Page 6 - New York Cooperator January 2020

6 THE COOPERATOR — JANUARY 2020 COOPERATOR.COM While reports show a citywide trend of sellers scaling back asking prices for co-ops and condo units, AM New York reports that the under-$1 million tier is holding its own, and the $500,000-ish market actually seems to be in pretty good shape. The reasons for this are somewhat self-evident, according to the report. Under- $500k properties “tick a lot of boxes: An entry level home for millennials where a mortgage payment is equal to or less than what renting would cost, an affordable pied- a-terre for out-of-towners or a buy-and-hold for investors.” On top of all that, less-luxe pads dodge the mansion tax bullet, and usually don’t come with exorbitant monthly fees. According to AM New York , “A look at Market- proof’s recent data analysis for Brooklyn confirms this with 509 condos sold in Octo- ber alone and just over half (275) priced at under $1 million. Of those, 66 were priced under $500,000. At this price point, newly constructed units in Bedford-Stuyvesant, Crown Heights, Bushwick fit the bill of many buyers.” Indeed, all the specific properties mentioned in the article—except for one, Eleven Hancock in Harlem—are in Brooklyn or Queens, which perhaps underscores the slug- gishness of the Manhattan market, where ‘affordable’ means something quite different than it does in less cutthroat markets. n Cooperator.com From If selling is an art, then real estate agents are in many ways like landscape painters—in other words, they prefer a vista without human characters. It’s not that they don’t like people; it’s be- cause it’s much easier for a prospective buyer to imagine him- or herself in a home when the current occupant isn’t hovering around. The Cooperator spoke to several New York City brokers and asked them to explain why an apartment is best viewed without the seller at home. What’s Up with That? Joanna Mayfield Marks, a Halstead-affiliated broker based in Brooklyn, recounts the time a seller came to the door of a home she was showing, wearing nothing but boxer shorts and a do-rag. The buyers declined to get out of the car. Agents routinely tell sellers to make themselves scarce when their apartment is being shown. Some even go as far as to spring for the seller to go to brunch, or to visit a spa to get them off-site during an open house. But even with these incentives to clear the heck out, sellers can often be stubborn. So what seems to be the problem? “Sellers often linger because they’re curious,” says Mayfield Marks. “But buyers are put off when the seller is home. It’s a big problem. You need an arms-length sale, which the agent pro- vides between the seller and buyer.” When the seller is lurking around in the next room, “The buyer shuts down,” Mayfield Marks continues. “They don’t want to invade someone else’s space. They can’t imagine themselves in someone else’s home.” Dorothy Somekh, a broker based in Manhattan and also affiliated with Halstead, explains why sellers want to stay during showings. “They want an immediate reaction and a good result, but they read into the buyer’s reaction—or lack thereof. Often, they’re ‘anxious’ and they try to ‘sell,’ which never helps.” That’s the broker’s job, and they’re far better at it than the average homeowner. Hovering Homeowners When the Seller Just Won’t Leave BY A J SIDRANSKY Owners looking to make a killing on their apartments are getting a cold splash of real- ity, according to a recent report from Marketproof. While sales prices in the NYC market have indeed increased by some 43% since 2006, sellers’ anticipation of princely profits have outpaced what the market will actually bear. As recently as 2015, buyers often paid asking prices without much fuss—but that ap- pears to be changing. After peaking in 2013, sales prices in Manhattan have decreased yearly, dropping more than 20%—and rendering the overall numbers lower than they were even in the wake of the 2008 financial crisis. The much-ballyhooed $1 million median asking price in Manhattan isn’t a thing anymore—or at least not at the moment—as prices have dropped 17% since last year. Market-watchers are quick to note that this is likely more of an adjustment than a har- binger of anything truly ominous, with one market research pro calling it “a shift in the velocity of the market,” and “...more of \\\[a\\\] correction and moderation.” Reasons for the adjustment cut across a number of economic factors, but the main culprits may be rising home prices that aren’t being matched with commensurate increase in incomes, and GOP-sponsored property tax deduction caps compelling homebuyers to think twice about borrowing big. Large mortgage payments look even less appetizing when they come with a sky-high tax bill as well. But speaking of mortgages, according to a recent piece on the trend in AM New York, “There is one potential game changer in the whole equation: mortgage rates. In July 2019 the Fed lowered the current fed funds rate to 2.25 percent. If rates continue to stay low or drop further the housing market may splutter back to life and NYC may again see packed open houses. If the rates increase, however, expect sellers on lower-priced properties to follow the lead of higher-end developers—and finally drop asking prices.” n Sellers Get a ‘Realty’ Check Price Dips Threaten Profits BY COOPER SMITH ‘Bargain’ Condos Selling Well, High End Slows Value Holds in <$1m Market BY HANNAH FONS COOPERATOR.COM continued on page 7 Solutions for Small and Mid-Sized Communities Making Life Easier – and Adding Value BY A J SIDRANSKY In real estate management, economies of scale are an important consideration, and in many respects apply to nearly every facet of life in co-op and condo communities. The ‘math’ is simple: the more units you have, the more ways you cut up the costs involved with operating the property. A large building with hundreds of units may be able to afford a full staff of workers, from lobby attendants to maintenance personnel, more easily than a community of 50 units. A community of 20 units can probably afford even less, and in a community of five units, it’s likely that the residents themselves assume the responsibili- ties and chores that a super might do in a larger building. It's in the smaller, more modest communities in which technology can be a huge help, offering a way to bring amenities to small buildings that were not available before. Adding Value Neil Golub is the director of sales for Carson Living, a company that provides tech- based integrated solutions for non-doorman buildings with up to 100 units. He describes the challenges of smaller properties thusly: “People may not realize that living in a smaller building can be more challenging than life in a larger building. I've also heard property managers state that despite having fewer residents, the smaller buildings can be much more difficult to manage. For starters, there tends to be less staff on-site. Larger build- ings are typically staffed with a doorman, live-in superintendent, and maintenance porter, and may have daytime janitorial. Really large complexes also often feature an on-premis- es management office. With full staff on-site, management operations tend to run more smoothly, and there's more fluid building communication with the use of resident-facing software like BuildingLink, MyBuilding and ActiveBuilding, which have become standard tools in these fully-staffed buildings.” Golub goes on to explain that “The likelihood of a 20-unit building having staff like a doorman is slim, which can result in a more challenging operation. Communication tends to be with paper notices and email. Building access, especially for package deliveries, has become problematic in unstaffed buildings.” Golub describes how he and his wife lived in a building like this, very happily. “Once we had a baby, though, we were forced to move to a doorman building because it was imperative to have dependable package delivery. Missing continued on page 7