This market is less active than the 5-room co-ops. Currently there are 15 contracts signed with an average of 104 days on market which means there is 1 in contract to almost 3 active listings and average price is down from last year by 10%. There are more sales happening but at lower prices. It is a good time to buy in this category!Read More »
Prewar apartments have long been prized for the quality construction and charming details that are absent in most postwar buildings. Along with plaster walls, hardwood floors, elegant details, and gracious layouts, prewar buildings are associated with impressive lobbies, desirable locations, and landmark status. The finite quantity of these buildings has only made them more desirable in the minds of some buyers.
But times and tastes change. Once developers began to offer amenities reflecting lifestyle trends such as gyms, party rooms, roof decks and garages, these amenities proved so popular that they are the new norm. In response to demand for these popular amenities, many prewar coops have created gyms and roof decks of their own for residents, yet also to enhance the value of their buildings. But keeping up with the marketing muscle behind new development projects isn’t so easy. Condo developers continually raise the bar by offering an even broader and more refined choice of up-scale amenities to attract buyers – especially to slightly out of the way locations. This helps set their buildings apart from others on the market, and can also be used to justify higher prices. Since buyers already expect gyms and roof gardens, many developers now offer a multitude of newer features such as wellness and spa facilities, media rooms, wine cellars, pet spas, basketball courts, bowling alleys, rock climbing walls, and golf simulators to name a few.
Some boutique condos have a smaller selection of facilities, but offer amenities with a more personal touch, such as shopping perks at certain high-end stores, educator-designed children’s playrooms, and art curators for the buildings’ public spaces. For super lux developments, the newest wrinkle in marketing to high-end buyers is to offer concierge services on par with five-star hotel living. With a quick call to the downstairs desk residents can order up a birthday party, last-minute anniversary gift, or walk around the block for Fido.
What does this mean for prewar coops?
It means that for some buyers, prewar buildings are no longer as attractive a lifestyle choice. And as a result prices are not increasing but are at best stable. Along with new condo developments’ buyer-friendly and more flexible purchasing options, their large menu of amenities has helped shift attention and sales to the newer buildings and the mid- and downtown neighborhoods where so many of these developments are located. The prime “Parkside” environs of the Upper East and West Sides and their prewar cooperative buildings will always have appeal but now have to compete for attention from the many buyers now drawn to amenity-rich buildings in formerly non-traditional areas of the city.
All the best–
Earlier this month, Brick Underground posted an article “Why I’ll Never Buy an NYC Co-op Again” that narrated the woes of one individual’s experience living in a co-op apartment. There are over 7,000 co-op buildings in New York City and it’s unfortunate that the writer’s negative experience brushes over all of these great residential opportunities. Given that the article now has hundreds of shares on Facebook, I find it necessary to remind real estate readers why co-ops are one of the most financially beneficial investments for Manhattan living.
- Co-ops are an Excellent Value: Overall, co-op apartments offer more space for less money. The price per square footage for co-ops can be between 10-50% less compared to condo apartments. This is a huge price difference: a 1-bedroom condo on the Upper West Side could cost $1.2-1.6M, while a 2-bedroom co-op in an equally nice – if not nicer – co-op building in the same location could be similarly priced, perhaps even lower.
- Knowing your Neighbors: The Brick Underground article states that the writer isn’t concerned about the finances or personal lives of the neighbors, but buyers of co-op buildings like to have the comfort knowing that their neighbors are vetted financially and personally, and will make good and responsible fellow residents.
- Issues can Arise. In a condo, a buyer can spend $6M for a home and unknowingly become saddled with neighbors who a) are not friendly or respectful, b) frequently host rowdy parties (although there are rules in condos as well), or c) may be more apt to lending out their apartments to friends. These potential inconveniences may make a buyer’s purchase a regrettable investment and uncomfortable home. Because co-op board reviews and interviews are necessary to become a resident shareholder of the building, owners in the building have a great deal of confidence that their neighbors are good, friendly people who are personally and financially responsible.
- Overall Living Experience: When a buyer invests their hard-earned money into a home in Manhattan, a co-op building offers security for a comfortable living community. The exclusivity of co-op buildings and the preparation involved for a co-op board interview may be too much for some people to handle, but they are necessary for co-op shareholders to vet tenants that will maintain a comfortable lifestyle for their neighbors and offers protection for an owner’s investment in their home.
Co-ops may not be for everyone, but they are a wonderful opportunity for people who want to buy a home in Manhattan and know that they are paying for a spacious residence at a great price, in a well-run building with good neighbors as well.
If you have any other questions regarding co-ops, the co-op board application process, or to find out more about my co-op listings, please contact me at email@example.com or call 646-665-4961.
All the best–
In anticipation of the Spring 2016 market we analyzed the first half of 2015 across all submarkets. The Spring market is historically the strongest season of the year for residential real estate sales in Manhattan.
Since the recession in 2008, the co-op market has struggled in certain price areas, but due to several factors it has picked up a bit over the past two years. With the influx of new development and rising prices in the condo market, co-ops have offered a better value and as a result, prices have slowly increased. Also, co-op inventory fell to a historic low over the past several years and demand increased, partly due to buyers turning to co-ops after being priced out of the condo market.
This year, however, co-op inventory was up 7% in Q2 2015 from Q2 2014. Although a moderate increase, it was the first year-over-year inventory gain for co-ops since 2011. Co-ops still dominate the market share compared to condos, and even with new developments there was a shortage of inventory compared to the demand. For example, 4,617 of the 8,011 sales in the first half of the year were co-ops. While the co-op market closely reflected market-wide trends in the first half of the year, one statistic stands out: the average time to sell a unit fell by 9%, to just 94 days for the overall co-op market.
Although salesprices inched up, and in a few instances there were record co-op sale prices, the increases have not, in any way, matched the increases in the condo market. Co-ops prices were 32% lower than the sale of condos based on median price per square foot in the second quarter. For comparison, the average co-op price in Q2 was $1.319M and the average condo price was $2.045M. The median price for a 2 bedroom co-op was $1.275M, and the median price for a 2 bedroom condo was $1.805M. Properties that were overpriced were hurt significantly in this market. Many sellers (particularly in the market above $3 million) felt that their co-op should sell at the same percentage higher as condos and pressed their agents to set an asking price for their properties at an even higher listing price. Even agents, buoyed by the stronger condo market, felt that the co-op market would follow suit.
In the low and mid-end of the market, sellers were more cautious about pricing and as a result, sales volume and general prices were up. However, in the mid to high-end of the market ($4 million and up), sellers and agents were often overly aggressive with initial asking prices only to suffer for months following the listing’s launch. As a result, in many cases sales prices were well below expectations, and in the mid to high-end were lower than the same time period in 2014.
Upper West Side
Due to the Upper West Side’s continued shortage of inventory, co-ops on the West Side took the shortest time to sell relative to any other segment of the market in Manhattan. Co-op price increases overall were mostly positive year-over-year but significantly less dramatic than condo sales, which are being driven up by high-end and new development sales. The West Side also had the highest resale co-op median price in the second quarter market-wide at $895K. The average price was $1.493M in the first half of the year.
Upper East Side
The co-op market showed some significant growth over last year on the Upper East Side, in terms of the average price, which rose 15-16% over last year. The average price of a co-op in Q2 2014 was $1.641M and in Q2 2015, it was $1.902M. Alternatively, there was no positive growth in average price per square foot. This is important as it reflects a certain malaise in the market. The average median price of a co-op in the second quarter was $875K, which was slightly lower than the West Side median.