says, noting that recent inquiries haven’t simply centered around real estate investment but increasingly around visa and immigration status as well – a sign that some of these newer buyers are looking to relocate their families as political uncertainties like tensions on the Korean Peninsula mount. Inventory that has been the most in-demand among his international clients: homes priced $5 million and higher.

“All of my clients call it a hedge against every other market,” says Mauricio Umansky, co-founder and chief executive of The Agency, a Los Angeles area luxury real estate firm. “They see real estate as a hedge against inflation, against the commodities markets, and a safe haven from international political risk.”

The properties posing the most promise among safe-haven investors: highly unique, irreplaceable structures (whether due to construction costs or building regulations) on coveted swaths of land in desirable internationally recognized locales like New York, Miami, San Francisco, and Los Angeles. In high-rise-centric Manhattan, the most sought-after properties are prized condominiums touting enviable views of Central Park from massive mansion-like layouts in ultra exclusive buildings with world famous addresses.

In Los Angeles, it’s all about the land. A parcel of flat acreage (a rarity in the hilly city) inside a gated community like Beverly Park is especially coveted. Beverly Hills and second home markets like Malibu, where an oceanfront compound recently commanded $75 million from a Russian couple (who reportedly paid using briefcases filled with cash), have been the hottest targets of wealthy investors. For some buyers, particularly Asian buyers, branded projects like the Ritz Carlton Residences at LA Live have been alluring for the sense of stability a global brand name elicits.

“People have wanted to take as much money out of their countries as possible so they look to buy mega mansions,” explains Umansky, adding that currency exchange rates coupled with the fact that quality inventory is at an all-time low have fueled a significant number of high-end purchases. Buyers hail from China, Russia, and, increasingly, thanks to massive tax hikes, France and Italy. “I know people who are coming out here and buying real estate, telling me they are planning to move out three years from now.”

Further north, Silicon Valley experiences similar behavior. “The two major buyers within Silicon Valley right now are international buyers, generally investors of trophy homes, and young tech looking to diversify their portfolios” says Ken Deleon of Deleon Realty, a Silicon Valley-based luxury realty firm.

Deleon, who spent two weeks in China recently, says 15% of his clientele hail directly from there, while another 35-40% are first generation Chinese. These investors have increased activity due to caps on homeownership in communist-run China and fears of eminent domain. A growing number of Indians and Russians have jumped into the market as well. “They feel that Palo Alto is a safe place to put their money with good upside potential, but more importantly as a means of diversifying funds abroad.”

The same, he says, is true of his domestic tech clients, many of which are early employees of Google and LinkedIn. “They have $50 to $100 million in equities and then they put another $10 million into a luxury home… because they still view the stock market as volatile and real estate is a good diversity hedge for them.”

Palo Alto median home prices have risen 12% since the start of the year thanks to record low inventory levels and outrageous bidding wars that have erupted over what is available. Interestingly, Chinese buyers have been a huge driving force behind the price battles, comprising about one-third of all winning offers. “They are here one week, view 10 homes and put an immediate cash offer, non-contingent, in on their favorite. They want to win that one and a $100,000 to $200,000 counter offer will not get in their way.” Of the most interest to foreign buyers looking to invest: multimillion dollar condos in new buildings that will sit there uninhabited, save for the occasional visit, once or twice a year.

In 2011 Russian billionaire Yuri Milner sunk $100 million into a 25,545 square foot Los Altos Hills mansion, breaking national sales records. When the venture capitalist, who resides primarily in Moscow, purchased the secondary home he reportedly had no immediate plans to move in; last summer, as the Santa Clara County tax assessor’s office slapped a fair market value on the home of $50.3 million or 50% less than Milner’s purchase price, rumors surfaced that he still hadn’t occupied it.

In November another Silicon Valley home fetched an even higher, even more astounding sum of $117.5 million. This time from an Asian billionaire: the nine-acre Woodside estate was reportedly snapped up by Japan’s second richest man, Masayoshi Son. Like Milner’s conquest, the price trumped market comparables, for example the nearby 92-acre Flood Estate listed for $85 million.

“People today are looking at the unique properties as they would a piece of art, fine jewelry or another collectible item,” notes Ron Shuffield, president of EWM Realty International, a Miami-based luxury real estate affiliate of Christie’s. It’s a sentiment that has been echoed by luxury real estate experts in major cities across the U.S. and the world, for that matter.

Another market that has been flooded with high-end investment activity is indeed Miami. The South Florida city has been an urban safe haven from international political instability for decades, but recently, it has welcomed an unprecedented surge in buyers of super luxury homes. Foreigners account for more than 60% of luxury property sales, most notably from Brazil, Venezuela, Argentina, Mexico, Russia, and Europe. These buyers sink money into waterfront mansions on elite islands like Indian Creek or newly constructed condo penthouses on South Beach.

Since late the second half of 2011, Miami real estate has clocked one record-breaking sale after another, including an Indian Creek compound that fetched $47 million from a Russian billionaire in what, to date, remains county’s most expensive home sale. Luxury activity has become so great in the area that the Shuffield’s firm alone is averaging one $1 million-plus sale per day. And like Palo Alto, an increasing number of rich Americans have jumped into the ultra luxury market with similar investing goals, particularly Northeasterners lured by the lack of state income tax.

Deleon, Shuffield and others say the record prices need to be understood on a global level. Buyers, they explain, aren’t house hunting using local market comparables. Rather, they’re shelling out large unprecedented sums based on price per square foot comparisons to other trophy homes located in other major cities around the world. And when they do that, prices stateside seem, surprisingly, like a billionaire’s bargain. “When you start comparing prices in Miami to London, Paris, Hong Kong, New York and Beverly Hills, our prices are so low,” says Shuffield. Seconds Deleon: “Compared to Seoul, Tokyo, Shanghai, our prices are cheap. That will be the new frame of perspective.”

It’s a good day. Douglas Elliman just published their 1Q 2013 reports for Miami, Boca Raton, Fort Lauderdale and Palm Beach housing markets that we author. The markets are generally ramping up every where with rising prices and sales, falling inventory and lower (but still high) distressed activity.

Here’s a quick and short recap of all 4 markets – there’s a lot more detail to be found in each Elliman Report.

Miami (Coastal Communities)

One of the key characteristics of the Miami market has been the falling market share of distressed real estate (short sales + foreclosures) and the rise of the high end market. Distressed sales accounted for 37.8% of the market in the first quarter, roughy the inverse seen 2 years ago when it was 62.9% of the market. The resurgence of the market is occurring without much help from lenders: 78.2% of distressed condo sales were bought with cash and 73.6% of non-distressed were bought with cash. Not much of a difference.

The luxury market (top 10% of all sales) is pushing upwards faster than the overall market is expanding. The entry-point for condos and single family sales have grown 20.7% and 18.1% over the past year.

Boca Raton

Housing prices for condos and single families saw double-digit gains from the prior year and it wasn’t simply because larger homes were selling. The average size of a condo and single family increased 0.6% and 4.2% respectively. Sales are up and inventory is down.

Fort Lauderdale

Both sales and prices were up year over year with condos showing a higher rate of growth than single families. Marketing times shorted a bit and buyers/sellers were closer together on price – with the sellers more often than not calling the shots.

Palm Beach

The single family market showed more strength than the condo market in terms of sales and price growth but some of the disparity was caused by the shift in sizes for each. The average square footage of a condo fell 11.9% to 1,556 and the average square footage of a single family house increased 11% to 4,351. It’s a very small market with a lot of volatility in the metrics but the pace continues to rise.