Is It Worth Paying A Broker Fee In New York City?

By Marjorie A. Cohen | February 13, 2015 AAA |

The scenario: You are getting ready to move to New York City and are going to look for a rental apartment there. New York is a great city – vibrant, rich in culture and diversity – but you need to understand from the outset that it also has one of the most difficult-to-navigate real estate markets in the world. Finding an apartment that you like and that you can afford, particularly in Manhattan or Brooklyn, can be an experience best described as one filled with “shock and awe.” [Investopedia]

January 2015 Manhattan & Brooklyn Sales Market Snapshot

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Manhattan Trends:

• January 2015 was a slow month for Manhattan residential real estate, with decreases in contracts signed and increases in some negative market fundamentals including average time to sell and discount from last asking price.
• Average price per square foot jumped up 13% compared to January 2014, a significant annual gain. Average price increased by 4%, however median price remained nearly constant since last month and last year.
• Co-ops saw a large gain in median price, which increased 23% compared to last year. Co-ops also saw a significant decrease in average price per square foot.
• Inventory in January was up 6% versus last month, and 7% versus last year. Once again the entirety of the inventory gain was due to condo listings, which were up 13% from last year.

Brooklyn Trends:

• Average and median sales prices increased by double digits, 21% and 19%, respectively, while the average price per square foot increased 4% year-over-year.

 

• Brooklyn had a 32% increase in contracts signed versus January 2015. In January, 68% of buyers paid at or above asking price.

 

• Year-over-year total available inventory in Brooklyn increased by 28% while new listings increased 41%.

 

Click the images above to access the full report

Weekly Interest Rate Overview

The Markets.  Fixed rates on home loans rose in the past week in the aftermath of the strong jobs report. Freddie Mac announced that for the week ending February 12, 30-year fixed rates increased to 3.69% from 3.59% the week before. The average for 15-year loans rose to 2.99%. Adjustables were also higher, with the average for one-year adjustables up slightly to 2.42% and five-year adjustables increasing to 2.97%. A year ago, 30-year fixed rates were at 4.28%, which continues to be more than 0.50% higher than today’s levels. Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac — “Rates on home loans rose this week following strong economic data. The economy added 257,000 new jobs in January after robust increases of 329,000 in December and 423,000 in November. The unemployment rate edged up to 5.7 percent last month from 5.6 percent in December. Average hourly earnings rose 0.5 percent, following a 0.2 percent decline in December.”  Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.  

Current Indices For Adjustable Rate Mortgages
Updated February 13, 2015

	Daily Value	Monthly Value
	February 12	January
6-month Treasury Security	0.07%	0.08%
1-year Treasury Security	0.23%	0.20%
3-year Treasury Security	1.02%	0.90%
5-year Treasury Security	1.50%	1.37%
10-year Treasury Security	1.99%	1.88%
12-month LIBOR		0.622% (Jan)
12-month MTA		0.128% (Jan)
11th District Cost of Funds		0.692% (Dec)
Prime Rate		3.25%

January 2015 Manhattan Rental Market Report

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• The report found that during the month, all metrics used to examine the state of the city’s rental market shifted to the landlords’ favor.  In January, Manhattan rents rose slightly across all apartment categories, the vacancy rate fell, and landlords pulled back on their use of move-in incentives.

• When compared to December 2014, average rents in January climbed 2% for one- two- and three-bedroom homes.  However, the rise in price for studio units was more dramatic.  Apartments of this size increased in monthly cost by an average of 5%.
• In January 2015, the borough-wide vacancy fell to 1.60% from December’s rate of 1.74%, and is the lowest Manhattan vacancy rate we have seen since September 2014, when the rate was 1.42%.

• The Upper East Side had the lowest vacancy rate in the borough, at 0.99%, and was the only neighborhood in the city with a sub-1% vacancy rate.  This lack of inventory was caused, in part, by price-sensitive apartment seekers choosing new homes in this relatively affordable neighborhood.

• When examining incentives, 10% of rental transactions brokered by Citi Habitats offered a free month’s rent and/or payment of the broker fee to entice new tenants in January, down from 13% in December.

 

“Manhattan’s rental market had a strong start to 2015,” commented Gary Malin, President of Citi Habitats. “The increasingly competitive market was partly the result of pent-up demand. With the holiday season over, apartment seekers were back in the market full-force during January.  Would-be tenants wanted to take advantage of market conditions while they are still relatively favorable.  For those in search of value, now is the time to act.  Slowly but surely, we expect the rental market to continue its shift to the landlords’ favor as spring approaches.”

 

Click the image above to access the full report

 

Weekly Interest Rate Overview

The Markets.  Fixed rates on home loans fell in the past week, but the numbers were released before the strong jobs data came out on Friday. Freddie Mac announced that for the week ending February 5, 30-year fixed rates decreased to 3.59% from 3.66% the week before. The average for 15-year loans fell to 2.92%. Adjustables were mixed, with the average for one-year adjustables up slightly to 2.39% and five-year falling to 2.82%. A year ago, 30-year fixed rates were at 4.32%, which continues to be more that 0.50% higher than today’s levels. Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac — “Rates on home loans fell this week following the release of weaker than expected pending home sales, which fell 3.7 percent in December. Moreover, real GDP growth for the fourth quarter was 2.6 percent and the Institute for Supply Management reported slower growth in manufacturing last month, both missing market consensus forecasts.”  Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.  

Current Indices For Adjustable Rate Mortgages
Updated February 6, 2015

	Daily Value	Monthly Value
	February 5	January
6-month Treasury Security	0.06%	0.08%
1-year Treasury Security	0.20%	0.20%
3-year Treasury Security	0.87%	0.90%
5-year Treasury Security	1.30%	1.37%
10-year Treasury Security	1.83%	1.88%
12-month LIBOR		0.622% (Jan)
12-month MTA		0.128% (Jan)
11th District Cost of Funds		0.692% (Dec)
Prime Rate		3.25%

Weekly Interest Rate Overview

The Markets.  Fixed rates on home loans ticked up a bit in the past week. Freddie Mac announced that for the week ending January 29, 30-year fixed rates increased to 3.66% from 3.63% the week before. The average for 15-year loans rose to 2.98%. Adjustables were also higher, with the average for one-year adjustables up slightly to 2.38% and five-year adjustables rising to 2.86%. A year ago, 30-year fixed rates were at 4.32%, which continues to be more than 0.50% higher than today’s levels. Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac — “Rates on home loans ticked up this week for the first time in 2015 following positive home sales reports. New home sales surged 11.6 percent in December beating market expectations. Likewise, existing home sales rose 2.4 percent to an annual rate of 5.04 million homes in December.”  Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.  

Current Indices For Adjustable Rate Mortgages
Updated January 30, 2015

	Daily Value	Monthly Value
	January 29	December
6-month Treasury Security	0.07%	0.11%
1-year Treasury Security	0.17%	0.21%
3-year Treasury Security	0.84%	1.06%
5-year Treasury Security	1.28%	1.64%
10-year Treasury Security	1.77%	2.21%
12-month LIBOR		0.602% (Dec)
12-month MTA		0.121% (Dec)
11th District Cost of Funds		0.686% (Nov)
Prime Rate		3.25%