On my way to work today in our New York City office, I was listening to Bloomberg Surveillance on 1130 with Tom Keene and Ken Prewitt as I usually do. I got excited when I heard they would be having my friend, top NYC appraiser and all around great guy Jonathan Miller from Miller Samuel, the Matrix blog, Soapbox blog and the new Housing Helix podcast on the show. It was a great conversation about the nuances of the current state of the New York City housing market.
Here are some screen shots from Twitter that I LIVE Tweeted [LIVE notes of what was being said]:
I tweeted that Jonathan Miller would be talking with Tom Keene on Bloomberg 1130 at 9am EST and Tom asked Jonathan if it was a good time to buy…..Sadly, I missed the 1st few minutes of the conversation as I just entered the Holland Tunnel
- A $1,000,000 property would be approx 25% less today than a year ago
- Inventory is up 25% in NYC
What’s the lag in assessment?
At least 2-3 years
75% of housing is Co-op’s and 2/3rd’s of sales
Foreclosures less likely in Co-op’s – strict board guidelines
Market trying to find itself after September tipping point
Co-op Fees on the Rise in Manhattan
According to the New York Times, “CO-OPS across the city have raised their maintenance charges by as much as 15 percent in recent months, and one of the main causes is rising property taxes.”
One reason is that the 7% homeowner tax cut was eliminated at the beginning of 2009. Another reason is that many multi-family properties have seen the assessed values of their properties go up. The rise in taxes means many Co-op building will pass those costs directly on to their shareholders in the form of assessments.
Traditionally, Co-op buildings have have numerous sources of revenue to help offset rises in operating costs such as direct revenue from commercial tenants in their building and from flip taxes paid by sellers or buyers. A flip tax is like a transfer tax where the seller or buyer [depends on the building] pays a % of the sales price or on the profit to the Co-op board. These funds are added to the buildings reserve fund which helps in building upkeep and operating costs. When either of these sources start to dry up, the reserve fund starts to deplete the Co-op board may implement what is known as an assessment to all of it’s shareholders to cover the costs.
“Retail tenants are all hurting,” said Richard Siegler, a lawyer who represents about 150 co-ops, “and they’re all coming to boards and asking for relief. If the economy improves, then a lot of this will go by the by, but if not, then boards will have to contemplate losing tenants, even though they’d rather not have a vacancy.”
In this economy, as sales slow and inventory rises, even some of Manhattan’s most prime Co-op buildings are starting to feel the pinch…….
Apthrop Condo Price Drop – Largest Since the Fall
The Real Deal reports that the Apthrop Condominium has slashed it’s prices per square foot from $3,000 to approximately $1,950 from last June……
“The price chop is the largest across-the-board reduction for a new condo or conversion project since the Wall Street meltdown this fall, said Jonathan Miller, president of appraisal firm Miller Samuel. The closest contender was a recent price cut at Northside Piers in Williamsburg that averaged 20 percent.”
I would love to hear more about what New York City real estate agents and tenants are seeing and experiencing themselves…….