March 8, 2010
The market is kicking and we can feel it, based on our open house traffic, other
of our colleague’s open houses, the amount of phone calls we are receiving and
appointment requests.I can attribute the rapid pace of the market to the
-Mortgage rates are still low-Wall Streets ’09 Bonuses were Robust-
The Bottoming of the NYC Residential Real Estate Market
- The “New Year Effect” = every new year people wake up on or about January
3rd and say, “ Oh my God, it is time to Sell my apartment or Buy an apartment!”
- The absorption rate has decreased by a full 10 months to a new 9 month
A good absorption rate average for a healthy market is 6-9 Months, so we are
moving in the right direction.
- A new feeling of confidence amongst buyers is in the air!
A few things to keep in mind if you are a seller-~
It is still all about the price- do not
hold on to 2006-2007 prices, those days are over for now.~ Make sure your
building has been vetted by your agent.
· What is the owner occupancy?
1. The majority of co-op and condo guidelines have not changed at most
They want at least 50 to 70 percent of a building's units occupied by primary
owners, no more than 20 percent investor-owned units, as well as strong
financials, no outstanding litigation and a minimum of 10 or more units per
building, which lessens the risk that one individual in default could drag an entire
building into foreclosure.
2. The fear is that with a high percentage of sponsor-
owned or investor-owned units, a financial default by one shareholder could
place an enormous burden on the rest of the shareholders, thus placing the
underlying mortgage payments in jeopardy.
· How much money is in the
· Is the building running at a deficit or is it running on budget?
· Are there any major repairs in the future and how is the building going to pay
for the upgrades or repairs?
· How old is the roof
· How old is the boiler
· Does the building allow pets
· Does the building allow guarantors
· Does the building allow parents gifting?
· What is the superintendent of the building like? Does he know the building
like the back of his hands?
· Does the building allow central air?
· Are there current audited financials?
· What type of information is in the minutes?
· Many buildings are not allowing the use of interest-only loans.
· Is the building on a bank approved list? At successful co-op buildings and
condos, a sponsor will usually gain pre-qualification from a lender, which will then
place the building on a list of approved co-ops, which in turn speeds the process
of approving loans for individual apartments.
· What is the size of the fidelity bond insurance on the building? The Fidelity
bond insurance equals 25 percent of its annual maintenance into a bond which
protects the building against employee dishonesty. The bottom line is that your
agent has a lot of work to do to not only get a qualified buyer, but also to make
sure that the buyer’s bank is going to give them a loan. If you have any questions,
please email me:firstname.lastname@example.org