Archive for Condop

Douglas Elliman released the Fourth Quarter report for Manhattan Residential Co-op and Condo sales market.  The Manhattan Sales Quarterly Survey of Co-op & Condo Sales for 4Q-2014 reported here and summarized below was prepared by Miller Samuel for Douglas Elliman.

Manhattan_Sales_4QTR_2014

“All Manhattan price indicators showed robust gains from the prior year quarter, largely driven by low inventory and higher than average demand.”

 

Manhattan housing prices continued to rise, but the market remained challenged by the lack of inventory. Sales activity was high, but did not equal the record volume achieved last year. New development market share continued to expand with more new offerings coming online in 2015. The current market pace remains brisk with nearly half of all sales resulting in purchase prices that were at or above the asking price. Based on the strong finish for 2014, we are anticipating an active market going into 2015.

Douglas Elliman released the Third Quarter report for Manhattan Residential Co-op and Condo sales market.  The Manhattan Sales Quarterly Survey of Co-op & Condo Sales for 3Q-2014 reported here and summarized below was prepared by Miller Samuel for Douglas Elliman.

 “Manhattan housing prices continued to rise in the third quarter.  Rising inventory remained inadequate to meet the high level of demand”

3QTR Manhattan Sales

  •  The supply and demand imbalance has begun to push housing prices higher. Median sales price rose 4.2% to $908,242 from the same period last year. As a result of the shift towards more 3-bedroom and 4-bedroom sales, the overall average sales price jumped 17.4% to $1,684,729 from the prior year quarter.
  • The monthly absorption rate, the number of months to sell all inventory at the current rate of sales, increased to 5.3 months from the prior year record low of 3.6 months. As a result of limited supply and fast market pace, 49.2% of all transactions were sold at or above list price at time of sale.
  • Despite the third consecutive quarter with a year-over-year rise in listing inventory, supply remains 16.1% below the 14-year third quarter average of 6,957. Listing inventory jumped 27.6% to 5,828 from the prior year quarter, with a much larger increase seen with condos than co-ops.
  • Days on market, the average number of days to sell all apartments that closed during the quarter, expanded by 4 days to 92 days, marking the second fastest marketing time in 15 years.
  • Listing discount, the average percentage difference between the listing price at the time of sale and the sales price fell to 1.1% from 2% in the year ago quarter.

Sep
04

How’s the Market – August 2014

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While Quarterly Sales Reports show closed activity for the previous quarter, monthly Contract Signed reports are the ‘crystal ball’ of closed sales to come. Granted, all contracts signed for any given month may not close in the next month, and some may not close at all but most (over 95%) will become closed sales which will become part of the next Quarterly Sales Report.

In the following charts and graphs you can see how the market stacks up against last month and this month last year.

 

AV&MED_SP_DOM_08-2014 - Copy

DISC_AP_08-2014 - Copy

Sales_Region_08-2014 - Copy

 

May
07

Bigger Loans = More Hoops to Jump Through

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Jumbo loans, for most lending institutions, are defined as mortgages over $625,500, and they come in three sizes: small, medium and large. Face it if you’re buying in New York City and need a mortgage, you’ll likely be seeking one of these jumbo loans.

While several banks offer these Jumbo Loans, the may have different requirements.  For Example

  • EverBank offers a Jumbo Loan up to $1.5M and requires a 20% down payment, and 12 months of cash reserves; a loan from 1.5M to 2.5M requires a 30% down payment and 18 months cash reserves; and over $2.5M requires $35% down and 2 years of cash reserves.
  • Bank of America offers a jumbo loan up to $1M with a 20% down payment; a $2.5M to $5M loan with 30% down; and $5M+ loans require a 35% down payment.
  • Wells Fargo Home Mortgage has several tiers starting at $417,000 to $2M with 20% down payment and 12 months cash reserves.  After that, for every $1M above the $2M requires an extra 5% down and additional cash reserves.

While most lenders build in some flexibility to their loan programs, expect to see credit score requirements of 720 and above and debt-to-income ratios of 40% to 43%.  You might be able to get more favorable terms if you have a strong financial profile.

Some other things to think about:

  • Relationship:  The first place to look is the lender where you do the majority of your business.  If you have a strong relationship with your lender already, they may be more likely to relax their requirements.
  • Identify liquid assets:  Some lenders will accept assets such as stocks that can be liquidated easily if the borrower does not have sufficient cash reserves to meet the tier requirements.
  • Shop sooner rather than later:  The new Consumer Financial Protection Bureau rules go into effect in early 2014.  These protections will tighten standards for verification of borrower income or assets and make interest-only loans difficult or impossible for many borrowers to obtain.

Based on Wall Street Journal article by Anya Martin

 Q:  I am considering purchasing a condominium unit in a small building, but the condominium board does not have an accountant prepare audited financial statements.  Is there a requirement that condominium and co-op boards have accountants prepare audited financial statements?

 A:  No, there is no requirement that boards have accountants prepare audited financial statements.  However, audited financial statements prepared by an accountant provide assurance that the financial statements fairly reflect the building’s financial position.  Consequently, an audited financial statement will provide a prospective purchaser with confidence that they have an accurate picture of a building’s financial condition.  Purchasers considering a condominium or co-op that does not have audited financials should proceed with caution when conducting their due diligence.

 Important Tip:  As mentioned in a past Legal Line Question of the Week, audited financial statements for a condominium or co-op are one of the due diligence items that your real estate broker should request from the seller or managing agent as soon as possible in order to expedite the transaction.

 Based on REBNY article by Neil B. Garfinkel, REBY Residential Counsel Partner-in-charge of real estate and banking practices at Abrams Garfinkel Margolis Bergson, LLP   

This post is provided as informational proposes only and should not be construed as legal, accounting or tax advice by the RealEstateGeezer. You should seek advice from a qualified professional

This week, we released our Third Quarter report for the Manhattan Residential Sales  Market.  Manhattan Residential Rentals Market Overview Q3 2012 reported here and summarized below was prepared by Miller Samuel for Prudential Douglas Elliman.

“Manhattan price and sales levels showed seasonal stability, despite listing inventory falling to a seven-and-a-half-year low.”

  • All price indicators posted modest year-over-year declines as 1-bedroom apartments jumped 5% in market share over the past year, reaching 37.8% of all sales. The median sales price was $890,000, down 2.3% from $911,333 in the prior year quarter. Year-to-date median sales price was unchanged from the same period a year ago at $850,000.
  • There were 2,952 sales in the quarter, the second highest total since the credit crunch began four years ago, second only to the prior year quarter total of 3,106 sales. While there was a 5% decline in third quarter sales from the same period a year ago, signed contracts increased 4.9% over the same period.
  • Listing inventory continued to decline, dropping 24.3% to 5,847 at the end of the third quarter, its lowest level since the first quarter of 2005. Despite the drop in supply, only 8.5% of all sales sold for more than their list price at the time of contract, down from 10.1% in the prior year quarter.
  • Days on market—the number of days from the last price change if any to the contract date—jumped from 119 days in the prior year quarter to 190, reflecting the increased sales of much older inventory.
  • Listing discount—the percent difference between the list price at time of sale to the sales price—increased from 4.4% in the prior year quarter to 7.2%.

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Jul
31

In the News – August 5, 2012

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07/26/12:  Prudential Douglas Elliman Releases Exclusive 2nd Quarter 2012 Elliman Report for the Long Island Market.  The spring housing market in Long Island was brisk this year with an increase over last year’s sales even though we had unusually strong sales in the previous quarter caused by the warm winter.  Housing prices remained stable and inventory fell to a seven year second quarter low.  Record low mortgage rates continue to drive demand in this slow-to-improve economy and we anticipate more of the same conditions in the coming quarters.    Download the full report at Elliman.com  

07/29/12:  Big Ticket: Sold $27,376,940.03 An urban version of the traditional rambling family compound, a seven-bedroom, nine-and-a-half-bath apartment that occupies all 8,360 square feet of the 16th floor at 995 Fifth Avenue, a condop building formerly known as the Stanhope Hotel, was the biggest sale of the week, according to city records.  See the full article in the New York Times    

07/30/12  Country’s most expensive apartment lists for $100M:  The most-expensive apartment in the country — a triplex, wrap-around penthouse on W. 56th Street — can now be yours for just $100 million.  Read the full article in the New York Daily News

Today, we released our Second Quarter report for the Manhattan Residenital Co-op  & Condo Sales Market.  Manhattan Residential Co-op & Condo Sales Market Overview Q2 2012 reported here and summarized below was prepared by Miller Samuel for Prudential Douglas Elliman.

“Although Manhattan prices and sales remained stable, the decline in supply continued to present a growing challenge to the housing market.”

  • While price indicators showed modest declines from prior year levels, they were largely the result of a 6.7% jump in entry-level sales and a 3.6% increase in sales below $500,000. Median sales price declined 2.5% to $829,000 from $850,000 in the prior year quarter.
  • There were 2,647 sales in the second quarter, 8.1% higher than the 2,448 sale quarterly average over the past five years. The number of sales was essentially unchanged from the prior year levels, but there was significant disparity between co-op and condo results. Co-op sales increased 10.9% and condos declined 11.8% over the prior year quarter results.
  • Listing inventory fell 13.5% over the same period with new development inventory falling at a 20% pace, faster than 11.8% seen for re-sales. As a result, the monthly absorption rate fell to 7.9 months, the fastest market pace in more than 4 years.
  • Days on market—the number of days from the last price change, if any, to the contract  date—increased to 165 days from 136 days as falling supply helped sell off older inventory.
  • Listing discount—the percent difference between the list price at time of sale to the sales price—increased to 5.1% from 3.5% in the same quarter last year.

 

Jul
02

Beginner’s Guide to Doormen

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You’re living in a building with a doorman, something you’ve never done before.    It may be a little intimidating, after all, you see them every day, and they know who you hang out with, where you shop online and your favorite takeout.  A doorman can be a great asset to a building.  Most doormen are extroverts; they like being in contact with people.

Here are a few tips to smooth the nerves:

  • Introduce yourself with a nice smile. 
  • Doormen are a great resource for who on the building staff does what. 
  • Be polite, the Doorman is there to help you.
  • Know the limits.  The Doorman may be able to help you hail a taxi or carry your bags from the curb to the elevator, but they probably won’t be able to fix a leaking faucet or vacuum for you, but he will offer the name of the person who does those things for the building.
  • When you request assistance, frame it as a question “could you direct me…” rather than a demand.  As grandma used to say “You catch more flies with Honey”.

A doorman is generally part of the building’s security.  Knowing who belongs – and who doesn’t – is part of his job.  Don’t be offended if a new doorman introduces himself and asks you to state your business in the building.   Just smile, tell him who you are and your apartment number and you’ll be fine.

 

From New York Times article.

May
16

Purchaser’s and Sellers Closing Costs Guide

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Closing Costs Guide-Created by Jerry Feeny

Real estate closing costs can be confusing. These PDFs created by Jerry Feeny,  a well known and respected New York Metro real estate attorney, cover closing costs (coops, condos, townhouses-and other real property)  for buyers and sellers in New York City , The Hamptons and Westchester & Rockland Counties.

We hope you find this guide helpful in ‘demystifying’ the age-old question of buyers, ‘what are my closing costs?’ And from sellers, ‘what costs do I have to pay at closing and what is left over from the sale price?

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Today, we released our First Quarter report for the Manhattan Residenital Co-op  & Condo Sales Market.  Manhattan Residential Co-op & Condo Sales Market Overview Q1 2012 reported here and summarized below was prepared by Miller Samuel for Prudential Douglas Elliman.

“Employment conditions have continued to slowly improve, inventory levels have remained modest, and new development stabilized, but tight mortgage underwriting conditions remain a challenge to the market.”

  • Median sales price was $775,000, 0.9% below $782,071 in the prior year quarter. Price per square foot increased 6%, and average sales price increased 0.8% over the same period.
  • The S&P’s downgrade of US debt, paired with the European debt crisis, Wall Street bonus concerns, and large swings in the stock market indices all contributed to the market’s slowed pace leading into the first quarter. As a result, the number of sales slipped 3.5% to 2,311 from 2,394 in the prior year quarter.
  • Active listing inventory slipped 0.6% to 7,560 in the first quarter from 7,605 in the prior year quarter, but remained consistent with the 7,478 quarterly average over the past ten years.
  • Days on market—the number of days between the last price change, if any, and the contract date—saw a 25-day increase to 152 days from 127 days as older inventory was sold off.
  • Listing discount—the percent difference between the list price at time of sale to the sales price—increased to 6.3% from 4.5% in the same period last year.

Mar
20

New York City Real Property Market Value 2012

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According to the New York City Department of Finance, the market value of real property is $845.4 billion, an increase of 3.8 percent compared to last year.

Manhattan rental apartment buildings’ market value increased 15 percent, cooperative apartment buildings increased 9.5 percent and condominium units 7.1 percent compared to a year ago.

In Brooklyn, rental apartment buildings increased 3.9 percent, cooperative apartment buildings 1.6 percent and condominium units 1.2 percent compared to 2011.

Compared to the peak of the market in 2007, the market value of Manhattan rental apartment and cooperative apartment buildings has increased 22.5 percent, and condominium units increased 48.2 percent according to the City of New York.

In Brooklyn, the market value of rental buildings was up 3.5 percent, cooperative apartments 18.4 percent.
These market value increases have resulted in a 40 percent increase in real property taxes since the peak of the market in 2008.

From MIke Slattery, Senior Vice President, REBNY Research Department

This week, we released our Fourth Quarter report for the Manhattan Residenital Rental Market.  Manhattan Residential Rentals Market Overview Q4 2011 reported here and summarized below was prepared by Miller Samuel for Prudential Douglas Elliman.

“Tight mortgage credit conditions continued to drive rental prices and activity higher.”

  • The median net effective rent (face rent less landlord concessions) jumped 9.5% from $2,950 to $3,121 in the same period last year. The year-over-year-gains were consistent across all rental price indicators.
  • The 2-bedroom and 3-bedroom markets outpaced their smaller counterparts,increasing 14% and 18.1% respectively over the same period.
  • New rental activity (excluding lease renewals) was up 10% from 7,217 to 7,942 in the same quarter last year.
  • About 7.4% of new leases had some form of landlord concession compared to the 40.5% in the prior year quarter. For those leases with concessions, the average amount was the equivalent of 1.2 months of free rent.
  • Days on market—the number of days from original list date to lease signing—was at its second fastest pace of 37 days in 15 years, which is when we began tracking this metric.

Our Q4 Manhattan Market Overview was released today and summarized below was prepared by Miller Samuel for Prudential Douglas Elliman.

“After a year of mixed economic news, the Manhattan housing market, while continuing to experience overall price stability, closed out the year with a slower pace of sales.”

  •  Median sales price was $855,000, a modest 1.2% increase from $845,000 in the prior year quarter. Price per square foot increased 5.6% to $1,117 from $1,058 over the same period.
  • There were 2,011 sales in the fourth quarter, 12.4% less than 2,295 in the prior year quarter. The fourth quarter had the lowest number of sales since the same period six years ago, perhaps related to the unusual surge in sales in the prior quarter. Pending sales were also below the prior year level.
  • There were 7,221 active listings at the end of the fourth quarter, essentially unchanged from the same period last year, but 2.6% less than the ten-year quarterly average of 7,412.
  • Days on market—the number of days from the last price change if any to the contract date—saw a modest 5 day increase to 130 days from 125 days, still consistent with the 132 day average for the prior decade.
  • Listing discount—the percent difference between the list price at time of sale to the sales price—fell to 4.9% from 8% in the same period last year.

Nov
20

Co-op Maintenance Fees Are On The Rise

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Making up 75% of all housing stock in New York, Co-ops are the most common type of housing excluding rentals.  The average co-op maintenance fee in New York City climbed 19% from 2009 to 2010 to $1.76 per square foot per month, according to Miller Samuel, a Manhattan-based appraisal company that tracks maintenance costs.

Maintenance fees  usually cover debt service for the underlying mortgage, property taxes, maintenance, personnel and other items.  These fees are usually apportioned per share of stock in the corporation, and are in addition to the owner’s individual mortage (if any).  A review of a co-op’s financial documents will give you the breakdown on the expenses.

What’s behind this increase?

  • Property Taxes:  New York City Property Tax revenue increased 9.68% in 2009 according to the NYC Department of Finance.
  • Utility costs:  Natural Gas and heating oil costs continue to increase. Water costs are up slightly.
  • Building Staff. Salary and benefits, usually renegotiated under union contracts every two to 3 years. 
  • Insurance Costs:  Varies by building and location, usually covering liability and disaster damages
  • Building upkeep, including major repairs to plumbing, electrical, heating and the roof.

What can the Board do?

  • Cancel or delay discretionary projects
  • Request several estimates for upcoming projects.
  • Refinance underlying mortgages.
  • Impliment a flip tax.

When faced with rising costs, there is little a co-op board can do but pass the costs throught to the shareholders as either increased maintenance fees or temporary (or permenant) assessments.  The decision to raise maintenance fees ultimately rests with the co-op boards.

Inspired by Smart Money article by Annamaria Androitis.

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