I have learned a few things since the collapse of Lehman Brothers (widely accepted as the death knell of the NY RE market). 1. No one is recession proof. 2. Even people who are still ready to buy are pausing. Their retirements portfolios are down 40%, they may still have a job, but there were cuts in their department or they are waiting for the market to bottom out. I am not a numbers cruncher, so I can only report my tiny sliver of the market, but I am encouraged by what I see. Here's what I can tell you: In the last 3 weeks, I've held open houses for a listing that was recently reduced to under a million. It is easily priced at 25% under the peak price. The first week, I had 30 unique visitors to the open house (meaning I had more than 30 people, some were in groups or with brokers). The next 2 weeks I had 15 unique buyers. Those are strong numbers, any way you look at it. Granted, I don't have an accepted offer, but there are lots of people who are ready to make the move. It may take twice as long (or three times as long or four times as long), but the buyers are out there. I heard about a well priced family sized apt on the Upper west Side that had 50 unique buyers through the doors during last week's open house. I'm not predicting an immediate turnaround. I'm not predicting anything at all. (Even my smart Wall Street friends are no longer predicting). But I do think that it's possible that a combination of astonishingly low interest rates and low prices will make buying sooner rather than later a reality instead of a temptation.
There are those who will wait to see if prices drop further (and they may). I believe that if you're in it for the long haul, it won't matter much if prices drop another 15%. You'll be in the apartment when they've risen another 30% over time. And you'll have the joy of living in a home that you love while everyone else is still waiting for the other shoe to drop.
Sunday, January 25, 2009
Friday, January 9, 2009
The Truth About Townhouses
Now that the market is, um, correcting, it poses an opportunity for some people to take advantage and jump into to real estate. I realize that not everyone has several million dollars to invest in a home, but for those who do, a townhouse is a beautiful way to live.
A vacant townhouse is always a premium, but sometimes you can buy a townhouse with rent stabilized tenants and empty it over time. I've sold several homes to people who were taking them over for their own use, and have gotten a great deal. Maybe you only need to live in half the space for several years as your family grows. Then you even have income to offset the costs.
How many couples argue over leaving the city? I hear it all the time: the husband is ready to go, and the wife, (rightly) concerned about her quality of life is reluctant to leave. If she's the primary caregiver, she'll be the one in the minivan schlepping all day long. A townhouse is the perfect compromise to the suburban alternative.
Some people are "view" people. They want to look out their window and see lots of sky, or the Park, or the River. I get it; it can be pretty spectacular. Some people are "amenities" people...they want the doorman to take the dry cleaning, they want the gym in the basement, and the super to take care of leaks. I get that as well.
But those people who can be persuaded to leave those things behind, a townhouse offers so much more.
First of all, on a square foot basis, a townhouse is generally a better value than an apartment. In a townhouse, you're usually getting a minimum of 3000 sf, up to what can easily be 7000 sf. Let's take an average 18 sf townhouse of 4 stories and call it 4500 usable sf. Let's not forget the additional 400 sf of outdoor space on the garden level, and say an additional terrace somewhere off of the extension of 150 sf. A vacant townhouse (which will need work, no doubt) will run you more or less $1000 per sf, but it soon could be less than that. When you're finished with a high end renovation, it'll have cost you $1200 to $1400 per sf, and you'll have everything you've ever wanted in a home without leaving for the suburbs. Let's discuss further before we talk about townhouse particulars:
If you're buying a townhouse, you have kids. Maybe lots of them. Are you constantly worried about them bouncing a ball above your neighbor's heads and having the doorman call you to complain? Fear no more. What about a big classic eight apartment that still only has 1 kids bath? It's still $4M, with no outdoor space, and not a lot of room to roam.
Do you have a dog? Tired of that midnight walk to insure that your Oriental carpet isn't ruined further? A townhouse provides the answers. Not to mention that it can provide that Viking BBQ that you've secretly always coveted. Most townhouses were built with multiple gas burning or wood burning fireplaces. How many apts have one or more functioning fireplaces? It's easy to dismiss it, but mid-January when you smell someone burning a fire in their hearth, doesn't make you a tad wistful?
A townhouse affords you more privacy than the average apt. Unless you have 14 rooms somewhere, even a sprawling apt doesn't really keep the kids out of your hair. But if you have a playroom, or your own study, there's room for peace as well as play. It's a fallacy that townhouses are dark--it depends how it's situated, but a north/south townhouse generally gets great sun in different places through the day.
There are many different period of townhouse styles (and that's a different post). In the village, you'll find a lot of Federal, Greek Revival and Georgian (mid to late 19th century), but on the Upper West, there are far more 20th century homes, many in a Queen Anne, Romanesque or Revival style. I live in a townhouse built around 1907 for German laborers (who had come to NY to build fancier townhouses). My home (17') was specifically constructed for the middle class.
The structure of a townhouse is pretty standard. They vary in width, anywhere from 13' to over 25'. (14' is pretty small, but I've seen it work many times. The rooms are still 13' across). A 25' townhouse, usually built in limestone and not brownstone, were generally built as mansions and feel that way. They are extraordinary. The gold standard for a townhouse is generally 20', but 17' and 18' are pretty common as well. Even in a 17' townhouse you can usually accommodate an elevator (which may sound dumb and unnecessary but it's important for re-sale and your in-laws will appreciate it. It costs about $100,000 to install). In addition, a 17' townhouse, you can still split one big room and make it 2 kid's rooms, each of a decent size.
Some townhouses have basements below the ground floor that can be dug out even further, which allows for things like a kid's playroom, a wine cellar, a screening room. All of the trappings of Suburbia without the Sam's Club. Some townhouses have the mechanicals on the ground floor and no basement. This is often referred to as an "English Basement" and the ceiling height is usually over 8'.
The location of the stairs also changes the feeling of the home. A center staircase rather than a straight staircase, allows for more gracious rooms on either side of it. I've noticed that many narrow townhouses have a center stair to make them appear more gracious inside.
The ground floor is often used as the kitchen floor which leads out to the garden. Depending on your needs, people often create a guest room or staff room on this floor as well.
The parlor floor is the entrance off of the stoop. Many townhouses were built with stoops, although there are some built with the original entrance on the street. The parlor floor was built as the receiving floors. They were always the most ornate, with the highest ceilings, most intricate woodwork. Many people have installed their kitchens and living rooms on this floor instead of the ground floor, but that was not the original layout.
Often a townhouse was built with an extension off the back that usually makes a great study on the parlor floor (and then becomes a terrace because it usually wasn't built the entire height of the home).
The next 2 or 3 floors are for the bedrooms. Historically, the master bedroom floor was located right above the parlor, and then the children's rooms and then the staff rooms. Depending on the width, one can easily get 3 or bedrooms per floor, and as many as 2 baths (and a laundry room!)
There's often room to build up, generally a half a floor with another terrace.This floor will often have extraordinary light as well.
If you're lucky, you'll also get a terrace for your morning coffee, and a giant walk in closet for your master suite. There's usually enough room for a home office as well as a den. And the short commute makes a real difference in everyone's lives.
To me, it beats a McMansion in Larchmont any day.
A vacant townhouse is always a premium, but sometimes you can buy a townhouse with rent stabilized tenants and empty it over time. I've sold several homes to people who were taking them over for their own use, and have gotten a great deal. Maybe you only need to live in half the space for several years as your family grows. Then you even have income to offset the costs.
How many couples argue over leaving the city? I hear it all the time: the husband is ready to go, and the wife, (rightly) concerned about her quality of life is reluctant to leave. If she's the primary caregiver, she'll be the one in the minivan schlepping all day long. A townhouse is the perfect compromise to the suburban alternative.
Some people are "view" people. They want to look out their window and see lots of sky, or the Park, or the River. I get it; it can be pretty spectacular. Some people are "amenities" people...they want the doorman to take the dry cleaning, they want the gym in the basement, and the super to take care of leaks. I get that as well.
But those people who can be persuaded to leave those things behind, a townhouse offers so much more.
First of all, on a square foot basis, a townhouse is generally a better value than an apartment. In a townhouse, you're usually getting a minimum of 3000 sf, up to what can easily be 7000 sf. Let's take an average 18 sf townhouse of 4 stories and call it 4500 usable sf. Let's not forget the additional 400 sf of outdoor space on the garden level, and say an additional terrace somewhere off of the extension of 150 sf. A vacant townhouse (which will need work, no doubt) will run you more or less $1000 per sf, but it soon could be less than that. When you're finished with a high end renovation, it'll have cost you $1200 to $1400 per sf, and you'll have everything you've ever wanted in a home without leaving for the suburbs. Let's discuss further before we talk about townhouse particulars:
If you're buying a townhouse, you have kids. Maybe lots of them. Are you constantly worried about them bouncing a ball above your neighbor's heads and having the doorman call you to complain? Fear no more. What about a big classic eight apartment that still only has 1 kids bath? It's still $4M, with no outdoor space, and not a lot of room to roam.
Do you have a dog? Tired of that midnight walk to insure that your Oriental carpet isn't ruined further? A townhouse provides the answers. Not to mention that it can provide that Viking BBQ that you've secretly always coveted. Most townhouses were built with multiple gas burning or wood burning fireplaces. How many apts have one or more functioning fireplaces? It's easy to dismiss it, but mid-January when you smell someone burning a fire in their hearth, doesn't make you a tad wistful?
A townhouse affords you more privacy than the average apt. Unless you have 14 rooms somewhere, even a sprawling apt doesn't really keep the kids out of your hair. But if you have a playroom, or your own study, there's room for peace as well as play. It's a fallacy that townhouses are dark--it depends how it's situated, but a north/south townhouse generally gets great sun in different places through the day.
There are many different period of townhouse styles (and that's a different post). In the village, you'll find a lot of Federal, Greek Revival and Georgian (mid to late 19th century), but on the Upper West, there are far more 20th century homes, many in a Queen Anne, Romanesque or Revival style. I live in a townhouse built around 1907 for German laborers (who had come to NY to build fancier townhouses). My home (17') was specifically constructed for the middle class.
The structure of a townhouse is pretty standard. They vary in width, anywhere from 13' to over 25'. (14' is pretty small, but I've seen it work many times. The rooms are still 13' across). A 25' townhouse, usually built in limestone and not brownstone, were generally built as mansions and feel that way. They are extraordinary. The gold standard for a townhouse is generally 20', but 17' and 18' are pretty common as well. Even in a 17' townhouse you can usually accommodate an elevator (which may sound dumb and unnecessary but it's important for re-sale and your in-laws will appreciate it. It costs about $100,000 to install). In addition, a 17' townhouse, you can still split one big room and make it 2 kid's rooms, each of a decent size.
Some townhouses have basements below the ground floor that can be dug out even further, which allows for things like a kid's playroom, a wine cellar, a screening room. All of the trappings of Suburbia without the Sam's Club. Some townhouses have the mechanicals on the ground floor and no basement. This is often referred to as an "English Basement" and the ceiling height is usually over 8'.
The location of the stairs also changes the feeling of the home. A center staircase rather than a straight staircase, allows for more gracious rooms on either side of it. I've noticed that many narrow townhouses have a center stair to make them appear more gracious inside.
The ground floor is often used as the kitchen floor which leads out to the garden. Depending on your needs, people often create a guest room or staff room on this floor as well.
The parlor floor is the entrance off of the stoop. Many townhouses were built with stoops, although there are some built with the original entrance on the street. The parlor floor was built as the receiving floors. They were always the most ornate, with the highest ceilings, most intricate woodwork. Many people have installed their kitchens and living rooms on this floor instead of the ground floor, but that was not the original layout.
Often a townhouse was built with an extension off the back that usually makes a great study on the parlor floor (and then becomes a terrace because it usually wasn't built the entire height of the home).
The next 2 or 3 floors are for the bedrooms. Historically, the master bedroom floor was located right above the parlor, and then the children's rooms and then the staff rooms. Depending on the width, one can easily get 3 or bedrooms per floor, and as many as 2 baths (and a laundry room!)
There's often room to build up, generally a half a floor with another terrace.This floor will often have extraordinary light as well.
If you're lucky, you'll also get a terrace for your morning coffee, and a giant walk in closet for your master suite. There's usually enough room for a home office as well as a den. And the short commute makes a real difference in everyone's lives.
To me, it beats a McMansion in Larchmont any day.
Saturday, January 3, 2009
Park West Village and a Tale of Two Condos
First, a (very) brief history of the cluster of buildings known as PARK WEST VILLAGE. There are four, independently run condos (372 CPW, 382 CPW, 392 CPW and 400 CPW) that form a quadrangle on 97-100 streets and Columbus and CPW. Built in the 60's (and they share that post-war, slightly Soviet looking brick exterior), the buildings were converted to condos in the early 80's. Because they've been condos so long, they have VERY low carrying costs as well as low real estate taxes. They each have their own amenities inside, but they share a common parking lot, as well as gardens and playgrounds. IMHO (although I think this is common knowledge) 372 CPW (or THE VAUX, as it is officially named but I think that smacks of desperation in trying to sound fancier...sort of like naming your kid Tiffany) is the jewel in the Park West Crown. It's actually ON CPW and 97, and many units have fantastic views (more on that later). It also has a renovated and tasteful lobby and a lovely new gym, as well as a huge community room with a library, a bike room, and a children's play room. There are nominal monthly fees for the gym, the bike room and the playroom. The on-site parking, for which is there is several year waiting list, is currently $175 monthly. Yup, you read correctly. The going rate in that neighborhood is about $450 monthly, so you'd save $3300 annually when you hit the lottery and get off the waiting list.
After 372, I think 400 is the best run building, also with excellent facilities. It too, sits right on CPW, at 100 street.
Maybe because of the subsidized housing look of the exterior, or the location just past the 96th street invisible border of the "good upper west side", or the relative proximity of the housing projects on Manhattan Avenue and 100th street, Park West Village has tended to be undervalued. Even at the height of the market, apts with full on Park views and Park facing terraces were trading at $1000 per sf, sometimes a little more. (In February, an 1141 2 bed 2 bath with full on Park Views and a north facing terrace sold for $1400 per sf. That's certainly a new record, and one that will stand for quite some time, I'm sure. It was a beautiful renovation).
Which leads me to part 2 of Park West Village: A Tale of 2 Condos.
I currently have apt 17C on the market at $1,350,000. It's the same unit as the one that sold for $1400 per sf, only this is 9 floors higher. The views are breathtaking. I'm asking $1125 per sf. Did I mention the views? The apartment has a renovated kitchen, but in general could use some updating. Still...
Now I'd like to comparison shop with a nearby condo, which in many ways is the perfect comp:
Apt. 22A in the Ariel East, located on 99th and Broadway. It's a new development, and arguably a more aesthetically pleasing exterior. (Although, frankly, it depends on whom you ask). Because the building is new construction, there are tax abatements in effect for the next 10 years.
this is our listing http://www.randny.com/listings.cfm?ListingID=269162&ListingSource=RPL&PropType=S
and theirs:
http://www.corcoran.com/property/listing.aspx?Region=NYC&listingid=939319
Their asking price: $2,510,000 ($1552 per sf)and theirs:
http://www.corcoran.com/
Ours: $1,350,000 ($1125 per sf)
Their cc: $1915.00
Ours: $631
Their taxes: $82 monthly, increasing by 20% every 2 years
Ours: $368
372 CPW is only a few hundred sf smaller than the Ariel, (and BTW, their measuring includes a certain percentage of common space, and they measure from outside wall to outside wall. I think the net difference is much smaller than the quoted sf would imply). Our second bedroom is actually the same size as their master bedroom, and our second bedroom is larger as well. We both have a terrace. Our view is better. They have a larger terrace (but still...they BOTH have terraces). We have a STUNNING VIEW.
Which apt makes more sense? Which is the better investment? Which has the better view? I leave those questions for you to decide. If you're looking for a condo, don't overlook Park west Village. By the way, there are new luxury rentals going up at Columbus and 97th. They will house a new Whole Foods, a Modells, a Borders (if it doesn't go bankrupt), a Michael's arts and crafts store, 2 new schools (Mandell school expansion and Solomon Schecter) and a TJ Maxx. That addition to the neighborhood will only improve the value of apts at park West Village.
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