A Broker's Search... Where to Buy (Part II)

Did you factor in the lost opportunity of yor 20% downpayment? Also, depending on how much cushion you have, you may not survive a down-turn with that kind of unit in the financial district.

Also, I think the pool of byers willing to pay 3,500 a month is not going to grow much more. That rental cost is already in the 'upper' ranges of tolerable before giving serious consideration about buying instead of renting.

I personally cannot live in a place for more than 1 year without light/views.

For some perspective, I'm living in a 5th floor walkup 1br in midtown east, 550 sqft with glorious light and views and pay 2,000. I would buy before I had to pay > 3,000 to rent a 1br with no light/views.

Great point UWSider, ESPECIALLY in this new world of higher interest rates where you can prob get a risk free 5.4% in a online savings account and STILL have access to funds whenever you want.

Also, how will rentals get affected by rates rising if sales prices in Manhattan do NOT correct with restricting affordability? More people will be forced to rent giving landlords a brief 'good time' until sales market 'wakes up' to reality. Im very curious to see how this higher int rate world affects this city with so much $$$ flying around.

I would guess higher interest rates have ZERO affect on high end properties, 3 BR units.

But for studio's and 1br, I don't see how these cannot be negatively affected as theses are purchased by the average joe, not a hedge fund manager or an IB.

The other question I have is, in the studio - 1br range (400k-700k), what range of salaries do u see? I guess you could easily work out the ~effect with this knowledge (eg. if its 300-400k range, then 1 % mortgage increase could be swallowed, but if 150k-220k range then absolutely not)

agreed. For that price range, I would think most salaries are lower, and in the 125K-200K range..especially for new dev condos with no board approvals process.

People expect a lot more than they can usually afford and even when they just starting making good money, they don't take into account future earnings/job stability when making their buy decisions.

Just what I see from past 3-4 years of real estate experience with buyers.

Can anyone tell me how I can find out about new pre-construction condos? I would like to take advantage of the initial offering discounts. Also, Toes, how many condo units do you plan to review in your search and how often do you plan to post them? I find your insights extremely helpful. Thanks again!

Other than Bed-Sty, where are some other neighborhoods have you considered for a townhouse/brownstone if your budget is between 1-1.5mil?

As a resident of a New Development Brooklyn Condo I am looking for a lawyer to represent the Unit Owners in a potential lawsuit against the Sponsor/Seller. Can anyone recommend a lawyer? Please write to: jalmarjalla@gmail.com.

Thank you in advance.

Didn't you make the point that views and light are the Number 1 factor for value retention? As a renter in a luxury building (UES, $2900, 675 sq ft) I certainly value my excellent views and light. Also consider what amenities come with the building - we really value our building's pool, gym, garden, doorman.

Sydney & Others - PLEASE PLEASE PLEASE understand that I, Noah Rosenblatt, post as urbandigs.

Christine Toes posts as Toes. We offer different content from different perspectives. Please do not confuse what I write and what Christine writes and note WHO IT IS that wrote the post you are reading.

Yes, LIGHT & VIEWS are permanent features that buyers pay top dollar for and help a seller retain their investment potential. However, Christine Toes may have a different opinion due to a different situation for her unique circumstances.

Thanks

At $800 to $900 a square foot why aren't you looking at condos in brooklyn such as the old wiliamsburg bank building? amazing views, good building amenities, and they have had a price chop.

http://corcoran.com/property/listing.aspx?Region=NYC&ListingID=974609&ohDat=6/24/2007%2012:00:00%20AM;

841 sq ft for $699k
I think as a long term bet they are unbeatable. Ok right now around them looks like a lot of construction and then there is atlantic yards but eventually it'll settle down. You're also right over a huge subway hub and a very short walk from all the slope or ft greene has to offer.

Question on the tax benefits for an investment property. Doesn't the tax code explicitly state that you can't take deductions on mortgage interests and real estate taxes unless you live in the apartment at least 2 weeks out of the year? How do you plan on 'circumventing' this restriction?

Wow! Lots of comments! I agree with you about the light and views - I personally could not live there. But you would be amazed at how many people care more about space/price than light and views. There are a lot of people working in the financial district that spend every waking moment at the office, so they don't really care about light as long as they have a roof deck to escape to on the weekends.

There is also a shortage of convertible 2 bedrooms in the $3,000 - $3,500 range in Manhattan in general. Many landlords have stopped allowing them. Since I would allow my one bedroom condo to be converted to a two bedroom, there are many recent grads who would like to live in a brand new apartment in a brand new building with a free fitness center, roof deck, lounge with wi-fi, etc. etc. There just aren't that many rental buildings that allow shares with pressurized walls.
With so many new grads making $65-$70K + bonus, they will pay $3200-$3500 for a luxury doorman building.

As far as interest rates, I think the verdict is still out on how much it will impact the first time buyer in NYC. I work with a LOT of first time buyers and you would be amazed at the amount of parental support people are getting. I rarely have first time buyers who pay for the entire apartment themselves. There is so much co-purchasing and gifting going on and a lot of parents don't really care about an extra $100 a month on a 30 year fixed rate mortgage for a studio.

Have to go show an apartment, more to follow! Thanks for the great comments!

I looked at 90 William about a month ago. I loved the loft space and the prices were great as well as the amenities, design, etc. The deal breaker was the view (or lack of) and lack of light. Couldn't do it. Same applies to our rental. Right now we have a great South facing three window apartment in the Financial District. But the building is jacking up the rent 35%! and so we're looking for something new and even as renters, light is a deal breaker for us. I'm sure some renters won't care, but just dropping a vote for the side that does.

There was only one time I rented a unit without light.. damn was I depressed for that entire year!

Either the nit must have a significant discount to rent or I'm in backed into a corner such that I HAVE to rent due to time constraints..

Basically, I wold never ever rent a unit without light ever again, I probably would sacrifice location over it as its not worth the quality of life decline..

I live in Tribeca, and walk to work most non-rainy . My office is on Wall St. / William, so I 've passed 90 William often. I made it point to walk by there at different times of the day to see how much light it received in the morn, noon, and late-day. ..and you are right...the bldg suffers from the 'canyon-effect.' (ie. no light). As for renters, i think its a tough call ...some people prefer light, some prefer size. ..depends on the invidividual.

Do you find that you are able to negotiate price much for any of these new developments that are out there or is it basically fixed to the asking price? What about negotiating features/upgrades?

One reader asked where to find info on new developments and unfortunately, I haven't found one website where I can find all the information I need. Often, all you can find is the building's website and maybe one article where the developers and marketers sent a press release to their publicist. I would like to make UrbanDigs.com one of the foremost places for readers to come for new development info!

Another question was negotiating prices in new developments. Prices in new developments are generally not very negotiable. Negotiability depends on the building and how well the apartments are selling. If the price is right and the apts are selling quickly, the developer isn't going to negotiate with you. Out of the new developments I have helped buyers purchase in recently, there hasn't been much negotiability (Maybe something for $1M being reduced to $985K). It is often easier to negotiate the sponsor's transfer taxes (about 1.8% of the purchase price for properties over $500K) because that concession doesn't show up in the books, so it makes it look like the developer got the full sales price. Depending on the price of the apartment, if the building has storage units for sale, you may be able to get a free storage unit thrown in.

I actually disagree with alot of the preceptions/predjudices mentioned regarding views/this property. 90 william at $800 a square foot is a steal especially if you consider the comps. Just 2 blocks north Amy Sacco is designing the district http://www.districtny.com/ which is going for nothing less than $1100 a square foot. You will not get any more light in that building then you would get in 90 william and on top of that the district building is directly above a ton of subways. When I looked at the district I could hear them on the top floor.

Additional comps if you were to try to look for any in this area will not come lower than $900 a square foot, and if you have a "view" those wouldnt go for anything less than $1000. (45 Broad, 88 Greenwich, 75 Wall all going for way over $1000 sq ft). It would be arguable that these buildings provide a few more amenities but 90 William satisfies 99.9% of the needs a typical New Yorker would expect/require without going over the top with chandelier lap pools, or cabanas etc.

As far as light/view is concerned think of the demographic that you are renting this out to. I disagree that you are going to have to provide a substantial discount to renters because there is no view. This type of building isnt going to attract an executive who wants to impress their clients or entertain them, nor is this a place for a high roller flashy type. This type of rental will really be geared for the 30 or younger professional more than likely the right out of college kid who is just happy to have a new unit in the city because he is sick of taking the path train at 2 am on the weekends. That market is usually a tight range anyway and there isnt going to be a huge swing in prices.

Remember why you are buying in the financial district, yes views would be nice, but with a limited budget it really doesnt make sense to be so picky about that as much as location (being as close to wall street as possible) since wall street which already has Hermes, Tiffany's and Thomas Pink will be the anchor street for property appreciation down there. There will be plenty more shops and restaurants opening up and Wall street is where it will spread from.

In my opinon if you are going to buy in the financial district 80% of the units are going to not have as much light as their coutner part properties in Midtown but look at the positive side you dont have 4 lane avenues with the exhaust coming into your windows or the noise pollution. As much as we all would love to have the perfect place, for less than a million dollars does that really happen anymore in Manhattan?

I completely disagree with your statement regarding DistrictNY (Amy Sacco's new building), it's complete bull. The building is stunning, the apartments inside-even more beautiful. The building is luxurious in ever sense of the word, and if you are talking investment--District is a great place to start. Over 90% of the building is already SOLD, and people are expecting to be able to sell the units for $300-$500 dollars more per square foot than the purchase price, so if I were you..I'd rethink it.

Proud Owner of a unit in DistrictNY

What do people think of 88 Greenwich today? Are prices holding? No washer/dryer in units. Any negotiation?