Michael Stoler Newsletter
Construction and Real Estate
Residential real estate markets in the District have shown signs of improvement in recent weeks.
A major appraisal firm reports that New York City's co-op and condo market has remained surprisingly active in early 2013, following an exceptionally strong fourth quarter.
Apartment sales are up strongly from a year ago, and tight inventories are starting to nudge up prices across the board. One contact notes that year-end inventory levels were the lowest he has seen in more than 12 years. The apartment rental market, however, has leveled off; after rising at a roughly 5-10 percent rate in 2012, rents on apartments in both Manhattan and the outer boroughs are estimated to be running just 1-2 percent ahead of a year ago in early 2013.
An expert on northern New Jersey's housing market reports a pickup in activity and an improvement in the general tone of the market, describing the current season as the best since 2007.
Residential builders are reported to be increasingly optimistic--they anticipate a substantially better year than 2012 and are investing more heavily in new projects.
Single-family construction is seen as picking up, as multi-family construction retains momentum. While there remains a large overhang of foreclosed and distressed properties, many of these are expected to be snapped up by investors.
Commercial real estate markets across the District were mixed but generally firmer since the last report.
Office vacancy rates declined across most of the District, though rents in most areas continued to run below year-ago levels. Manhattan's office market was particularly robust, with vacancy rates continuing to decline and asking rents up 4 percent from a year ago.
In northern New Jersey and in the Buffalo, Albany and Syracuse metro areas, vacancy rates have declined since the start of the year, but rents continue to run 1-3 percent below early 2012 levels.
However, office markets in Westchester and Fairfield counties have been increasingly slack, with vacancy rates climbing to new highs and rents slipping roughly 4 percent over the past year. Market conditions in metro Rochester have been essentially flat.
Industrial markets have shown some signs of firming. In northern New Jersey, Long Island, Westchester and Fairfield counties, industrial vacancy rates have been steady since the beginning of the year, while rents are running 2-4 percent ahead of comparable 2012 levels. Industrial vacancy rates across upstate New York have continued to decline, reaching their lowest levels in three years, while rents have also drifted down.
Other Business Activity
Non-manufacturing contacts report little change in business conditions overall, though they have grown increasingly optimistic about prospects for 2013. Contacts in the manufacturing sector report a pickup in activity since the start of the year and are increasingly optimistic about the near- term outlook.
There are scattered signs of improvement in the job market thus far in 2013.
A growing number of manufacturing contacts report that they are increasing staffing levels and are increasingly inclined to do so in the near future as well.
A major employment agency reports that demand for full-time workers has improved slowly but steadily; while potential employers note that strong job candidates are increasingly hard to find, most continue to hold the line on salaries. The market for temps (contract workers) is described as very strong, particularly for one-day assignments.
Small- to medium-sized banks report steady demand for consumer loans but increased demand for all other categories of loans; demand for refinancing was unchanged.
Bankers report that credit standards were unchanged across all loan categories. Respondents indicate a decrease in spreads of loan rates over costs of funds for all loan categories--particularly in residential mortgages, where 40 percent of bankers indicate lower spreads and none indicates higher spreads. Most also indicate a decrease in the average deposit rate.
Finally, banks report decreased delinquency rates on commercial and industrial loans and especially on commercial mortgages but indicate no change for residential mortgages and consumer loans.
This Week on "The Stoler Report-New York's Business Report"
Premiering: Tuesday, March 19th at 11 PM "What's Happening in Williamsburg?"
The Stoler Report:-NY's Business Report: Healthcare Executives Outlook for 2013 - Part 1.
Andrew Barrocas MNS
Peter D'Arcy M & T Bank
Jared Epstein Aurora Capital
David Schwartz Madison Realty Capital/Silverstone Property Group
The Stoler Report-New York Business Report airs 15 times a week on CUNY TV and PBS
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A lively conversation with Eric Ripert, Le-Bernardin
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Michael Stoler is the President of New York Real Estate TV, LLC, the producer of "The Stoler Report" & "Building New York".
Mr. Stoler is a Managing Director at Madison Realty Capital, and can be reached at his office located at 825 Third Avenue, 37th Floor, New York, telephone 646-442-0717 firstname.lastname@example.org