By CHRIS CHURCHILL, Business writer
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First published: Wednesday, January 6, 2010
The city had the Capital Region's highest housing prices last year, with a median single-family home cost of $275,000. That price is more than double the median in
The numbers come from the Greater Capital Association of Realtors Inc., which has long tracked the region's home prices but only recently began releasing data for the 17 Capital Region cities and towns with the most active housing markets.
The numbers illustrate that the Capital Region housing market is really a compilation of many smaller markets, each with different conditions.
That
Realtors have long considered the city the most expensive in the Capital Region, and it's not hard to understand its appeal. The city of 29,000 has major attractions, such as the race course and Saratoga Performing Arts Center. It's close to natural beauty. And it has good schools, low crime and a thriving shopping district.
"Of all the places in the Capital Region, it's the one that has a downtown that's alive and vibrant," said Scott Varley, a Saratoga Springs-based Realtor. "You can walk anywhere in the day or night and there's something going on."
There's an oft-heard adage that a family can afford a home if it's within three times its annual income. And by that measure, relatively few in the Capital Region -- where the 2008 median household income was $58,765 -- can afford to buy in
That's putting a squeeze on some in the
"This is a city that depends on those people being there," said Adam Kirkman, a member of the Saratoga Housing Work Group, which is preparing a report on how to address affordable housing issues in the city. "And those people are having trouble affording housing even close to
Yet Realtors in the city insist the downtown condos, often purchased by downstate buyers seeking a second home, inflate the statistics and make the city seem less affordable than it really is.
They say that careful buyers can still find a moderately priced home in
Indeed, the 2009 median, or mid-point of all homes sold, in Saratoga Springs is actually down by about $9,000 from the 2008 price, reflecting a region-wide slide that's affecting nearly every Capital Region city and town, according to the GCAR statistics..
In some towns, the declines were substantial.
Actually, Halfmoon bested
Chris Churchill can be reached at 454-5442 or cchurchill@timesunion.com. Read his Places & Spaces blog and comment on this story at http://blog.timesunion.com/realestate..
High and low
Municipality 2008 median 2009 median* % change
Troy $147,000 $150,000 + 2%
7 comments:
Broadway rents force out Saratoga Springs shops
Thursday, January 7, 2010
By Tatiana Zarnowski (
Gazette Reporter
SARATOGA SPRINGS — While some local merchants say rents on Broadway are too high, forcing some businesses off of the city’s main commercial street, landlords and real estate agents believe rents are an accurate measure of market rates.Rents on Broadway are more expensive than those on side streets and elsewhere in the city and they have increased over the years, leading some business owners to move their stores off Broadway, said Eugene Bizzarro, owner of Eugenio’s Gelato.“A lot of people’s rents have gone up,” Bizzarro said.Bizzarro’s rent has doubled from its original $2,500 a month in the seven years he’s been on the west side of Broadway.
Bizzarro is moving his business across Broadway into a smaller space because he doesn’t need the entire 1,700 square feet at his old location and because the rent is cheaper at the new 1,100-square-foot location in the former Subway storefront. And he can have an outdoor cafe at that location, which Bizzarro said he is looking forward to.
Cindy Spence said her 6-year-old store, Saratoga Needle Arts, can’t afford to foot the bill for Broadway rent for its operation of selling yarn to knitters and offering classes.
That’s not the main reason she’s closing her store at the end of this month and hoping to find a buyer to take over the business, but Broadway rent hasn’t helped.
“It’s got to move off Broadway, definitely,” Spence said of the store, which is not likely to attract many walk-in customers.
She has paid over $300,000 in rent in the past six years, an average of $31 per square foot a year for her 1,600-square-foot space.
“I could have bought a nice little house for that,” Spence said.
She said her rent has increased 1 percent a year, so it hasn’t risen as dramatically as Bizzarro’s did at the gelato shop. And her landlord gave her a break on rent over the past 10 months, she said.
Supply and demand
Broadway rent of up to $45 per square foot for prime storefront space gives some local business owners sticker shock, said Andrew Brindisi, president of the Downtown Business Association.
“I think in the 10 years I’ve been here, that’s always been kind of the consensus,” Brindisi said.
Part 2
But landlords and real estate agents point out that simple market forces dictate the rent prices on Broadway as well as in the rest of the city.
“Pretty much they’re determined by supply and demand,” said Frank Panza, who owns The Shoe Depot as well as a building at the corner of Broadway and Spring Street that he rents out. “The whole town has done very well for itself.
“Thirty years ago, it was so easy to find space on Broadway and you could pretty much walk into it,” Panza said.
Now it’s much harder to find space and there are few vacancies on Broadway.
Businesses from elsewhere also are looking to relocate here.
Last month alone, Panza and his wife, Jenifer Flynn, fielded several calls from potential commercial tenants from Long Island, New York City, Lake Placid, Connecticut and near the Vermont border — all of whom faced recessionary slumps in their own cities.
“Saratoga has been known to hold its own during tough times,” Panza said. “It’s surprising with the uncertainties that are enveloping everyone, particularly on the commercial side of things, that there would be as much interest as there is.”
Tenants are also competing for space against people like Panza and Flynn’s new tenant at 15 Spring St., the former O’Dwyer’s Pub, who prepaid their rent while they are redoing the interior of the former pub.
“They were very proactive in securing what they felt was going to be a good thing for them,” Panza said. He declined to disclose the new tenant’s name but said the store will sell unique Martha’s Vineyard items.
Panza and Flynn charge about $40 a square foot per year for the Broadway storefronts and $18 per square foot for storefronts on the Spring Street side of their building.
Taking a gamble
Julie Dwyer, commercial real estate agent for Roohan Realty, said those are the going rates for Broadway and off-Broadway storefront space.
She believes rents are starting to correct themselves after rising for several years.
“They’re really starting to level off and become more realistic,” Dwyer said.
“There are obviously going to be the few landlords who are going to be unrealistic or demanding. If you’re charging too much money for rent, you don’t have anybody in there,” she added.
Landlords face their own rising expenses that they’re passing on to tenants: higher real estate prices, property taxes and insurance, for starters.
Even though businesses are clamoring to be on Broadway, many still go out of business or have to move to a cheaper place, Dwyer said.
“That happens quite often because someone has not done their homework. If I’m going to be renting to a new business, it’s very much my practice to say to them, ‘Where is your business plan? Have you talked to an accountant? What are your projections?’ ”
She said only about 9 percent of new businesses start with business plans.
“If you don’t have that, it doesn’t matter what your rent is, you’re not going to make it,” she said.
Adirondack Trust offers an incubation program to new businesses locating in its new Mabee building on Church Street, with cheaper rent and help from a Skidmore College economics professor.
One storefront, recently rented to Pamela Worth, who plans to open a women’s clothing store, was offered for lease at $12 a square foot, a steal compared to other retail spaces around town.
“That gives somebody an opportunity to build up a clientele and not pay Broadway prices,” said Flynn, who applauds the program.
Frank Panza, who owns The Shoe Depot
Isn’t this the clown who was just in the paper for filing bankruptcy? Now he’s a economic Guru. Only in saratoga.
We have affordable housing in Saratoga its called Jefferson Terrace. All you have to do is blow the right people to get in. Start with the building and grounds staff then work your way up. Don’t forget the mouthwash and knee-pads help.
JT
I admire the change of topic, much better.
A wise move by you to depart from the past tenor of this blog.
Good for you.
It's informative.
now i know why their Gelato was 9 bucks a cup.
Saratoga Springs, while smaller than most of the comparative communities, is blessed with multiple amenities and has fewer detracting problems than those that are shared by some others. Yet Broadway rents reflect what the market (the tenant) will bear - not necessarily, a reflection of the owner's costs in operating their leased (presumably code compliant and key ready) white box space.
It is no mystery that ‘percentage of value’ taxes on properties within the commercial districts like those on condos pay less than the City’s tax bill share (and the complimentary school tax bill) that burdens the single-family homeowner. As far as what has been suggested to be seemingly unfair high rental structures, why shouldn't commercial building tenants expect these premium spaces to be code inspected by our enforcement officers if the owner's promote and expect select Broadway values? And isn’t it about time that real estate agents be responsible for promoting those often implied opportunities associated with these properties, if in reality, the possibilities turn out to be nearly impossible or prohibitively costly? Next time RealityRealty suggests that you can do this and that with that property - rental or otherwise ask her/him at what cost and to put it on company letterhead.
Do we dare talk again about the ‘nobody goes there because there is no where to park’ dilemma for these prime rental districts?
As far as affordability, aren't there more housing options in this city than at any time in the last five years? Walk in any neighborhood, and see the signs of all the apartment rental and ownership possibilities. Does a small city (surrounded by other living options) require subsidizing workforce housing? Maybe the low wage-earning providers should subsidize the construction financing of apartment housing (for the needy low wage earner) not single-family condos? We do not live on some vast open prairie regardless of the countryside that is often imagined and it is a fact of life, that many commuters in many cities ride public transportation to get to work for the reason that the city they travel to ain't Harkensville anymore. Existing affordable and resident senior housing options need to be supervised and utilized for their intended purpose. Should the recent state institutionalizing of some of our public residential facilities for other than our working residents or our aged population be reviewed?
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