Tuesday, January 26, 2016

How one super-smart, super-organized tech entrepreneur bought a co-op.

You don't have to be a Meagan Palatino to buy a co-op in New York, but it helps. Here she offers some excellent information for anyone planning to buy one in the near future.

So I Bought a Co-op in New York, and Here's My Story, by Meagan Palatino

For more on the subject, see 

What to obsess about when you buy a co-op. 

How many of your secrets do you have to tell to get into a co-op? Or condo?

The mortgage contingency: what difference does it make to a seller whether you finance or pay cash?

In defense of the much maligned co-op.  

Essentials of the offer: how to be the perfect buyer 

The one essential for working with a broker as a buyer. And what you're entitled to in return. 

Call me at 917-991-9549, or e-mail cstimpson@stribling.com. I’ll be happy to visit your apartment, loft, or townhouse and give you a detailed broker’s opinion of what it could fetch today, supported with figures and comparable sales. Of course, there’s no cost or obligation involved.

Even if you plan to stay in your home till the next millenium, it’s always good to know what it’s worth.

Monday, January 18, 2016

Does anyone ever really shop for an apartment in January?

Well, yes, as a matter of fact, they do. They may not actually buy in January.  But they do begin to look.

There’s something about the winter holidays that makes people want to change their lives. They decide to get married. They decide to get
divorced. They decide to have another child. They decide to move someplace where it doesn't snow.  

All of these decisions involve real estate.

So if you're planning to sell, January is in fact a good time to hire a broker and put your property on the market.

Those buyers who are out there looking are really serious, or they wouldn’t be braving the winter winds.  And while your apartment may not look as appealing in winter, neither does anybody else’s. 

In fact, if you have a fireplace, it will look a lot better in the winter when there’s a fire in it than in the summer when there isn’t and it’s an empty black hole in the wall. 

Also, potential buyers are in town, not off vacationing with their children, who are in school.  Many are beginning to look with an eye to actually moving in the summertime, when school is out.

You may have less competition, as the conventional wisdom is that spring
is a better time to sell, so a lot of sellers wait till spring.  This also means that your broker is not quite as busy and will have more time to devote to your property.

There are a few disadvantagesbut these are easily dealt with.  For example, second only to location, light is the most important attribute a property can have. So if you're on the market in January, your broker should try to schedule showings towards the middle of a bright day.

Also, you should make sure your home is warm and friendly, because buyers may be cold and cranky. The smell of baking cookies can warm the coldest heart, and the feet attached to it can be warmed by a fire in the fireplace.  

Speaking of feet, don’t forget to tell your broker to ask buyers to take their boots off so you don’t have slush all over your floors.  Put a chair by the front door so they can do it comfortably.

The best part is, you will have the benefit of a longer selling season.  If despite all your broker’s research and expertise your price turns out to be too ambitious, you can drop it and still have plenty of time to sell before things slow down after Memorial Day.

Call me at 917-991-9549, or e-mail cstimpson@stribling.com. I’ll be happy to visit your apartment, loft, or townhouse and give you a detailed broker’s opinion of what it could fetch today, supported with figures and comparable sales. Of course, there’s no cost or obligation involved.

Even if you plan to stay in your home till the next millenium, it’s always good to know what it’s worth.

Thursday, December 10, 2015

The median price of an apartment in Manhattan is $999,000. That will get you a one bedroom.

The New York Times reports that in the third quarter of 2015, the median price for a Manhattan apartment was $999,000 (Manhattan Prices Near Million Dollar Mark).

The median price is a more accurate picture of the market than the average price, which is skewed by those stratospheric sales north of $50,000,000 you keep reading about. 

And what do you get for $999,000 in Manhattan? Most likely a single bedroom. 

A quick search for apartments currently for sale in Manhattan priced between $950,000 and $1,050,000 yielded nine studios (yes, there are million-dollar studios), 84 one-bedrooms, 36 two-bedrooms, and seven apartments with three or more bedrooms.

Yes, I know, not so long ago a million dollars could buy you the moon. And if you're in Columbus or Muncie, it probably still can. But New York is--well, let's just say it's different here.

According to Jonathan Miller of Miller Samuel Inc. Real Estate Appraisers and Consultants (millersamuel.com), there are not enough million dollar apartments to go around. 

If you've got one to sell, it will go in a flash.
Here's Jonathan's absorption report for the month of November, which shows the number of months it will take to sell the currently available properties at each price point.

You may have seen this chart here before, but in case you haven’t, the green columns are co-ops, the blue ones are condos. The total number of months of inventory in each price bracket is at the top of each column. Less than six months is a sellers' market, six to nine months is a balanced market, more than nine months is a buyers' market.

As you can see, with no more than five and a half months of inventory priced under $2,000,000, the lower end of the market is still squarely in the hands of the sellers.

On the other hand, with up to 31 months of inventory, the upper end is still equally squarely in the hands of the buyers. If you've got $10,000,000 or more to spend on an apartment, sellers will greet you with open arms.

Another reliable authority on the subject is Noah Rosenblatt, who publishes Urban Digs (urbandigs.com). 

Noah reports that 49% of sales in Manhattan trade at or above the asking price. 

This is what happens when there's so little inventory at the most popular--that would be the lowest--level. It also indicates that properties that are priced properly are the ones that are selling. 

Buyers are not making offers on properties that are priced too high. And they all read what's on the web about real estate, so they know when a seller is delusional about price.

(For more on this subject, see Pricing 101: Why you have to get it right the first time, and Pricing 102: How to get it right the first time.)

Among other helpful services, Noah also tracks the number of contracts signed every month (Urbandigs Monthly Contract Activity), which is a more current indicator of market activity than the number of closed sales, as there is a lag time of two or three months between contract signing and closing. 

He groups them by the month for the last eight years so you can compare this past November to Novembers in 2014, 2013, 2012, and the five previous Novembers, to eliminate seasonal changes in the market.  

November of 2015 had 861 contracts signed, 9.1% fewer than November of 2014, which was the busiest November in the eight years Noah has been keeping track.  May of 2013 had the most signed contracts ever, with 1,427.

To find out what your apartment is worth in this environment, call me at 917-991-9549, or e-mail cstimpson@stribling.com, and I'll happily come to look at it and put together a broker's opinion of value. No charge or obligation. It's my idea of fun.

If you're thinking of buying an apartment, I'll be glad to help.

Thursday, October 22, 2015

Under $3,000,000, it's still a sellers' market in Manhattan. Above $5,000,000? That's another story.

Bottom line, the market for both condos and co-ops priced under $3,000,000 still belongs to the seller.  Although inventory is beginning to ease upward, there is still a real dearth of property in this category.

For those priced from $3,000,000 to $5,000,000, the market is balanced.  (This is good for everybody. Sellers get a fair price, and buyers don’t get discouraged and drop out of the market.)

I’ve been saying it for more than a year, and it’s still true: now is a great time to sell a mid-range co-op.

Above $5,000,000, the market overwhelmingly favors the buyer. In fact, it’s interesting to speculate on what will happen to the 34 months of condo inventory priced above $10,000,000.  Will the prices come down?  Will the condos turn into rentals? Will they just sit there, gathering dust and waiting for buyers? 

The scary thing is, there are more and more of these super-high ticket properties coming on the market. 

But (whew!) that’s not our problem.

Another interesting thing is that, at every level, there are more condos available than co-ops.  This, despite the fact that at least two thirds of the ownable housing stock in New York is co-ops.

Prepared by Miller Samuel Real Estate
Appraisers and Consultants
The chart above, prepared by Miller Samuel Real Estate Appraisers and Consultants, measures absorption rates, that is, how long it will take to sell the co-ops and condos currently on the market.

The columns represent the different price ranges.  The numbers at the top are the estimated number of months it will take to sell the properties currently available in that range.  Less than six months means a sellers’ market. Six to nine months is a balanced market; more than nine months is a buyers’ market.  Blue columns are condos, green columns are co-ops. 

For more information, including information about absorption in your specific part of town, here’s the link to the Miller Samuel website:  Miller Samuel Absorption Report.

For specific information about the market for your property and a detailed broker’s opinion of its value, with comparable sales and other information, e-mail me at cstimpson@stribling.com, or call me at 917-991-9549.

I’m happy to do this free of charge or obligation.  And even if you never, ever, ever plan to sell your property, it’s always nice to know what it’s worth.

Saturday, June 7, 2014

What makes an apartment worth $20,000,000? Or more?

At the moment, there are more than 100 apartments for sale in New York with price tags at or above $20,000,000. 

Many are in the new midtown buildings that spring up almost daily as builders play their endless game of mine's taller than yours.

Each of these gigantic, thousand-foot-and-more obelisks is surrounded by a cloud of buzz as fluffy as the clouds it pierces.
157 East 57th Street,
architectural rendering
(Daily News, MARCHMADE)

The buzz, which helps jack up the price, typically involves an expensive marketing campaign and a lot of press about its starchitect (it's always a starchitect) along with the Russian oligarchs, the hedge fund managers and the movie stars who are paying stratospheric sums to live in it.  

But if you buy one, besides an address that makes people hate you at the same time they’re angling for invitations to it, what do you actually get for your $20,000,000+?

One57, that is, 157 West 57th Street, is the 90-story (Wikipedia says it's actually only 75, but it's being marketed as 90) condominium that began the transformation of a not particularly exciting stretch of office buildings into what’s now known as Billionaire’s Row.   

Central Park and Canada
It offers a truly spectacular view of all of Central Park at once, through walls that are made entirely of glass.  

To the south, you see the city skyline—all of that, too, along with both rivers.

You get hotel services from the Park Hyatt.  

You get proximity to lots of places to spend the rest of your money, like Bergdorf's and Barney's and David Webb and other shops so expensive and exclusive nobody even knows their names.

Fifth Avenue near 52nd Street
You do not get outdoor space.  You do not get a private entrance; unless you’re in one of the full-floor apartments you will share a hall.   

You do get walk-in closets, marble bathtubs and separate showers in the bathrooms, lighting with dimmer switches, brand name fixtures and hardware, a washer and dryer and an intercom system to reach the concierge.  

You will share, along with  the Russian oligarchs and the hedge fund guys and the movie stars and whoever it was who paid a mere $6,000,000 for the little one-bedroom down on the 39th floor (definitely Not Our Kind, Dear, the poor thing), a fitness center, yoga studio, indoor pool, private dining, catering kitchen, library with billiards table, screening and performance room "and more," the ad says.  You can have a pet, and onsite parking is available.

Onsite parking would be pretty cool.

One of several choices for the first of three courses on the $76 
prix fixe menu at Le Bernardin, an easy walk from Billionaire's Row.
But on the other hand, if you live in a $20,000,000+ apartment, getting the car is probably your driver’s problem, not yours.

For this kind of money downtown, in an older loft building for example, what you get is different.

These buildings generally have too few units to support a doorman, but then those who buy these properties prefer not to have a doorman anyway.  Doormen talk.

Besides, you will in all likelihood get a whole lot more square footage.  In a property of that size, there is room for your own staff person who will, among other things, open the door for you. 

Warburg photo
You have a much better chance of getting outdoor space.  A whole lot of outdoor space.  Sometimes enough for a lap pool, certainly enough for a hot tub, and you won’t have to share either of them with some Russian oligarch or hedge fund manager or movie star you don’t even know. 

You can have your own private screening room.  You can have a private steam room big enough for yourself and five friends.

You will not get hotel service or onsite parking, but there are some very nice hotels and parking garages nearby. 

You will not get a spectacular view of Central Park or the city, but you will have a lovely view of the flowers and trees in your own roof garden.

The screening room in a 
downtown penthouse
For a very good reason, you may well have a painfully unpretentious, small, rather dusty vestibule instead of anything that could be called a lobby. 

This is because people who live in these buildings like to keep it a secret that there are trillions of dollars worth of art upstairs.  A lobby that looks like the building is still a warehouse full of old machine parts is one way to get this effect.

(It's just possible there is some reverse snobbery involved here as well.)

As I said, it’s different. 

So mull it over.  Think about your priorities. 

And let me know as soon as you decide where to spend your $20,000,000.  (Or more.)

Any questions?  E-mail or call me (cstimpson@stribling.com, 917-991-9549) and I’ll either have answers or know where to get them.

Sunday, May 18, 2014

8 in 10 Manhattan home sales all cash? Nope. Not even close.

Recently the Washington Post ran an article that offered some very discouraging information for buyers of Manhattan real estate. (8 in 10 Manhattan home sales are all-cash)

Fortunately, it's far from the truth.

Only 36% of Manhattan co-op sales (co-ops represent 60% of all sales) are all cash, as per Jonathan Miller, president and CEO of Miller Samuel Real Estate Appraisers and Consultants.

A full 64% of Manhattan co-op sales are financed.

The overall figure for all-cash sales in Manhattan is 45%, Miller says.   

This is still a high proportion compared to the way things used to be.  Sometime back before the flood, when I was in real estate school getting my salesperson’s license, our teacher told us that 99% of our deals would involve financing.

No more.

When the market’s tight and there is competition among buyers, the buyer who can pay all cash is the one who gets the property.  And mega-wealthy foreign investors are often looking for a place in the US to park their cash, as it may be safer here than elsewhere. 

This does not, however, mean that financing does not occur frequently.  

Let me repeat: a full 64% of co-op sales are financed. 

So you’re by no means automatically shut out of the game if you must finance. 

Just be sure you talk to a reliable bank or mortgage broker before you start looking for your new home so you have a good idea of what kind of financing you can get.  

And of course, remember that the qualifications of the building you want to buy in also have to be strong.  Not every bank will lend in every building.  There are a number of factors that can make a building unattractive to a bank.

Also, while the strongest offers are indeed all cash and the next strongest involve financing (the less the better) but are not contingent on it, do not ever make an offer that’s not contingent on financing unless you are absolutely sure either that you’re going to get it or that you can close without it.  

A good lawyer can write a rider to a contract that protects you in case the building doesn't measure up or the bank changes its mind at the last minute.  (That's why they get the big bucks.)

Yes, it does occasionally happen that buyers must default because of lack of funding, and no, sellers do not return their 10% deposits when this happens.

But can you still finance a new home?  Yes, of course. Just be careful.

As for the Washington Post?  They should have called Miller before they ran the article.

Any questions?  E-mail or call me, cstimpson@stribling.com, 917-991-9549, and I’ll either know the answers or will get them for you.

Thursday, April 24, 2014

Combining apartments: Need another bedroom or two? How about the ones next door?

As you may have heard (over and over again), there are very, very few apartments for sale in Manhattan.  

Need a bigger apartment?  Too bad.  There aren't any.  So more and more, people are buying the apartment next door and combining it with the one they already have. 

Some may even buy the apartment beyond the one next door as well, or the one on the other side of theirs, or upstairs, or downstairs.  I’ve seen combinations of as many as four units.

This can be a satisfactory arrangement for all concerned.

The people next door may be motivated to sell by the prospect of getting a higher-than-market price for theirs, as they hold all the negotiating chips.  

The buyers pay a premium, but they get the additional space with considerably less hassle than they’d have if they sold their current apartment and bought another larger one, assuming they could even find another larger one.

Plus, there's synergy in a combination.  

Jonathan Miller's Combinations: Creating a Larger Manhattan Co-op or Condo says that the more square feet involved, the higher the price per square foot, or in Miller’s words, “1 + 1 = 2.5.”   So the combination is worth more than its components would be worth separately.

Miller is president of Miller Samuel Inc. Real Estate Appraisers and Consultants, and the universally acknowledged best source of information on  Manhattan real estate.

The value of the smaller apartment in a combination is increased even more if it’s in the back of the building, gets less light, or has other disadvantages.  

Now it’s part of a nice big apartment in the front of the building with plenty of light.  If it’s turned into, say, a master suite, the lack of light may become an advantage. 

Some combinations work more gracefully than others.  Here’s what to watch out for:

If you’re thinking about converting one of the kitchens to a bathroom, check with a plumber well in advance to make sure the waste line in the kitchen will accommodate a toilet. 

If a bathroom is to become a laundry room, remember you’ll have to either vent the dryer or get a dryer that does not require venting.

If you want to move or add plumbing, especially if you’re thinking about converting a closet to a powder room or laundry room, be aware that most buildings do not allow wet rooms over dry rooms.  

The room directly below the closet you’re thinking of converting is also a closet.  Leaks happen.  Nobody likes leaks, especially leaks into closets.  Closets are where people keep things they particularly don’t want to get wet. 

Be aware that your maintenance may be disproportionately high.  As of course you know, maintenance in a co-op (I’m dealing mostly with co-ops as they comprise the lion’s share of ownable residential real estate in New York) is based on the number of shares attached to the apartment in a co-op.  

From the many offering plans I’ve looked at, it appears that an apartment gets a certain base number of shares just for existing as a discrete unit.  Then more shares are added for higher floors, balconies, fireplaces, etc.   

After you combine, you have the base number of shares for two or more apartments instead of just one.  

Thus your new three bedroom apartment may have significantly more shares—and thus significantly higher maintenance—than a three bedroom in the same building that’s not a combination.  

Of course you will play with the floor plans, which should be in your co-op or condo’s offering plan. 

If you’re combining two or, especially, more than two one-bedroom apartments, you may have to do significant reconfiguring in order to have a living room that’s big enough to be in proportion to the size of the new space. 

Make sure the new living room will be facing the street, not a brick wall or an airshaft (a courtyard in real estate language).  

Check for lot line windows in the new apartment (these are windows that legally don’t exist, as they will be lost if another building goes up next door).  

Note that thick black lines in floor plans indicate walls that can’t be removed—either they’re holding up the building or they house plumbing risers or something else too important or difficult to change.

The fewer obvious seams between the apartments, the better.  The combinations that work best, and are most valuable for resale, are those where you can’t tell where the division was originally.  

Be aware that an architect may have better ideas for arranging the space than you will, but be absolutely sure you hire an architect who has combined apartments in the past and is familiar with co-ops.

There are also legal issues to be addressed, such as what to do about the stock certificates, and what impact the combination will have on the building's certificate of occupancy.  

Miller suggests keeping the stock certificates separate, to give the owners and the co-op more flexibility.  

But if you keep them separate,  you may have to re-separate the two apartments, restore a kitchen, put up a wall or two, or whatever, when you ultimately sell.  

Talk about what to do with the stock certificates with your lawyer and of course your co-op board and or managing agent.  

If possible, talk to someone in your building who has already done a combination.

By the way, even if you’ve owned your apartment for many years, you will need co-op board approval to buy a second one in the building.  You will most likely have to go through the same process you did the first time.  For a condo, you will still probably have to get a waiver of the right of first refusal.

Any questions?  E-mail cstimpson@stribling.com or call 917-991-9549.  I'll either answer them or know where to get the answers.