Home Buying in New York>Question Details

Noam, Both Buyer and Seller in New York, NY

Co-ops Vs Condos

Asked by Noam, New York, NY Sun Dec 2, 2012

Why are co-ops cheaper than condos? Is it because they have more holding costs?
And how are the holding costs different?

Help the community by answering this question:


Joseph Hastings’ answer
Hi Noam. First, let's discuss the difference in prices between Vegas and the big Apple. Where you live now you can probably purchase a 3 bedroom home with 2 full baths a large eat-in kitchen and a nice yard for around $250K or less and sometimes much less. That won't happen in Manhattan. You might maybe find a Studio apartment for $250k but probably you'll pay more depending on the specific location and building amenities. The take away is Manhattan is expensive.

Coops, as other have said below, are purchases of shares in the coop building where you buy actual stock and get a proprietary lease to habitate the apartment. It is referred to as purchasing the stock and lease. You don't get a deed to the place like you would if purchasing a house or a Condo unit.

Coops have monthly carry charges that are referred to as the Maintenance. This monthly maintenance covers many things. Some of these things are, upkeep of the property, trash disposal, snow removal, liability insurance and salaries for doormen, etc. There is more as well. Within the maintenance amount is you real estate taxes and perhaps cooking gas. There is still more but I tire of typing.

A coop can make a lot of sense especially if one is watching their pennies. Condos can be well upwards of $100K + for a similar sized coop. It could even go for double the amount. With a Condo, you get a deed and your taxes are billed to you separately. You'll also pay common charges which are used for bldg upkeep, etc. There is a lot to be aware of when making a purchase in New York City. If you are thinking of purchasing, I strongly suggest you DON'T go it alone. Get a broker.

If I can be of service, please feel free to contact me. Keep in mind you don't pay the broker for services rendered, the seller pays.


Joseph Hastings
NYS licensed Broker Associate
Douglas Elliman Real Estate
cell: 1-917-579-1502
0 votes Thank Flag Link Mon Dec 3, 2012
Hi Noam,

When average prices, median prices and price per square foot are compared market wide for all apartments condos skew higher. However, most apartments are not average or median. There are many variables and you need to compare apples to apples not apples to oranges.

There are pros and cons to both coops and condos

1. Supply and demand. Fewer condos and many buyers can not qualify to purchase coops therefore prices of condos are pushed up by demand. Investors and foreign buyers often push up the price of condos because they can not qualify to buy a coop.

Many condos are new construction developments. Some of the prices in these buildings are record breakers such as 15 CPW or One57 therefore all condos skew higher when looking at average prices and data. This data should only be used to look at trends. Every neighborhood, building even block in Manhattan price point and room count have their own nuances.

2. Many coops have underlying mortgages condos do not. These coops have debt associated with the unit. Debt lowers value. Coops that own retail space in the building can collect rent. Condos with retail the retail space was sold as separate condo units and rarely benefit the condo.

3. Some of the most sought-after exclusive buildings in NYC are coops. The Dakota, the famous coops on Central Park West, 5th Avenue and Park Avenue are homes to some of the wealthiest New Yorkers. Many of these buildings do not allow financing or require 50% down, they may require assets and net worth of several times the price of the apartment.

4. Apples/Oranges. A full service luxury coop to a full service luxury condo, post war to post war, prewar to prewar. (most condos are post war - most coops are prewar) similar amenities. There usually is another premium paid for prewar condos because there are so few of them such as The Ansonia, The level Club, The Apthorp, 36 Gramercy Park.

A coop is a corporation with shareholders. They can be quite exclusive and offer "quality of life" that many New Yorker's prefer to the transient "hotel like" dormitory atmosphere of many condos. There are many other problems that condos face such as foreclosures that are not issues in most coops.

Only a coop board can initiate a foreclosure not a lender. Coops get first lien in exchange lenders pay maintenance to coop when borrower is in arrears for 90 days. In fact many condos today have "coop envy" Condo boards have little control other than "right of first refusal" The only way they can reject a purchaser is for them to buy the apartment at the same price and terms being offered.

Thanks to coops (70% of home ownership in Manhattan) we were spared the housing crisis, foreclosure crises, sub mortgage crises, short sales etc etc. The only reason our market declined was because Lehman Bros. went out of business. We didn't have a steady yearly decline like Las Vegas, CA, FL, Arizona and many other markets. We crashed overnight. Prices declined about 20% and are now back to pre Lehman prices. Nothing like the 40-70% decline in the rest of the country.

The transaction costs are lower to purchase a coop. Since a coop is not considered "real property" but "personal property" they are exempt from NY state mortgage recording tax (approx 2% loan amount) Coop shareholders don't have a mortgage they have a coop loan.

Unless you're an investor or a flipper looking for a source of income rather than a primary residence, a Manhattan coop can still be a great investment and a wonderful place to live. Find a neighborhood, an apartment and a building you love first then decide if it can fit your lifestyle.




Mitchell Hall
Lic. Assoc. RE Broker
office: 212.877.6268
fax: 212.230.4244
iPhone: 917.312.0924
1 vote Thank Flag Link Sun Dec 9, 2012
Mitchell Hall, Real Estate Pro in New York, NY
There are several issues that affect the relative level of prices of condos vs. coops. At the end of the day it comes down to the econmic issue of supply and demand. Condos are viewed as being more desirable and therefore in more demand. However, the supply of condos is outnumbered in New York City by the number of coop apartments by a factor of approximatelt 2 to1. When something is in high demand and the supply of it is limited, prices rise to the highest point people are willing and able to spend

.Michael Richman
Licensed Real Estate Associate Broker
Bellmarc Realty.
681 Lexington Avenue
New York, NY 10022
Phone 212-688-8530 x223 Cell 917-991-2528 Fax 212-758-7495
Email mrichman@bellmarc.com
1 vote Thank Flag Link Mon Dec 3, 2012
Co-op ownership represents an interest (i.e. stock) in realty; condo ownership is actual ownership of realty. Price differences reflect demographic and geographic distinctions. You decide what’s best for you.
1 vote Thank Flag Link Mon Dec 3, 2012
Main reason is that it more difficult to buy a co-op so the buyer pool is smaller.
0 votes Thank Flag Link Sat Oct 5, 2013
Coops are less expensive because they are not considered real property, you don't own the unit. You own shares in a corporation which entitle you to a proprietary lease. Basically it's glorified renting, the only real benefit is possible resale value down the road.

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
William Raveis Legends Realty Group
0 votes Thank Flag Link Mon Dec 3, 2012
Coops are approximately 40% cheaper because when you buy a coop you will not own real estate, you will own shares of a corporation that owns the building and because coop boards have to approve every purchaser, which is very time consuming, requires full financial disclosure, personal and business references, and 2-2.5 years of maintenance and mortgage payments in liquid assets. Coops also have restrictions on renting out apartments. On re-sale, a new buyer also has to be approved by the coop board, which may take longer to find a qualified buyer, etc...
0 votes Thank Flag Link Sun Dec 2, 2012
aother part of the equation as to why condos are more expensive has to do with what happens when you want to sell - you do not need "board approval", and a complicated process to navigate with a condo - it is deeded to you - so you have more freedom to sell.......and usually an easier transaction.
0 votes Thank Flag Link Sun Dec 2, 2012
0 votes Thank Flag Link Sun Dec 2, 2012
Hi Noam,

Typically co-ops are cheaper than condos because when you purchase a co-op you are purchasing shares in a co-operative there by you are an owner of a portion of the unit versus when purchasing a condo you are purchasing the entire unit not a shared portion. Holding costs don't apply to condominiums in NYC.

I hope this helps.

Best Regards,
Tasha Trice
646 926-0609
0 votes Thank Flag Link Sun Dec 2, 2012
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