Market Has Been Active; Where Deals Are Happening

Posted by Toes

Wed Jun 17th, 2009 09:59 AM

(Christine Toes here)

Consistent with the pickup discussed here, I have also seen a huge pickup in my business in the last 4-7 weeks & Noah asked me to share where the deals are actually getting done - as that clearly is the most real time information I can provide to you. To give you a frame of reference, before September 2008, I used to do a consistent 1 - 2 sales per month (and a lot of rentals). Last fall and early spring were pretty abysmal, I did about 4 sales in 6 months. In the last two weeks of May, I had 4 signed contracts. For June, I have 4 signed contracts, 1 contract out that might be signed by early next week, and 1 offer that was just accepted.

Where are these deals happening, who is buying & why are they buying now?

West 100s - just over $2M. (Over ask) An extremely similar apt in the building sold for $3M in June 2008. So this is a 33% drop over last year. This seems pretty consistent with what other brokers are seeing in the higher end market. There was a bidding war, both buyers were all cash. Best deal in the neighborhood, Central Park Views, approx $1,000/sq ft., which was a 2004 price for this building. Pied a terre. Buyers first Manhattan purchase. Legal field. Would say that this was a "value" buyer.

Village straight studio - Approx $315K (Slightly below last ask). Came on market in Feb for approx $350K. Price reduction to $325K when my buyer jumped on it - this is about the least expensive studio you can get in the Village in an elevator building. Apt needs work. Similar apt sold in late 2005 for this price. In 2008 this would probably have sold for about $375K, so this is approx a 15% drop. First time buyer who is currently renting and thought it made more sense for her to buy at these prices and interest rates. Web Designer. Qualifies for first time buyers homeowners credit. Would say this was a "location" buyer.

Gramercy alcove studio - Approx $375K (Slightly below last ask). This is a 2005-2006 price for this building. 2008 prices were approx $420K. This is approx an 11% decrease. First time buyer who has been looking for 9 months for the absolute best deal out there. Architect.

Upper East Side alcove studio, unrenovated. Approx $360K (ask). Bidding war (had offers over ask but buyers not as qualified). Retired couple. Primary residence. "Value" buyer (building has very low maintenance).

Village one bedroom. On market since August. Approx 25% off original ask (determined at close to height of market). First time buyers. $600K-$700K price point, apt has outdoor space. Construction & marketing fields. "Location" buyers.

Approx $400K condo. Brooklyn new development offering 10% off asking prices but no other concessions. First time buyer who saw everything else in Brooklyn and LIC, determined this was best value - not that many condos in this price point that are a good quality/location. There was also only one line of apts w/ the exposure that he liked & this was the only apt in that line in his budget, so he had an incentive to buy earlier than he probably would have liked. Concern about whether they will sell enough units to get a competitive mortgage rate but building's preferred lender is lending at just .25 more than current rate so buyer decided the risk was worth the potential reward. Internet field. Qualifies for first time buyers homeowners credit.

Brooklyn prewar conversion. $500K-$575K price range, 2 bedroom. Small, pre-war building. Prices reduced by 20% from last year. First time buyer. Internet field. Qualifies for first time buyers homeowners credit. Charm/value were most important to this buyer.

Upper West Side prewar conversion. When they were determining original offering prices for this apt, they were going to list at over $3M. Buyers paying approx 35% less for an apt that is being customized to their specs (which developers never used to do). Buyers felt that net costs of purchasing were less than what they would be paying in rent, wanted to build equity + take advantage of low rates. Looked at over 35 apts including every new development & condo conversion on the UWS. Made several very low offers before determining where best "deal" was. These buyers spent months searching for value, quality, charm & location. Finance and health care sectors.

Village one bedroom, $700K-$800K range. Hard to determine where pricing would have been last year, largely non-owner occupied building. Financing is difficult. Very unique product (pre-war, outdoor space). Multiple bids including two cash offers. Internet field.

Murray Hill studio, $400K price range. Last year's comps suggest a 10% price reduction. Even though this wasn't a huge discount to last year's pricing, there were multiple offers. As a lover of pre-war buildings, I think the apt held its value because of the charm factor, which is what attracted my buyers. Pied a terre buyers.

It seems that lots of the "creative types" are getting into the market now. Lots of first time buyers who have been renting and waiting for some type of relief after years of price appreciation. Some of these buyers have been looking for months and painstakingly looking for the "perfect" apartment. Buyers really have been picky & patient, as Noah wrote about a while ago! Others have had lifestyle changes or have rental leases expiring and figure that this is the right time for them to buy.

Naturally, I've got my fingers crossed that this trend continues, but if rates increase further...or stocks turn around...or this crisis proves to have a 2nd wave, well, we may have to deal with some slower pockets again.

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