Co-op Boards Making (Small) Compromises

Co-op boards are starting to become slightly more flexible in light of the market. It looks like 2010 is going to be another challenging year for the real estate industry, and a growing number of brokers urging co-op boards to consider broadening their pool of acceptable buyers—and it appears to be working. Some of the boards are actually starting to bend, and this could help boost co-op sales in 2010.

With sales volume so far down from the peak of the market, sellers often have to waiting for months to find a buyer, only to see that buyer rejected. Boards are starting to believe that to enable shareholders to get the maximum price for their apartments they have to be a little more flexible with regard to the buyers. The current economic climate has made boards more wary of the financial situation of buyers, so in return some brokers have convinced boards to ease up on allowing compromises on pet policies and pied-à-terres.

Boards are, of course, still insisting that potential shareholders have steady jobs and plenty of cash. In addition, they are less likely to accept residents who are self-employed or whose incomes fluctuate from year to year. Even with more willingness to compromise, boards will only make exceptions for extremely well-qualified candidates.

Contact Alfred Real Estate today.

Tenants of Rent-Stabilized Apartments: The Newest Homebuyers?

Rent-stabilized tenants appear to be the newest addition to the ranks of new homebuyers. In New York City, nearly 70 percent of the population rents — about double the rate for the rest of the country. Most New Yorkers don’t take the decision to rent lightly. However, since home prices in New York have dropped as much as 30 percent since the height of the real estate boom, even people who are paying way under market rates for their rentals are venturing into the housing market.

The Times' lead-off anecdote is a retired school teacher who is trading a $725/month East Village studio for a $305,000 studio in a doorman building on the Upper West Side. Even though he and other buyers making the transition from stabilized renting to owning will end up paying more than they do now, most are certain it beats renting at market-rate.

Those who decide to leave rent-stabilized apartment know that they will probably wind up paying more, but they have some very compelling reasons for leaving the security of their rented abodes. Some have the desire to upgrade to a nicer building or a larger space while others give up size for the experience of owning. There are some who make the move because they know that their rents will soon head into market-rate territory anyway. Despite sharing other secondary motives, their main incentive is sales prices that have been heftily discounted and mortgage rates that are hovering enticingly low at around 5 percent.

Market experts say there is a chance that prices may drop slightly over the next quarter, however now is probably as good a time as ever to buy. Even if buyers aren’t getting a rock-bottom price, prices have come down substantially and buyers will get a good, reasonable deal at very low mortgage rates.

Contact Alfred Real Estate today.

Manhattan Real Estate Abbreviations

Most real estate listings use abbreviated terms for features in an apartment. Below are helpful definitions of the most frequently used terms.

4B/2B Four bedrooms and two bathrooms. Bedroom usually means a sleeping area with a window and a closet, but the definition may vary in different places.

Full bathroom Is a room with a toilet, a sink and a bathtub.

Three-quarter bathroom Has a toilet, a sink and a shower.

Half-bathroom or powder room Has only a toilet and a sink.

Balc Balcony

Classic 6 The term ‘classic’ generally refers to a prewar apartment building and the number 6 to the number of rooms. In other words, a classic six is a prewar apartment with six rooms: living room, formal dining room, kitchen, plus two full sized bedrooms, and a smaller third bedroom typically referred to as the maid's room.

Classic 7 A prewar apartment with seven full rooms (one additional full sized bedroom more than a classic six)

Classic 8 A prewar apartment with eight full rooms (two additional full sized bedrooms more than a classic six)

Cookie Cutter A real estate term for a congenial apartment found in most modern buildings.

DCRFPL Decorative fireplace (non functional)

DK Deck

DRMN Doorman

DUP Duplex

D/W Dishwasher

F2C Floor to ceiling windows.

FDR Formal dining room

Fixture Anything of value that is permanently attached to or a part of real property. (Real estate legally is called real property, while movables are called personal property). Examples of fixtures include, installed wall-to-wall carpeting, light fixtures, window coverings, landscaping and so on. Fixtures are a frequent subject of buyer and seller disputes. When in doubt, get it in writing.

FRBO For rent by owner

FRPLC, FPLC, FP Fireplace

Galley Kitchen A full kitchen in which there are two sides, and one would walk through the center

GAR Garage

GARD Garden

GUAR Guarantor

GRMET KIT Gourmet kitchen

HDW, HWF, HDWD Hard Wood floors

HI CEIL High ceilings

JR1 A studio apartment with a sleeping alcove

JR4 A one bedroom apartment with a separate dining room or dining alcove

NR BST SCHLS Near best schools

Pass Thru Pass through window in kitchen to dining room or living room (typically found in galley kitchens)

P.T. DRMN Part-time doorman

Pullman Kitchen A once popular method of space saving, it resembles a closet at first glance. Behind the doors, are two burners, a small sink and usually, a mini refrigerator.

PWDR RM Powder room or half bath

Terrace A private outdoor space, typically larger than your everyday balcony.

Tri Triplex

UPR Upper Floor

VW, VU, VWS, VUS View(s)

WALL OK Pressurized walls are permissible for conversion

WBRFPLC Wood burning fireplace

W/D Washer/Dryer


Contact Alfred Real Estate today for exclusive luxury properties in Manhattan.

Buyer Competition on the Rise

Over the past year or so, buyers looking to invest in Manhattan real estate have had the upper hand over sellers. With transactions virtually frozen in the wake of last year's collapse of Lehman Brothers, sellers grew alarmed, dropping prices and offering incentives to tempt purchasers.

Now, for the first time since the collapse of the market, many market experts are speculating that this heyday for buyers may be nearing its end—or that at least their advantage is shrinking.

More buyers—especially those who hesitated to buy during the financial crisis—are now searching for bargain prices as the stock market recovers and prices drop.

“Brokers are starting to notice more competition,” says Dan Babush, founder of Alfred Real Estate. “Now that prices are at an all time low, buyers who had been patient are stepping back into the game.”

Upper West Side broker Babush has noticed a large number of buyers looking for "classic six" apartments priced under $1.5 million. The sudden interest in these properties has resulted in multiple bids for this type of property. In response, sellers of these well-priced apartments no longer have to negotiate as much.

Another sign that buyers might be losing the upper hand is home seekers have started to complain about lack of inventory. The demand for Manhattan homes is extremely high, and the inventory cannot match it. Trying to find homes in the most desirable neighborhoods has become very competitive.

There's one major stipulation to all of this: Unlike in the boom, overpriced homes simply don't sell. Appropriate pricing brings the best results, and with the market still offering some of the lowest prices in decades, apartments priced within that range generally sell in a matter of weeks.

The new development market is also starting to see inventory drop as the supply of new projects dries up. These developments have gotten a boost in sales from international buyers who are showing a renewed interest in the city, prompted by low prices.

As a result of all these factors, homeowners who had avoided putting their homes on the market are having a change of heart. Brokers are being contacted by sellers who are contemplating selling their homes sometime in the near future. With open houses being packed the past month or so, sellers are gaining confidence that there will be an interest in their home.

The Manhattan Market for Foreign Investors

This week Jonathan Miller from Miller Samuel Inc. looked at Manhattan through the eyes of European buyers who were buying property in droves a few years ago.

He charted median sales price (black line) against median sales price adjusted for the difference between the Euro and the US Dollar (red line). The gray columns show the percentage difference between the Euro and the US Dollar at the end of each quarter.

The spread remains wide compared to a few years ago, when all those foreign investors were active in the market.

The weak dollar and the spread between various currencies remains a compelling economic force for those who can afford to buy in Manhattan. With the addition of prices being at the lowest point in decades, now is the time for foreign buyers to invest in Manhattan real estate.

Other news from the Real Estate market indicates that now is the time to invest. For example, mortgage rates are at their lowest point in years. In addition, the stimulus first home buyer tax credit has been extended to April 2010, giving first time buyers more incentive to take advantage of this market.

Foreign investors: Take advantage of the market today. Contact Alfred Real Estate.

The Buyer's Guide to Preparing a Board Package

When purchasing a co-op apartment, you will be required to complete a purchase application and assembling a board package—a comprehensive presentation of financial documents and references. The main purpose of the board package is to guarantee the corporation of your financial ability to support the apartment and to give them confidence that you will be a “cooperative” shareholder and welcomed member of their community.

Each co-op has its own set of requirements and application forms, which Alfred Real Estate will obtain for you from the managing agent of the building. The package will most likely consist of:
Purchase Application: This should be typed. Fill in all blanks and answer all questions (fill in “not applicable” when necessary).

Credit Release Form: This allows the managing agent to obtain a credit check for each applicant.

Financial Statement: This is a statement of all assets and liabilities and supporting documents. The sums on the statement must reconcile with the attached supporting documents. Every item on the statement (except personal property) must be documented. Don't forget to add earnest money (deposit on contract) in the asset column.

Reference Letters: You will be asked to provide a combination of personal and business reference letters. It is through these letters that the board will attempt to get to know you. Have your friends and associates write positive things about you-but also include some basics: How long have they known you? How did you meet? Why do they think you will make a great addition to the community? If they live in a co-op or have served on the board at their building, it is a good thing to mention. Letters should be addressed to the Board of Directors, on letterhead and with their contact information.

Tax Returns: Most co-ops require two years' worth of tax returns including all schedules and W-2 forms.

Landlord Reference: This verifies your prompt payment of rental or maintenance charges.

Bank Reference Letter: Just ask a banker at your local branch. They do this all the time and will know what you are talking about.

After you've gathered together all your documents, your agent at Alfred will have them copied and submitted to the managing agent for you. As a rule, if you are applying for a mortgage, managing agents do not accept any papers without a written commitment letter from the bank.

Mortgage Rates in U.S. Drop to Record Low

Mortgage rates for fixed 30-year loans in the U.S. dropped to a record low of 4.71 percent for the week ended today, the lowest since Freddie Mac began compiling the data in 1971. Rates on 15-year fixed-rate mortgages were 4.27%, down from last week's prior low of 4.29% and 5.77% a year earlier. This comes amid signs that the housing market is beginning to emerge from the worst slump since the 1930s.

Five-year adjustable-rate mortgages averaged 4.19%, up from last week's record low of 4.18% but were down from 5.77% a year earlier. One-year ARMs were 4.25%, its lowest level since June 2005, down from 4.35% last week and 5.02% a year earlier.

Economists at Huntington National Bank in Columbus, Ohio speculate that rates probably won’t go any lower, and that they’re at the lowest point they are going to achieve in a long time.

The index of signed purchase agreements, or pending home sales, climbed 3.7 percent to 114.1 after rising 6 percent in September, the National Association of Realtors said on December 1st.

The low mortgage costs, in addition to the recent extension of the new homebuyer tax credit, have increased the demand for property. In October the demand for contracts to buy previously owned homes increased and the demand for applications for mortgages continue to increase.

With prices and rates this low, there has never been a better time to invest in Manhattan real estate. Contact Alfred Real Estate today!

First-time Homebuyer Tax Credit Extension Highlights

In addition to record low co-op, condo and mortgage rates, those who bought a main home recently or are considering buying one and who haven’t owned a main home during the past three years qualify for the first-time homebuyer credit.

• This unique credit of $8000 is refundable, which means you don’t have to pay it back to the government!
• It can be claimed on either your current return or you can amend your previous tax returns.
• If you owe less tax than the amount of the tax credit, say $300 to the government before claiming the credit, the government will send you a check for $7,700.
• Even if you had no income in 2008 or 2009, owed no tax, and purchased a qualifying house in 2009, the government will send you a check for $8,000.
• This deal applies to Manhattan apartments, co-ops and condos priced at less than $800,000.
  

Get in touch with Alfred Real Estate today to take advantage of this once in a lifetime opportunity.

For more details on the first-time homebuyer tax credit extension, click here.

Manhattan Rental Market Shows Signs of Stabilizing

November market reports indicate that while Manhattan is still showing some of the lowest rental prices over the past few years, rates over the past couple of months appear to be stabilizing.

Rents dropped just .03 percent this November, compared to October. This figure has caused experts to speculate that the market is stabilizing, because a more dramatic seasonal decline is typically seen during the month.

"We were actually somewhat surprised to see that November [prices] were [so stable]," says Daniel Baum, CEO The Real Estate Group of New York. He attributed the unseasonably strong numbers to a delay in spring Wall Street hirings. Businesses in Manhattan are beginning to take on new employees, and the influx of new hires appears to be reviving the rental market.

Inventory also showed improvement in November compared to October, with overall Manhattan rental inventory dropping 5.36 percent and non-doorman inventory down 11.94 percent.

Some Manhattan neighborhoods, such as Soho, are still experiencing drops in rental prices. This would indicate that while the market is showing signs of stability, there is still a chance that rents will go lower in many areas of Manhattan.

The bottom line: It is still a renter’s market. Now is as good a time as ever to rent in Manhattan. With inventory high and prices low, you could be renting your dream home today. Contact Alfred Real Estate today.