United States Property

New York’s Fifth Avenue has retained its top position as the world’s most expensive shopping street in the world, according to Main Streets Across the World 2006, with unit rental on Fifth Avenue commanding an average of of US$1.35m per 1,000 sq ft/93 sq m per annum.

Ranking

2006

Ranking

2005

Country City Location €/sqm/year
US$/sq ft
/
year

1

1

USA New York 5th Avenue

11,364

1,350

2

2

Hong Kong Hong Kong Causeway Bay

9,544

1,134

3

3

France Paris Avenue des Champs Elysees

6,775

805

4

4

UK London New Bond Street

5,667

673

5

5

Japan Tokyo Ginza

5,486

652

6

6

Ireland Dublin Grafton Street

4,496

534

7

10

Switzerland Zurich Bahnhofstrasse

3,517

418

8

7

Australia Sydney Pitt Street Mall

3,294

391

9

8

South Korea Seoul Myeongdong

3,169

376

=10

9

Germany Munich Kaufingerstraye

3,000

356

=10

12

Greece Athens Ermou

3,000

356

THE WORLD’S MOST EXPENSIVE SHOPPING STREETS

Source: Cushman & Wakefield

It’s better to value homes by floor space than the number of rooms, says Paula Hawkins

IN A NATION as obsessed with house prices as our own, there can be few homeowners who do not have at least a vague idea of what their property is worth. If asked to put a value on our homes per square foot, however, many of us would not have a clue. But pricing per square foot or per square metre is the standard in most other markets, and as more foreign buyers come to the UK it is becoming more common to think about property values in terms of floor space rather than the number of rooms.

“When you buy a property at the top end of the market say a flat in Sloane Square  you will usually see the size of the property quoted in square feet,” says Joe Martin, of the Royal Institution of Chartered Surveyors (RICS). But what you do not see is the price per square foot. “It has always bemused me: why we do not value property per square foot the way that everyone else does,” Martin says. “We have this fixation with the number of bedrooms, which I believe has had an adverse effect on the property market. It has led to us building smaller houses with lots of small rooms.”

Moreover, rooms in private homes are the smallest of all. “It is one of the quirks of history that social housing is generally bigger than private housing, because there are minimum standards for the size of rooms in social housing,” Martin says. The Parker Morris Standards, which were introduced for all council housing in 1969, state that there should be at least 33 sq m for the first occupant of a house, and an average 13 sq m for each additional person.

No such standards apply to private housing, however, which has meant that the rooms in our houses have been getting smaller and more numerous. According to RICS data, a typical house built today is 55 per cent smaller than one built before 1920. House size has not changed a great deal since the 1980s, but the number of rooms we squeeze into our homes is rising, due to the popularity of en suite bathrooms, utility rooms and home offices.

When you do take a look at the price of property per square foot, it becomes clear just how expensive UK housing is. The estate agent CBRE Hamptons International has found that, per square foot, Central London is the most expensive place in the world to buy a home. The CBRE Hamptons report shows that prime residential property in London costs about £1,200 a square foot, 20 per cent higher than the cost of property in New York. For “super-prime” properties, prices range from about £2,000 a square foot to a staggering £3,000 a square foot at the very top; this was the actual price achieved for an apartment sold recently in Chelsea Square.

Pricing per square foot allows international buyers a clear view of what they can get for their money. For example, while London’s average price is £1,200 and New York’s is £1,000, Tokyo property costs £900, Hong Kong £700 and Dubai property just £200 a square foot.

Maximum super-prime prices are, of course, much higher, with only Monte Carlo, at £2,800 a square foot, coming close to London prices.

There is obviously more to purchasing a property than price per square foot. Andrew Jones, a partner at the estate agent Knight Frank, says: “People want very different things from different cities. Each international centre has its own attributes, so a straight price per square foot comparison may not be that helpful.”

However, while there are plenty of other factors to consider when looking at properties to purchase, this should at least be one. Since most estate agents will now put the area of a property in square feet on the floor plan when marketing a home, you can do your own calculations to find whether you are getting good value. A higher overall price may be worth paying: for example, take two three-bedroom properties in London SW4 (Clapham). The smaller flat, which costs £275,000, has a total area of 649 sq ft, while the larger three-bedroom home near by costs £375,000 but has a total area of 1,082 sq ft. Measured in terms of space, the larger property is cheaper, costing £346 a square foot, while the smaller property costs £423 a square foot.

JOIN THE WORLD OF SPACE INVADERS

COMPARISONS may well be odious, but there’s no doubt that the world of property is increasingly obsessed with them. Everything that takes off in America comes to the UK eventually think super-size fridges and pre-nuptial agreements so we had better get used to square foot comparisons when we buy our homes.

Prices being quoted per square foot really started with new-build blocks of flats, but in a burgeoning property market this trend has now spread to homes of all kinds. The South East, as you might expect, has the highest values, with residential property in Central London the clear leader at £1,200 per square foot.

Guildford, voted one of the best places to live in Britain in a recent Channel 4 programme, is a far more affordable £249. Cambridge, boosted by an affluent educated elite and wealthy silicon-valley market, comes in close behind at £240, while Brighton, bolstered by its Soho-by-Sea reputation and its celebrity residents, follows closely with prices of £232 per square foot.

Rather surprisingly, homes in Lincoln are fetching an average £190 per square foot, ahead of Birmingham at £152, where smart flats in the old jewellery quarter have proved popular with young and well-off singletons. York probably counts as something of a bargain at £182, as does Bristol at £164 and Leeds at £147.

Bottom of the league, but top of the table for bargains, is Manchester, where prices are a very manageable £137 per square foot.

Source: Timesonline

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“For sale: residential property in attractive Manhattan locale. River views and gardens with fountains. Own private roads. High ceilings. Some renovations required. Currently occupied. Accept $5bn or near offer.”

No such classified ad has been listed, because word of mouth will suffice to attract buyers. Never mind that the price being asked will ensure that it goes down as the most expensive sale of a single property in the modern history of the United States.

Formally on the auction block is a pair of apartment complexes, called Stuyvesant Town and Peter Cooper Village, that bestride 10 city blocks on the East Side of Manhattan from 14th to 23rd Street flanking the East River. Together they comprise 110 buildings with 11,000 apartments.

The seller is neither a tycoon nor the city, but rather the insurance giant Metropolitan Life, which has traditionally held a huge portfolio of buildings across New York. It built the complexes at the end of the Second World War to provide comfortable, if unglamorous, homes for returning veterans.

Today, the chunky brick stumps that are the apartment buildings are still short on aesthetic appeal and living inside Stuyvesant or Peter Cooper can have the feel of belonging to an institution. Strict rules govern matters such as pets (very few are allowed) and sunbathing in the garden is also discouraged.

But Met Life has engaged in a $300m (£160m) prettification scheme over recent years, which prompted rumours of a likely sale. It is also trying to reinvent the two communities as a place for luxury rentals appealing to young professionals.

Today, there are 25,000 people in Peter Cooper and Stuyvesant and many are still more middle class than affluent. This is largely because about two-thirds of the apartments fall under complicated rent-control laws that restrict the owner’s ability to raise the rent.

Anyone spending $5bn, however, will need to find ways to maximise their rental returns. This will prompt fears that the days are coming to an end when the two communities offered sanctuary to middle-class families who would otherwise find few alternatives in overheated Manhattan. The complexes’ current residents range from nurses, firemen and police officers to teachers and students.

Suzanne Wasserman, a historian and long-time resident of the complex, said it meant the process of squeezing “people who aren’t just interested in money” out of Manhattan would accelerate.

Met Life is well used to seeking buyers for its properties. Last year alone, it sold a landmark tower at 1 Madison Avenue and the Met Life building, the skyscraper which used to be the Pan Am Building. The pair sold for $2.6bn.

Prospective bidders are said to be queueing already for Peter Cooper and Stuyvesant. Those expressing an interest apparently include UBS Bank, The Blackstone investment firm, a group of Dubai investors, and top New York property development dynasties.

Source: Belfast Telegraph

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Cynthia Creasey and Mack McCoy bought a four-bedroom house in Ballard in 1988 for $116,000. She loved its spaciousness, its lush garden and the suburban feel of their neighborhood.But McCoy, who grew up in Manhattan, longed for the city life. So the couple recently decided on a lifestyle change — and reaped a financial windfall in the process. They sold the house for $700,000, bought a two-bedroom condominium downtown for $450,000 and pocketed the difference.

The couple’s hefty payoff came from Seattle’s booming real estate market, which pushed median home prices to records in Seattle and King County in June.

Prices for single-family houses in King County increased nearly 16 percent in June, compared with the same month last year. And although lower overall, prices for condominiums actually outperformed that percentage gain slightly, according to a monthly report Thursday from the Northwest Multiple Listing Service.

In Seattle, house and condominium prices combined rose 11.5 percent. Increases were steepest on the Eastside, where houses and condominium prices jumped 25 percent compared with June sales last year.

Homes with prices over $1 million were still receiving multiple offers, as in past months, real estate agents said.

Creasey and McCoy, both agents for Lake & Co. Real Estate, are among those taking advantage of the robust housing market to try out downtown living.

Although Creasey, 53, and McCoy, 51, have showed and sold many condominiums as part of their work, actually moving from a four-bedroom house into a two-bedroom condo was daunting.

Squeezing into the cozy condo on Denny Way, between First and Second avenues, meant getting rid of about a quarter of their accumulated furniture and collections and putting much of the rest in a rented storage unit.

The condominium includes garage parking for one vehicle, but McCoy had to lease a parking space nearby for their second car. The condo has plenty of windows, but no air conditioning. During a recent stretch of hot weather, the wide-open windows let in fresh air, but also traffic and street noise that kept Creasey awake some nights.

She also could hear the crashing, clanging and hollering of kids who use the alley behind her condo for a skateboard park.

“I’m happy to say that when I yell out the window at them, they leave,” she said.

But on the bright side, the community deck at the condominium complex offered the couple a breathtaking view of the Fourth of July fireworks over Elliott Bay this week — and they don’t have to mow or weed it.

If they have time in their busy schedules, they can walk to the theater, the ballet or a neighborhood bakery.

“Both the house and garden now seem like a huge extravagance,” Creasey said. “It was a big investment of time and money. I enjoyed it — and it was a burden.”

According to the multiple listing service numbers, 988 condominium sales closed in June 2005, and 987 closed this year. The median price jumped from $214,000 to $250,000 year-over-year.

The climbing condominium prices pushed the couple to make the move downtown a little earlier than they were planning.

“We thought it might be out of reach if we waited too long,” said Creasey. “Condos have been going up in price faster than our house.”

Kari Gran, an agent with Windermere Real Estate who specializes in downtown condominiums, said the spike in prices is caused by a lack of inventory. She expects that to change as some of the thousands of units that are planned start becoming available — as many as 6,500 more in Seattle by 2010, according to some estimates. Nearly 50 condominium projects are currently planned for completion by then, according to a report from Realogics.

Gran said most of the first-time condo buyers she sees now are younger people who want to live in an urban environment.

“They understand that they aren’t getting a big space, a yard or a garage, but they are getting the ability to walk out the door and go do something in the city,” Gran said. “It is more a matter of lifestyle. That is what I have sold to people.”

Less common, Gran said, are people such as Creasey and McCoy who are trading longtime homes in Seattle neighborhoods for downtown living.

“People have accumulated a lot of things and they don’t want to part with all of it,” she said. “It is difficult to move from thousands of square feet to much less than that.”

But Gran said she expects that to change as larger condominiums are built as part of the next wave of construction.

A new, 40-story project at 1521 Second Ave. will offer larger units — more than 1,700 square feet — priced from $700,000 and into the millions. It’s expected to be completed in 2009.

“It’s certainly not affordable housing, but a lot of Seattle homes have gotten to be that expensive,” said Gran.

She suggests that people who are thinking of selling their neighborhood homes and moving downtown in the next few years should start looking around now and planning ahead. She even suggests renting downtown first for a while.

“It’s not your traditional way of living; it is a lifestyle,” she said.

WHAT ABOUT TAXES?

Unless the windfall is especially large, homeowners making a profit on the sale of their home should be able to avoid taxes on their gain, Seattle real estate lawyers Casey Scherer and John O’Donnell said.

The federal capital gains tax — 15 percent for most taxpayers — is calculated on the difference between the purchase price of the home (plus the cost of major renovations or improvements) and the sales price (minus real-estate agent commissions and other selling costs). But for a married couple that has lived in the home for any two of the previous five years, then $500,000 of the gain is tax exempt (the exemption is $250,000 for a single person).

Let’s say a qualifying couple bought a house for $100,000 and spent $50,000 on a kitchen remodel and other improvements. That makes their cost basis $150,000. If they sell the house for $715,000 and pay $65,000 in real-estate commissions and selling costs, their net sales price is $650,000. Their capital gain is the difference between $150,000 and $650,000 — or $500,000, which is exactly covered by the exemption, and they would pay no tax. If they sold the house for more, they would pay tax on the amount of their gain in excess of $500,000.

In case the Internal Revenue Service asks questions, homeowners should save the receipts for improvements they make and also keep the records of the purchase and sale.

Source: Seattlepi.com

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