17 Predictions For NYC's Real Estate In 2017

MANHATTAN — As the year wraps up, one thing hasn't changed in the city's real estate market: affordability still eludes many New Yorkers.

The average sale price for an apartment in Manhattan, including co-ops and condos, surpassed $2 million for the first time ever, according to City Realty, which predicts that 2017 will see average prices for condos drop for the first time in more than 5 years.

But that's little consolation given that 2016’s average Manhattan apartment price was 91 percent higher than just 10 years ago, City Realty found.

And rents are still pricey, even with many landlords offering a free month.

Manhattan’s average price for a one-bedroom in November was $3,440 a month, according to a Douglas Elliman report. Since landlords often require you earn 40 times the monthly rent, that means you’d need to earn $137,600 a year to afford it.

Here’s what experts are forecasting for 2017:

1. Interest rates will increase.

With the Federal Reserve, which raised interest rates for the first time in 2016 on Dec. 14, likely to increase rates over the course of the coming year, mortgage rates will likely inch up.

Mdrn. Residential’s Zach Ehrlich believes rate increases will positively affect the market by narrowing the spread between the asking price and bidding price.

"More sellers will adjust pricing to ensure they don't get caught in receding sales market," he said. "More buyers will lock-in and pull the trigger given upward trend of rates."

He also predicted that some potential buyers will opt to continue renting instead as their buying power decreases.

2. Landlords will continue offering deals.

The rental market will remain “soft” into spring, Ehrlich said, with inventory increasing as new projects open.

“Smart renters will negotiate with current management companies to limit or block increases and in some cases may even be able to get concessions on existing apartments if they speak up,” he advised.

The incentives, however, are largely in the new developments, said BOND New York’s Douglas Wagner, giving some renters a misconception about how widely available deals are.

“We’re seeing people coming in for lower-priced apartments thinking they’ll get a deal,” he said. “If you’re spending $4,200 a month you can get a free month, but not necessarily if you’re spending $2,400.”

3. There will be more migration between Manhattan, Brooklyn and Queens in all directions.

A rendering of the rooftop at Astoria's Graffiti House, which is attracting Manhattan and Brooklyn renters. Courtesy of AKI.

As pricey new developments floods the market in Long Island City and parts of Brooklyn, rents in Manhattan might not look too bad anymore, brokers said.

“The run-up in pricing in Brooklyn and Long Island City will get some residents to look back at Manhattan,” Ehrlich predicted.

The migration will go in all directions, said Eric Benaim, CEO of Modern Spaces.

“People will be more open to hopping around,” he said.

4. Developers will convert some rentals to condos.

With so much competition in Long Island City — where roughly 9,000 new units are expected in the latter part of the year — and in Brooklyn, where another 5,000 units are expected, the softening prices and competition will force some developers to rethink the rental market, Benaim said.

“Developers will change their business plans and convert their small rental projects to condos, or sell them altogether,” he believes.

5. The Second Avenue subway will boost the Upper East Side.

Regardless of whether the MTA meets its deadline at the end of this month, the Second Avenue subway is expected to be ready for the spring buying and rental season.

“Rental demand east of Third Avenue will change overnight,” Ehrlich said. “Expect more sales activity with units and buildings there as well. It’s easier for the average buyer to understand once they see subway opened and operating.”

6. South Williamsburg will become more popular.

With the construction of the mega-project at the former Domino Sugar site and the 18-month shutdown of the L train between Brooklyn and Manhattan pegged for 2019, the South Side of Williamsburg is gaining ground, many brokers said.

A rental with about 80 units and rooftop garden plots near the Marcy Avenue J, M, Z stop has been leasing briskly, said Mehul Patel, COO of Midwood Investment and Development, of the 282 S. Fifth St. project.

“It’s near the first stop over the [Williamsburg] Bridge, well placed considering eventual shutdown of L train,” he said.

But don’t discount the Northside just yet, especially as jobs are expected to move to 25 Kent Ave.

And while rental and condo prices will likely dip because of the L train, Benaim said, “2017 would be a good time to buy in the neighborhood, as prices will rebound afterward.”

7. Queens gets higher-end projects.

With prices in Long Island City rising, many see a spillover effect in markets like Astoria, Flushing and Forest Hills/Rego Park.

More developers are also eyeing Sunnyside, Woodside and Jackson Heights.

“You’ll start to see more modern, architecturally-driven product there,” said Benaim. “Queens is where it’s happening.”

8. Astoria is on the rise.

Already, a new wave of tenants from Manhattan and North and Brownstone Brooklyn are coming to Astoria, said Brett Harris, managing partner at AKI Development, whose Graffiti House building along Astoria's rapidly changing waterfront has such upscale touches as radiant heated floors, heated terraces and outdoor showers.

“We see this neighborhood taking off,” Harris said.

New ferry service to Astoria is expected to launch in the spring, the MTA is renovating the subway stations in the neighborhood, and it brought back the W train. The city earmarked $30 million to restore Astoria Park and is continuing to push it pricey streetcar project that would terminate in Astoria.

“That would be a major catalyst,” he said.

9. Attention turns to The Bronx’s Concourse...

Lee Williams, of Level Group, has seen an uptick of renters looking at The Bronx's Concourse neighborhood, which is just two stops from Manhattan on the express train and has one-bedrooms for $1,400 a month.

Plus the area has dry cleaners and grocery stores, he added.

10. ...and Riverdale neighborhoods.

Elizabeth-Ann Stribling-Kivlan, president of Stribling and Associates, is also seeing renewed interest in Riverdale.

“For $800,000 you can have an incredible view and amenities,” she said. “People don’t realize how close it is and that if you live outside of Manhattan, you can have a car.”

11. People just might pay $1,735 to live in a studio in Staten Island.

Urby Staten Island, on Stapleton's waterfront, is a project to watch for, said Kathy Braddock, of William Raveis Real Esate.

“I think you will hear more about Staten Island in the years to come,” she said. “You can get beautiful new apartments with all the amenities for $1,700.”

The trick is giving the ferry more cachet like ferries have in Sydney, Istanbul and Chicago, she said.

“Wall Street is becoming hipper and happening, and it’s a hop, skip and a jump to Staten Island. How cool would it be to take a ferry there and back?” she said.

12. Amenities will focus more on experiences than space.

Especially for millennials, buildings are more about lifestyle, so amenities will focus more on building-wide programing, like at 1 North Fourth St. in Williamsburg, where there’s yoga night, Monday Night Football and celebrations like National Cookie Day — anything that brings people together, said Andrew Barrocas, of MNS Real Estate.

“These are amenities that are not only going to attract people but keep them,” he said.

13. Yes, more affordable is coming.

More projects being built under the de Blasio administration's Mandatory Inclusionary Housing program will coming through the pipeline, said Jolie Milstein, president and CEO of the New York State Association for Affordable Housing (NYSAFAH), a group that represents affordable housing developers.

Communities whose neighborhoods have been targeted for the program, including a wide stretch of The Bronx along Jerome Avenue, East Harlem and East New York, however, have raised concerns about the impacts of new zoning and whether new buildings will be affordable enough for existing residents.

Milstein said her group plans to work with City Council and community leaders “to fully explain new projects, address concerns and reach positive resolutions.”

14. But $2 billion in affordable housing funds still hangs in the balance with a 421-a deal in limbo.

Until the agreement over 421-a, a tax break for certain newly built residential developments that expired in January, is finalized with a vote in Albany, the state legislature has refused to release $2 billion in state affordable housing funds.

“New Yorkers are at risk of losing thousands of already-planned affordable housing units,” Milstein said.

Other developers are pushing for the state to approve 421-a, as many can’t do rental projects without the tax break, they said.

“No one is doing land deals anymore,” Harris said. “We can’t make our numbers work. We’re waiting on the sidelines."

Instead, Barrocas said, many development firms have been looking at buying older buildings in prime neighborhoods that they can renovate to command higher rents, like the 890-unit former Mitchell-Lama complex at Kips Bay Court.

15. Affordable housing goes super green.

Affordable housing developers are embracing the latest in energy efficient construction — like Passive House standards — as a way to keep operating costs down, said Don Clinton, partner at Cooper Robertson architecture and design firm.

“This uptick is driven by sustainability advocates working together with the nonprofits who provide financing for affordable housing projects," he said.

“We'll likely also see affordable housing developments that are more sustainable and technologically advanced than a lot of their market-rate counterparts."

16. The wealthy will return to older buildings for security and privacy.

Buildings made of stone or brick are becoming popular again, said Richard Cantor at marketing firm Cantor-Pecorella.

“Top-level buyers [are] gravitating towards their thick walls, shapely windows, and quiet central courtyards that provide safe, bomb-proof security and privacy along with a sense of elegance and style that new glass towers can't match,” he said.

17. Bespoke kitchens are all the rage.

The "It" kitchen of 2017 from 443 Greenwich. Photo by Adrian Gaut and courtesy of MetroLoft.

“Look for more kitchen designs that truly embody the luxury lifestyles in leading properties,” Cantor said.

For instance, he noted MetroLoft's collaboration between the architectural firm CetraRuddy and cabinetmaker Christopher Peacock at TriBeCa’s 443 Greenwich.

“The look is perfect for New York in 2017: dark-stained white oak cabinetry with walnut interior surfaces and antiqued bronze hardware, and the island is topped with Calacatta marble, highlighted with polished stainless steel straps,” he said.

Map Exposes NYC's Sprawling Subway Deserts

If you ride the subway to work in the morning, it may feel at times like you're part of a herd of cattle being kicked in the shins on the way to the slaughter, but here's a news flash for you: it could be worse. That's because a majority of the land mass of the city is not in easy walking distance to a subway station, and do you know how much of a pain in the neck it is to own a car around here?

Chris Whong works for the Department of City Planning by day, making maps and doing data analysis, and in his free time he makes still more maps for "fun." One he drew up last yearcaught our attention. It shows the areas more than 500 meters from a subway stop as islands floating apart from the well-serviced swaths of the city. Whong dashed off the map in about 30 minutes and was surprised when it garnered mentions from New York media outlets.

"It's something everybody can relate to," he said, reflecting on the attention the first map got. "I probably would have put more effort into it had I known."

Now, after a longer late-night mapmaking session, Whong has a new and improved version of the subway desert map that is easier on the eyes. Also, Whong took into account criticism that 500 meters or 0.3 miles as the crow flies is not the best measure of walkability, so this time he used OpenTripPlanner data to base the buffer zone on 10 minutes' walking distance from a given subway stop.

The resulting vision of New York is at once obvious and fascinating. Manhattan is heavily serviced by the subway apart from the East Village, and the far east and west sides. Much of the Bronx outside of four corridors is out of reach, as is most of the vastness of Queens, southeast Brooklyn, and the high-priced Williamsburg waterfront. Some of these areas are serviced by express buses, Metro North, and/or Long Island Rail Road, which Whong said he considered including. Ultimately, though, he opted to keep the concept simple (and cut out Staten Island—sorry SI Railway riders).

"There are lots of iterations," he said. "People have said 10 minutes is not too far to walk to the subway and 15 minutes is a better threshold for deserts. I encourage everybody to copy my methodology. There’s plenty of room for more analysis, but this was my cutoff point."

For instance, he said, using the same data sets, it would be possible to then incorporate census data and count how many people are within a certain distance of all subway lines, or a particular one, and how many people served by a particular public institution have ready access to a particular area.

Whong said the map made him appreciate living close to a subway station, and that the map could serve as a prompt for exploring lesser-known parts of the city, not that he has used it that way yet.

"It gives you a visual cue to explore them a little bit," he said. "You can visualize yourself there, zoom in on the map and look around, and say, 'Is that a place I should visit?' Because they’re not easy to get to."

Whong called the map an "open data success story," and praised the Department of Information Technology and Telecommunications, OpenStreetMap, and OpenTripPlanner, for providing the data he used, and Carto DB for the mapmaking platform.

The New Yorkers with the longest commutes tend to be struggling financially—two thirds of New Yorkers who commute more than an hour each way make less than $35,000. Politicians and activists have floated proposals to reduce fares for Metro North and LIRR train trips within the city, which the MTA is very tentatively looking into. Express bus trips currently cost $6.50, and an LIRR peak ticket from Jamaica to Atlantic Terminal will currently set you back $10. The J train from Jamaica, on the other hand, is torturously local if you're trying to get anywhere near Manhattan.

First Section of Massive New York Wheel Put in Place

ST. GEORGE — The first part of the massive Ferris wheel expected to bring hordes of visitors eager for stunning views of the city to Staten Island is in place.

Crews spent hours pouring concrete foundation at the first section of the New York Wheel on Saturday.

About 450 trucks poured 4,000 cubic feet of concrete into the wheel's base that will hold up the 630-foot, 20-million-pound structure when it opens, which is expected to be next year.

"I would challenge anybody who doesn't believe to come down here and look at the $250 million we have in the ground," said Rich Marin, CEO of the New York Wheel.

"We're either delusional or something if we don't think it's real at this point."

The concrete pour was the first of two. The second is scheduled for June 25, Marin said.

The wheel's legs will be embedded into the concrete, which Marin expects to happen in October.

Crews worked for nearly 16 hours pouring 11 feet of concrete — making sure it stayed at the same temperature and dried evenly — that will eventually hold the $580 million attraction.

Despite the wheel moving a step closer to spinning on Staten Island's waterfront, the project has hit several snags including going nearly $300 million over budget andbeing embattled in a legal fight with two investors.

"Big projects have lots of bumps, everything seems to take longer than you think," Marin said.

"We're here and we're where we need to be to get this thing finished by the end of next year."

Marin called the lawsuits filed by the investors "petty annoyances," and added that "we're working through it."

Crews have been working at the site — adjacent to the St. George Ferry Terminal — for nearly 13 months, getting the foundation ready and building a 950-unit parking garage.

Marin hopes to get the first section of the garage, with 820 spaces for commuters and visitors, open in time for the Staten Island Yankee's opening day on June 24 this year.

When it opens next year, the center of the wheel will be slightly higher than the tallest building in the borough, the Castleton Park apartments on St. Mark's Place, Marin said.

This Week in Celebrity Real Estate Transactions

Taylor Swift, Sarah Jessica Parker, Matthew Broderick and Molly Ringwald

Whether you're an A- or B-list celebrity with an address in New York City, your real estate is bound to be ogled and envied by other New Yorkers.

In the past several days, a star-studded purchase, rental and future sale were all up for scrutiny, with the largest price tag affixed to the brick side-by-side townhouses former "Sex and the City" star Sarah Jessica Parker and actor husband Matthew Broderick bought for $34.5 million in the West Village, according to the Observer. Fused together, the houses at 273 and 275 W. 11th St. would create a 13,900-square-foot mansion with a 2,100-square-foot backyard. 

That's twice the size of the Greenwich Village townhouse at 20 E. 10th St. that the couple sold for $18.25 million last July.

Meanwhile, pop queen Taylor Swift has found sanctuary in a four-floor townhouse in the neighborhood while she renovates her $19 million TriBeCa pad, TMZ reported. The 5-bedroom, 6-bathroom rental, outfitted with a 2-story patio, a private garage and indoor pool, is costing her $40,000 a month (about half of the annual median incomefor the neighborhood). It's owned by SoHo House chief technology officer David Aldea.

Across town, John Hughes-muse Molly Ringwald has listed her two-bedroom, 1.5-bath East Village co-op at 122 E. 10th St. for $1.8 million, per an Observer report. The apartment features 10-inch exposed-beam ceilings in the living room, a skylight on the second floor, two wood-burning fireplaces, and marble mosaic floors — the accents of our wildest dreams.

City Hall Quietly Eyes Neighborhoods for New Jails to Replace Rikers Island

NEW YORK CITY — City Hall officials are quietly exploring a proposal to move inmates off Rikers Island and into renovated borough detention centers and two new jails in city neighborhoods, DNAinfo New York has learned.

The move runs counter to public statements made by Mayor Bill de Blasio last month where he called plans to shut down the city's controversial central jail a "noble concept" that was unworkable because it would "cost many billions" to do.

"In the end, you still are going to need facilities," he said. "Where are you going to put them?"

But city officials have identified possible locations on Staten Island, The Bronx, Brooklyn and Queens where two new jails — each housing as many as 2,000 inmates — could be built.

Space next to the NYPD’s newly opened police academy in College Point is one possible location, according to sources.

Another location is in Hunt’s Point on land next to where an 800-inmate jail barge is moored. The barge, known as the Vernon C. Bain Center, would also be shuttered under the plan, sources said.

City officials, who have been studying the idea of a Rikers shutdown for more than a year, have also identified two locations in Brooklyn as possible jail sites, sources said.

The plan could cost as much as $7 billion and would take over a decade to build the new facilities and perform renovations, sources said. In all the entire phase out of Rikers could take 30 years.

Rikers Island’s inmate population hovers around 10,000, but de Blasio has set a goal of reducing the size by a quarter.

Under the Rikers shutdown proposal, the two new jails and rehabbed correctional facilities would hold roughly 7,500 inmates, de Blasio’s target population.  

De Blasio spokeswoman Monica Klein said the mayor believes there are "many significant challenges" that must be addressed before Rikers could be closed.

"For years, an environment of violence, abuse and neglect has been tolerated at Rikers," she continued. "The situation is unacceptable and must change now, not another decade from now."

She added that the administration is "putting into place serious reforms, which are reducing violence in targeted areas and keeping the population down. Closing Rikers does not close the jail system, and we need to fix what's inside these buildings — wherever we put them."

'THEY'RE TERRIFIED'

Sources said City Hall officials see the $7 billion cost as an extremely rosy estimate, but perhaps the biggest obstacle to the proposal is the Uniform Land Use Review Procedure, or ULURP.

“They’re terrified of it,” one source said of the public vetting process on how land-use changes would affect their neighborhood.

If the city were to build new jails or make major renovations of existing facilities, then the changes must be approved through a years-long multi-tiered process, which includes votes by the affected community boards and the City Council.

City officials fear the resistance would slow the process to a standstill.

"It's daunting, It's big. It's huge money and it's huge political costs," said another source who helped study the issue for City Hall but asked not to be named to protect relationships. "Opening a homeless shelter is difficult. Imagine dropping a 1,500-person jail in someone's neighborhood."

Glenn Martin, a criminal justice reform advocate and founder of JustLeadershipUSA, said expending political capital seems to be one of the biggest obstacles to closing Rikers.

Martin spent six years in prison and has been named to a commission led by the former chief judge of the state, Jonathan Lippman, to examine a Rikers shutdown. 

"We're back to having a very political mayor in office. This is not Mike Bloomberg," Martin said. "The mayor is the main holdout in the growing chorus to close down Rikers."

RESISTANCE ALREADY

And the pushback to building neighborhood jails has already begun — before any ideas have been publicly floated.

After City Council Speaker Melissa Mark-Viverito called for an overhaul of the city’s criminal justice system in her state of the city speech Feb. 11 and announced the formation of the Lippman commission, Councilman Joe Borelli, who represents Staten Island’s South Shore, wrote a letter to the speaker telling her that he doesn’t want a jail in his district. 

His concern was that Mark-Viverito’s commission would identify a possible jail site on a tract of land in Rossville along the Arthur Kill that the city Department of Correction owns.

Borelli said he deduced the site would be considered using common sense but was called "crazy" for suggesting it. Over the years, the city's Economic Development Corporation issued a Request for Expressions of Interest for the 33 acre parcel but nothing ever came of it.

Borelli said another idea was floated of doing a land swap with the owners of the adjacent LNG tanks site where the city would trade the Arthur Kill side of the property in exchange for the backside of both properties and create a park.

The Staten Island Advance reported earlier this month that the owner of LNG tanks site hired an architectural firm to develop plans to turn the space into a "regional factory outlet center" with a fast ferry, movie theater and park.

"Somebody really smart decided we're going to put people who are potentially violent criminals on an island away from society. No one wants a jail next to their house," said Borelli, who called for the current Rikers facilities to be modernized to help reduce violence.

"I have not had one complaint from a constituent that visiting their family at Rikers Island was too far," he continued. "If it is, I really don't care. Putting this in an obscure residential part of Staten Island doesn't necessarily help make this more accessible to potential prisoners' families."

Borelli is right about the Rossville site — city officials identified it as a possible location for a new jail, sources said.

'FAIRER, BETTER AND MORE HUMANE'

Mark-Viverito stood behind the importance of shuttering Rikers.

"For too long, Rikers Island has been emblematic of the deep institutional flaws in our city's jail system. New Yorkers deserve a fairer, better, and more humane system that treats everyone with respect and dignity," Mark-Viverito said in a statement. 

The City Hall plan, which sources say could save more than $500 million annually, includes spending nearly $3 billion to expand or renovate the detention centers in Manhattan, Brooklyn and Queens.

The Manhattan center would house women, according to sources. 

And there are already blueprints for an expanded Brooklyn Detention Center, which had been closed for a decade when it reopened in 2012 with a limited population.

In 2010 Ricci Greene Associates and 1100 Architects created a design for an expanded, state-of-the-art Brooklyn Detention Center for the city’s Department of Correction. 

During the Bloomberg administration, then-Commissioner Martin Horn had envisioned reestablishing a community-based jail system where inmates were closer to their families, their attorneys and the courts.

“In Marty’s view, housing all the inmates on Rikers was not the most efficient policy,” said David Burney, who, at the time, was the Department of Design and Construction commissioner and was tasked with overseeing the redesign. “His idea was that what we should really be doing is putting the detention housing next to the courts.”

Burney said moving inmates closer to the courts was more sustainable and would have cut down on the costs of bussing inmates to and from Rikers.

The design would have more than doubled the number of inmate beds at the Brooklyn center to nearly 1,500 from 600.

But the center, which runs along Atlantic Avenue between Boerum Place and Smith Street, was never renovated because of neighborhood opposition. Horn also resigned as commissioner in 2009 before the Ricci Greene-1100 Architects study was completed.

His successor, Dora Schriro, opted against a community-based jail system and instead planned a new $600 million admissions facility at Rikers, which has yet to be built.

“We had done the design. It was ready to go,” Burney said. “But Marty Horn left. Dora came in. Her philosophy was different.”

The source who studied closing Rikers for City Hall said he didn't understand why de Blasio would nottake smaller steps as part of a compromise.

"Politically, it was disastrous not to say well, we can't move everybody but dammit we're going to move the juveniles," the source said. "You can take off a couple of other populations, the women's population, the mentally ill. You could maybe come to some place in between."

Gas Station Closures Could Spell Disaster in Another Sandy, Neighbors Say

LOWER EAST SIDE — As the last remaining gas station in Lower Manhattan prepares to close within the coming weeks to make way for office and retail development, residents and local community organizations fear the loss could jeopardize resiliency efforts in the event of a disaster similar to Superstorm Sandy.

The BP station at 300 Lafayette St. near East Houston Street will close on April 14, as reported by EV Grieve, and neighbors said they are losing a valuable resource that kept them afloat during the 2012 hurricane, allowing residents to fill their cars and power back-up generators for electricity.

Gasoline was already difficult to come by at the time, said a leader in resiliency efforts, and the worsening dearth of places to fill up could seriously strain the community if Lower Manhattan gets hit again.

“We learned from that gas shortage that occurred in Superstorm Sandy how important this resource is to a community, and now we find ourselves with no gas stations anywhere near,” said Damaris Reyes, executive director of Good Old Lower East Side and chair of emergency preparedness group LES Ready.

The Lafayette station — where Reyes recalls desperate drivers lined up in Sandy’s aftermath — was the neighborhood’s last remaining gas station. Two in the East Village — one on Second Street near Avenue C and another on Second Avenue near First Street — have shuttered since the hurricane and will be replaced by residential and commercial developments.

Taxi drivers and car owners have already felt the sting of the filling station famine, the Observer reported, but the shortage could have ramifications for resiliency that have gone largely unconsidered as developers grab up the land for more profitable enterprises, said Reyes.

“This does not do well for thinking about a balanced community with all of the resources that are necessary to help it be functional and resilient in a time of need,” she said. “It’s not just the residents who are at risk of displacement — it’s our resources.”

With the April closure, the last station below 14th Street will be a Mobil station on Eighth Avenue in the West Village. East Siders can still make the trek to a BP at 23rd Street off the FDR, though Reyes said the prices are sky-high and would still be a major inconvenience during a disaster.

Residents would most likely have to leave the city to power their vehicles or generators, said a concerned neighbor and leader of a local tenant advocacy group — significantly crippling community members’ ability to mobilize or supply electricity for their homes, either in preparation for a storm or in an effort to recover afterwards.

“Having to cross a bridge or go through a tunnel to get gas is not the best way to prepare for an emergency,” said Trever Holland, president of the Two Bridges Tower Tenant Association. “If there are no gas stations to go to, it becomes extremely problematic as to how you’re going to get gas for generators.”