Archive for Condo

The Elliman 2004-2013 Decade Survey for Manhattan Co-op and Condo Sales was released recently at Elliman.com  and summarized below was prepared by Miller Samuel for Douglas Elliman.

 “The number of sales reached second highest level in 25 years as listing inventory fell to a 14-year low.”

Manhattan Decade Report

  •  After 4 remarkably stable years with activity hovering just over the 10,000 sale threshold, the number of sales jumped 21.2% to 12,735 from the prior year level to the second highest total in 25 years. A record of 13,430 sales was set in 2007.
  • Median sales price edged up 2.4% to $855,000 from the prior year.
  • Average sales price increased 1.9% to $1,443,753 and average price per square foot rose 4.6% to $1,136 respectively year-over-year.
  • Listing inventory fell 12.3% to 4,164, from prior year levels to a 14-year low.
  • Days on market, the number of days from the last price change to the contract date, fell 29.7% to 121 from the prior year.
  • Listing discount, the percentage difference between the list price at time of contract and the sales price, fell to 3% from 5.6% in 2012.

The Elliman 2003-2012 Decade Survey for Manhattan Co-op and Condo Sales was released recently and summarized below was prepared by Miller Samuel for Douglas Elliman.

Despite listing inventory falling to a record low, the number of sales edged higher for the third consecutive year

The Manhattan co-op and condo market finished 2012 with the second highest number of sales in the past decade after the 2007 peak. For the fourth consecutive year, housing prices showed stability but listing inventory fell to a twelve year low, likely placing upward pressure on housing prices in 2013. Record low mortgage rates have brought new buyers into the market despite tight mortgage lending conditions. We remain encouraged about the direction of the market and will continue to keep you informed of the trends.

  • The 2012 total number of sales was 10,508, 3.4% above the year ago total and 19.4% above the 2003 level. The number of sales remained 21.8% below the 2007 housing/credit boom peak.
  • Median sales price was $835,000, 1.8% below the year ago levels. Average sales price and price per square foot followed the same pattern, slipping 0.7% and 0.1% over the same period.
  • There were 4,749 listings available at the end of 2012, 34.2% less than the prior year and 21.9% below the 2003 total. Inventory is at the lowest level in 12 years since we began tracking the metric.
  • The number of days to sell a Manhattan apartment in 2012 was 172, a month and a half days slower than in 2011 as older inventory was absorbed from the chronic shortage of supply.
  • Listing discount, the percentage difference between the list price at time of sale and the sales price, was 5.6% in 2012, up from 4.3% in 2011 and above the 4.5% decade average

 

 Today, we released our Fourth Quarter report for the Manhattan Residential Sales  Market.  Manhattan Residential Rentals Market Overview Q4 2012 reported here and summarized below was prepared by Miller Samuel for Douglas Elliman.

“The Manhattan housing market was characterized by inventory falling to 12 year lows across the re-sale and new development markets.”

  • The number of listings fell 34.2% from prior year levels to a 12-year low of 4,749. As a result, the pace of the market quickened, with the monthly absorption rate falling to 5.5 months, the second fastest rate since 2000.
  • Overall price indicators were mixed. Median sales price slipped 2% to $837,500 and average sales price edged 1.1% higher to $1,461,473 over the year ago period.
  • There were a record 2,598 sales in the fourth quarter as looming changes to federal tax laws and general economic improvement elevated activity in an already improving housing market.
  • Listing discount, the percent difference between the list price at time of sale and the sales price, was 3.7%, down from 4.9% in the same period last year.
  • With the number of active listings falling for several years, days on market, the number of days from the last change in price to contract date, expanded by 47 days to 177 from the prior year quarter. The lack of new supply resulted in the absorption of listing laggards characterized by longer market times.

Dec
04

The Value of Light in a Co-op or Condo

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Light is perhaps the most subjective of the view-floor level-light trio but this is the logic Miller Samuel has used for years (based on the “paired sales” theory that isn’t very practical in an appraiser’s daily life) but it’s a good starting point, and of course it depends on the nuances of each situation

 

Graphic: Jhoanna Robledo –  New York Magazine , Commentary by Jonathan Miller of  The Matrix.

Oct
11

The Differences are narrowing between Condos and Co-ops

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If you’re looking to buy an apartment in New York City, you probably already know there are basic trade-offs between buying a co-op or a condo.  Co-ops usually are stricter in approval and building rules, but they make up a higher percentage of housing and are generally less expensive than condos.  But there’s more to it than that. 

Some neighborhoods have more condos for sale than co-ops.  However, the sometimes stringent application process and financial requirements for co-ops usually mean the buildings are more financially secure.

 Here are some factors to consider:

Inventory

  • There are more co-ops (75%) than condos (25%) in New York City, but the gap is shrinking.
  • Certain neighborhoods with new developments have a higher numbers of condos because most new buildings are sold as condos.
  • Consider your style.  If your heart is set on a pre-war building, likely you’ll have to buy a co-op.

 Price Difference

  • According to Miller Samuel, the overall market statistics seem to show that on average condos cost as much as 40% more than co-ops.
  • A comparison of co-ops and condos with similar amenities and size conducted in 2006, showed the difference to be only about 9% more.  Condos are sometimes larger and they involve different closing costs due to the type of ownership.

 Approval Process

  • Historically only co-ops require very detailed applications with financial statements and tax returns, however, some condos are starting to require similar applications.
  • Condo boards cannot reject potential buyers, but they can pre-empt the sale by offering to buy the apartment on the same terms.  This rarely happens because few condo boards have the finances to make these purchases.
  • Co-ops generally require larger down payments, some as low as 20% of the purchase but many require 25-50% down payments and some don’t allow financing at all.
  • Financial requirements can make buying a co-op difficult for the self-employed and foreign investors.

Rules

  • Some co-ops have very strict rules, imposing restrictions on subletting or use as pied-a-terre.  But even some condos have rules for pets or noise restrictions, the same as co-ops.
  • Renting a co-op usually means getting board approval, if the building allows it at all, and usually only for limited rentals of 1-2 years at the most.  Most condos allow rentals or sub-lets.

 

Inspired by New York Times article.

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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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Jan
23

Maintenance Fees are More than Just Maintenance

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For most buyers in Manhattan, getting past the asking price of a co-op or condo is only the first in a series of seemingly insurmountable obstacles.  The monthly maintenance fee is the second.  From a few hundred dollars a month to a few thousand depending on the various buildings, most owners find the maintenance fee never goes down, and rarely stays constant.   Most are adjusted on an annual basis.

Buyers need to be concerned about the fee as a direct impact on the property value, not just because of the cash going out every month.  The maintenance fee covers operating costs:  Staff Salaries, management fees, heat, water and sewer and other items.  In co-ops, the real estate tax bill and underlying mortgages on the entire building is part of the maintenance fee, and is proportional to the number of shares you own in the co-op corporation.

Condos are different. The common charges still cover the operating costs the same as co-ops, but the property tax bill goes directly to the owner because of the different ownership type.  Condos may have more amenities but lower common charges due to this distinction.

According to the Council of New York Tax Cooperatives and Condominiums, the fees have skyrocketed over the last decade.  For example, the median maintenance fee for co-ops on the West Side of Manhattan rose by 59% between 2000 and 2009, while condo common charges increased by 38% city-wide for the same period.

Increasing Real Estate Taxes are the main reason for the rise in co-op fees.  Both the tax rate and the assessment of property values have increased in recent years.  On the West Side, co-op median real estate taxes increased by 116% between 2000 and 2009.   On the East Side in 2000, 23% of the maintenance paid was attributed to taxes; by 2009, that figure had risen to 33.3%, indicating that taxes were a larger portion of the maintenance fees.

Land Leases are another issue for increased maintenance fees for some co-ops.  As a number of co-ops do not own the land their building sits upon, rather rents the land.  Some of those leases are coming up for renewal soon, and the experts predict there will be a huge jump in cost.

Finding savings to offset the increases is difficult.  Most costs are fixed, including salaries, taxes, insurance, upkeep and utilities.  Several co-ops have hired consultants to check for water leaks, while others are switching to natural gas from oil heat.  Still others are metering each apartment’s utilities separately.

Many co-ops are refinancing their underlying mortgages to take advantage of low interest rates.  Others are generating income by imposing or increasing fees for using the bike room, moving in or out or renting a unit.

Reviewing a building’s financials will give a buyer an understanding of how a building spends its money.  If you disagree with how a building spends the fees, there’s little point in moving there.   See our Series on reviewing building financials starting with  ‘Tis the Season: Many Manhattan Coop Financial Statements Are Released In May.

Inspired by New York Times Article on Jan 15, 2012 by Jim Rendon.

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Jan
13

Getting Started – Homework for Manhattan Condo Buyers

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With an aging housing inventory, new condominiums have quite an appeal in Manhattan.  Luxury amenities like pools and play areas, high end finishes add to the appeal.

New condos have a few drawbacks, however: often higher selling prices and closing costs as well as difficulties in obtaining loans.  New buildings must have offering plans approved by the state attorney general’s office, detailing important points about the building.  This complex document can be intimidating to the lay person. 

Bringing in a good attorney familiar with new construction to review the offering plan early in the process can save a client thousands of dollars by identifying taxes and fees that can be negotiated.

Tax abatement is another point that bears close scrutiny.    While it is a great selling point because it keeps monthly costs lower for a while, an attorney can help determine the time span of the abatement and what the tax bill could be when the abatement expires.

Closing costs are much higher on new construction.  Expect to pay the transfer tax and the seller’s attorney fees in addition to the customary closing costs for established apartments.

Be sure the building has a temporary certificate of occupancy, required before you can close on an apartment in a new building.  Check the Building Department Website

Financing a new condo can be difficult.  Buyers may be approved for a loan, but it is entirely possible the building will not qualify.   Certain FHA and Fannie Mae requirements may preclude the building, such as flood zone or percentage of sold apartments.  Individual banks may have their own additional requirements.  Many new buildings have preferred lenders and mortgage brokers to overcome this hurdle.

Appraisals must match the purchase price.  It is not unusual to have difficulties finding nearby comparables to the new apartment you wish to buy, causing appraisals to come in lower than expected. 

Inspections are recommended for new construction.  Cost cutting measures like lower-quality windows and problem with floors or exterior stucco may affect the quality of your life.  Significant problems can be addressed in the contract.  Smaller issues like paint drips or broken screens should be addressed on a ‘punch list’.

Doing your homework now can save you a lot of aggravation down the road.

 Inspired by New York Times Article by Jim Rendon, published October 30, 2011

 

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Nov
08

Congress Restores FHA Loan Limits to previous levels

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As we reported in May,  the Federal Government backed new mortgage lending limits program expired in September, 2011.  This week, the U.S. House and Senate voted to restore the FHA loan limits to the previous maximum $729,750.  According to the National Association of Realtors, this will help provide stability to communities as credit restrictions continue to prevent some qualified buyers from becoming home owners.

The restoration of the limits only apples to FHA mortgages, not Fannie Mae and Freddie Mac, which also expired at the end of September.  The conforming loan limit for these two secondary mortgage market companies will remain at a maximum of $625,500.

While this may be good news for many markets, in Manhattan, where over 70% of the apartments for sale are Co-ops, it probably won’t make much difference.  Most co-op boards require 20-50% down payments and higher income to debt rations (25-30% maximum debt to income).   Lenders for most condos are asking for at least 20% down payment to qualify for a loan.

Excerpts from Daily Real Estate News, November 18, 2011

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Our Q3 Manhattan Market Overview which was released Tuesday and summarized below was prepared by Miller Samuel for Prudential Douglas Elliman.

  • Housing prices in Manhattan continue to remain stable. The median sales price of a Manhattan apartment was $911,333 in the third quarter, essentially unchanged from $914,000 in the prior year quarter and up 7.2% from $850,000 in the prior quarter.
  • Although year-over-year co-op sales activity was unchanged, the increase in condo activity resulted in a 16.7% year-over-year increase in overall sales activity. An increase in demand from foreign buyers due to the weak US dollar is likely a key factor for the gain.
  • There were 7,726 active listings at the end of the third quarter, 4.9% fewer than 8,123 listings in the same period last year and 4.3% less than 8,070 listings in the prior quarter.
  • Consistent with the decline in inventory, the time to sell an apartment and the discount from list price have also declined. Days on market fell to 119 days from 125 days and the discount from the list price at time of sale slipped to 4.4% from 5.8%, both from the same period last year.

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Jul
08

Week in Review: News You Can Use July 8, 2011

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  • “Despite a banner month for Governor Cuomo, New Yorkers put their Trumpets down when it came to the Economy” Read all about it at Siena Research Institute
  • New York City Tax Commissioner Announces 10% Assessment Cap on Co-ops, Condos. “New York City Finance Commissioner David M. Frankel confronted his critics yesterday at a City Council Hearing in May, announcing he was placing a 10% cap on tax assessment increases for co-op and condo properties in the five Boroughs.” Read about it at Habitat.
  • AGs, Banks near $60B deal on Foreclosures. “America’s biggest mortgage servicers are closing in on a deal with federal and state officials to settle some of the thorniest foreclosure problems.” Read about it in the New York Post.
  • Manhattan rents rise with room to go higher. “The Manhattan apartment rental market has been heating up for months, and second-quarter market reports released today by residential brokerages Citi Habitats and Prudential Douglas Elliman show skyrocketing rents. Now, the question is how long the rent increases will continue.”  Read about it at the Real Deal
  • Homes Dark and Lifeless, Kept by Out-of-Towners “some Manhattan neighborhoods are assuming that vacant feeling the year round, because the people who own or rent apartments there actually live somewhere else most of the time” Read about it in the New York Times

May
17

All Real Estate is Local. Very, Very Local!

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Truth, lies and statistics!

Earlier this month,  Zillow released its Q1 Real Estate Report.  Many in the press joined in and cried gloom and doom.

The hysteria was best summarized by a Curbed article that listed the 10 Most Depressing Things Mentioned in The Zillow Report.  Perhaps real estate prices continue to decrease in Phoenix, Los Vegas, Tampa, etc., but in New York City, especially Manhatan,  it’s just not the case.

You would be misled if you simply looked at the Zillow Home Value Index for New York Metro data and assumed it had anything to do with Manhattan Residential real estate sales.

  MoM QoQ YoY
New York Metro -.5% -1.6% -5.3%

But if you focus on coops and condo sales which account for over 99% of residential properties sold in Manhattan vs single family homes , you’ll see that in New York City there have been significant price increases

  MoM QoQ YoY
New York Coop+Condo +2.3% +7.5% +19.2%

As previously discussed with regard to the Case Shiller report discussed here, the Case Shiller report excludes new developments, condos and coops.  At least the Zillow report has that data available (perhaps not new development) but you have to dig for it.

All real estate is local.  So local, in fact that certain neighborhoods, blocks, buildings and even specific apartments have their own hyper-local real estate data.

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Our Q4 Survey of Manhattan co-op and condo sales which was released today and summarized below was prepared by Miller Samuel for Prudential Douglas Elliman

 

 

 

  

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Jan
12

Q4 2009 Manhattan Residential Sales Market Report

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Q4 Market Report Chart and Graph Recently the industry has reported Q4 sales for the Manhattan residential market. The Manhattan Market Overview reported here and summarized below was prepared by Miller Samuel for Prudential Douglas Elliman.

  • Q4 continues the surge of activity seen in Q3 with 2473  sales up 10.9% from 2230 last quarter and up 8.4% from 2282 prior year quarter.
  • By far, the most activity and shortest Days On Market were seen in the under $1 million category
  • Inventroy Down 18.3% from last quarter and down 24.6% from prior year quarter
  • Average sales price per square foot up 5.5% over last quarter ($1051/sf) but down 11.2% over the prior year quarter ($1183/sf)
  • Median sales price $810 down 4.7% over last quarter and down 10% from  $900 in the prior year quarter.
  • Days on Market up 28.3% from last year quarter
  • Inventory down 24.6% form last year quarter

Reporting and analysis of  the Q4Market Survey were consolidated on the Miller Samuel website and shown below.

01/07/2010  -NuWire Investor- Manhattan Property Prices Plummet In Fourth Quarter

01/07/2010  -Before it’s News- Manhattan Residential Market Slowly Clambering Out of Hole

01/07/2010 -Epoch Times- Manhattan Residential Market Slowly Clambering Out of Hole

01/06/2010 -PropertyWire- Reports reveal the devastating effect of the Wall Street decline on apartment prices in Manhattan

01/05/2010 -Earth Times- 4th Quarter 2009 Manhattan Residential Market Report – Prepared by Miller Samuel

01/05/2010 -PR Newswire- 4th Quarter 2009 Manhattan Residential Market Report – Prepared by Miller Samuel

01/05/2010 – Reuters- Plunging home prices pull Manhattan buyers back in

01/05/2010  -ABCNews.com- Manhattan Home Sales Rise in 4Q, but Prices Vary

01/05/2010 -Bloomberg.com- Manhattan Apartment Prices Fall as New York Loses Finance Jobs

01/05/2010 -TheStreet.com- 4th Quarter 2009 Manhattan Residential Market Report – Prepared By Miller Samuel

01/05/2010 -The Real Deal- Manhattan home sales market on the mend, but is a double-dip ahead?

01/05/2010 -Fox Business- 4th Quarter 2009 Manhattan Residential Market Report – Prepared by Miller Samuel

01/05/2010 -Crain’s New York Business- Manhattan residential market ends year on up note 01/05/2010- New York Magazine- Manhattan Real Estate: Sales Recovering and Inventory Shrinking

01/05/2010 –Business Week-  Manhattan Apartment Prices Fall as New York Loses Finance Jobs

01/05/2010 -1010Wins.com-  Manhattan Home Sales Rise in 4Q, but Prices Vary Website

01/05/2010 -CNNMoney.com- Will bonuses save the day for Manhattan real estate?

01/05/2010 -The New York Times-  Manhattan Home Sales Rise in 4Q, but Prices Vary 01/05/2010 -New York Post- Manhattan housing slide slows

01/05/2010 -Air America Beta-  Manhattan home sales rise in 4Q, but prices vary

01/05/2010 -Inman News-  Manhattan closings up, prices down

01/05/2010 Top News Fall in Prices Recorded by Manhattan Residential Real Estate

01/05/2010 -The Money Times- Manhattan records slide in home prices Website

01/05/2010 -WNYC.com- 2009: A Buyer’s Market For Manhattan Real Estate Website

01/05/2010 -Curbed.com-  State o’ the Market Reports: The Manhattan Bleeding Slows!

01/05/2010 -Daily News- Housing on rebound: Manhattan condo, co-op sales climb at end of last year

01/05/2010  -Scottrade- 4th Quarter 2009 Manhattan Residential Market Report – Prepared by Miller Samuel

01/04/2010  -The New York Times Sales Spur Optimism in Manhattan Real Estate

01/04/2010 The Seattle Times Manhattan home sales rise in 4Q, but prices vary

In addition to the Prudential Douglas Elliman report, some of the articles above mention these other 4Q market reports:

Corcoran, Brown Harris Stevens and Halstead Property

Categories : Market Reports
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Dec
09

Kids + Cribs = Motivated Apartment Sellers

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Let’s face it, this is probably the worst time to sell an apartment in Manhattan. This is very good news if you are a buyer.

Virtually all apartments currently on the market-especially during the holiday season- are placed there by motivated sellers rather than sellers just testing the waters. One of the most powerful motivators for sellers is their kids. Kids here or on the way.  I call it the crib effect.

As a buyer, keep your eyes open for bedrooms, alcoves or even closets with kids’ paraphernalia. Especially cribs. Quietly make note and negotiate accordingly.

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