Low Inventory: What does this mean for NYC Home Buyers and Sellers?

December 16th, 2014

Brokers like to quote market reports showing that NYC Co-op “inventory” is lower than last year, and that in general, there are fewer homes on the market now than in the past few years. What does this mean, and why is this happening?

First, the word “inventory” needs to be explained. While homes are not like cars that sit on a lot, the amount of homes that are for sale at any given moment is the “inventory” that buyers have to choose from. There is also the “shadow inventory” that people referred to a few years ago – homes that would have been for sale but for the fact that they have mortgages that have put them under water, keeping them temporarily off market. But those don’t have much of a presence in the NYC since most homes are purchased with a 15% or more down payment, and the market never had the sustained dip that others have had.

But the question remains – why are there less homes for sale now – specifically in the NYC market – than there have been historically?

There are all kinds of theories about why (both macro and micro) but our opinion is that people prefer cities to suburbs more than they did in the past. It used to be that the “first home” segment of the market was heavily favored towards urban living, but that as people advanced to other stages of life, they would gradually leave for the suburbs. This started in the 1950s when highways opened up suburban neighborhoods, and many middle class families fled to suburbs for lower crime and open spaces.

However as we now see, with a steep decline in the crime rate, and the appreciation for a shorter commute and greener footprint, city living is a more and more attractive alternative not just for young singles, but for families, retirees and other demographics. Others have pointed out that suburban homes were designed to have a full time “homemaker”, and that families with a homemaker are in rapid decline.

And as fewer people leave, and demand grows, inventory declines and prices increase.

This is exacerbated in Manhattan and to a lesser but still significant extent, Brooklyn, by the fact that all new construction seems to only be for the wealthy and foreign investors, with prices from $2-4K/foot.

So with the new construction market favoring the wealthy, what’s an average buyer to do? RealDirect CEO, Doug Perlson, offers the following 3 tips:

“First, if you want to live in a “hot” neighborhood, buy a co-op over a condo (assuming you can qualify). You will get more bang for your buck, because you will not be competing with investors and foreign buyers, who are typically limited to condominiums.

Second, consider neighborhoods that are “up and coming” rather than the ones that you have been priced out of. For example, if you can’t find the perfect home in Park Slope, consider Jackson Heights, where a charming pre-war classic 6 apartment could be less than half of the price.

Third, use RealDirect and get back up to 1 percent on your purchase to offset the sting of the high price.”

And if you are a seller, congratulations! You are selling into a market with limited choices for buyers, so you should see a great return on your investment.

14 Tips To Pass Your Co-op Board Interview

December 12th, 2013

Every NYC buyer must make the decision whether or not they want to live in a condo or co-op. If you want to go with a co-op, then understand that there is a process involved. A big process. With lots of steps. Lots of paperwork. But the last step in the process can sometimes be the most frustrating (and scary!)…The board interview. (cue Jaws theme song)

If you’ve gotten this far though, please remember that it’s a great sign. It means that the board feels your paperwork was sufficient and now they want to get to know you better as a person. So here’s a few tips of the trade that we advise our clients before the big day:

1. Make sure you know the time and location before the day of the interview. Nothing could be worse than showing up at the wrong location or arriving late.

2. Answer only the questions that are given to you. No need to add extraneous information that they have not queried.

3. Smile! Above all, these people will be sharing the elevator, mail room, etc with you — they want to know that you will be a good neighbor.

4. Dress like a job interview. Try to be as “put together” as possible. Nobody wants a messy neighbor.

5. If it comes up, try to express any long term plans to stay in the apartment. Absolutely do not mention anything about wanting to sublet or leaving the apartment vacant for too long. Even if it’s a pied-a-terre, they want to know that you will be using it as a weekend residence as opposed to a hotel.

6. If it pertains to you, talk about your stability of career, family ties, etc. Do NOT mention if you know anyone in the building unless you are sure everyone loves them. (Being friends with the neighbor who takes out his garbage in the nude won’t do you any good.)

7. Do NOT mention anything that would infer you would be coming into/out of the building late at night or hosting parties.

8. Do NOT bring a gift or flowers.

9. Do NOT tell them you are a smoker, and if you are, please do not smoke before the meeting. (although you might want one afterwards!)

10. Try not to ask too many questions. You are the one being interviewed.

11. Don’t be offended if they ask you personal questions. This is par for the course and unfortunately part of the process. Answer these questions with direct responses and try not to elaborate too much.

12. It’s the 21st century, so please realize that the board members will likely google you either before or after the interview, so it’s important to take a quick look at what the public can see on your twitter/FB/instagram accounts. Make sure that whatever you are telling them about your job, living situation, etc matches up with what they can find online. (aka take down any pictures of you hugging a 200-lb pitbull)

13. Board interviews can range from exchanging simple niceties to an all-out inquisition. The best policy is to expect the worst, but hope for the best. That way there are no surprises!

14. Be yourself, be polite and don’t forget to mention how much you love the apartment and want to live in the building!

Best of luck!

O.P.P. – 200 West 79th Street #10N

May 23rd, 2013

Whenever I see a listing description that says “bring your contractor” I immediately get excited. That usually means that the apartment needs a lot of work, and that the home will trade at a discount because of this – and a savvy buyer can get a brand new apartment customized to their taste – and one that has never been lived in.

This particular apartment has nice views and is in a prime location. The building is well amenitized, and has a highly desirable convertible 3BR floor plan. It also has through-wall A/C and large closets. But what makes this unit stand out is that the kitchen layout includes a window, which is highly unusual for the typical convertible 3BR, in which the kitchen is usually on an interior wall with no window.

I could see the next owner opening up this kitchen to the living room and building a 3rd bedroom/home office in the dining area. Add new floors and 2 new bathrooms, and the price of this renovation on top of the asking price is still less than a comparable renovated apartment.

http://www.realdirect.com/listing/2102578/200-W-79th-St-10N-New-York-NY-10024/

O.P.P.

May 21st, 2013

For some of us, the term O.P.P. takes us back to the early ’90s when the Naughty by Nature single was ubiquitous. But here at RealDirect, O.P.P. means “Other People’s Property” i.e. a property that RealDirect is not representing (or representin’, if you you want to keep with the theme.) Every once in a while we see some O.P.P. that is so interesting or compelling, that we highlight it in our team meeting so everyone will know about it and can share with their potential clients. Well, rather than just keeping it to ourselves and our clients, we are starting a new post that highlights these properties and explains why we are “down” with it.

How Do Real Estate Commissions Work?

March 20th, 2013

Here at RealDirect, our goal is to work with our clients in the way that suits them the best. Sometimes that means they use our free services (RealPrice). Other times we work on a monthly fee basis (as in our Owner Managed program). And still other times, we earn a commission Agent Managed and Buyer Service). However, not all commission based real estate brokers are the same, and to best understand our commission structure, you need to understand how the typical brokerage is compensated. Read the rest of this entry »

The RealBargain

March 4th, 2013

We have recently added a new feature to RealDirect search called the RealBargain. This is an algorithm we have devised for finding homes that are priced particularly aggressively. We look for homes that have a total cost per foot that are in the bottom 20th percentile or lower for comparable homes. We exclude homes that are unrenovated, are dark, and have other associated issues. They are then flagged in our Finder so that you can easily spot them.

Keep in mind that these are not necessarily the lowest price homes in a neighborhood. A home may have a very low maintenance, but be priced in line with other homes in the area. But the very low common charge may make it a bargain. And the opposite is true as well – a home that is priced low, but with very high common charges will not qualify. And we only look for bright, renovated apartments because most buyers put “light” as their top must have, and they are typically unwilling to do more than a moderate renovation. Of course, if you are willing to renovate a dark apartment, you will find even lower cost/foot opportunities, but they are not necessarily bargains for the average buyer.

Take a look and let us know if you think this is a useful feature.

Simplify Your NYC Apartment Search with New Buyer Tools

February 28th, 2013

The core of our mission at RealDirect is to utilize technology to simplify the process of buying and selling real estate. With everything we do, we continue to push toward more efficient methods of matching properties with buyers. To this end, we have recently released new features which make it easier for buyers to quickly find the most suitable properties for their needs.

Buyer Survey
One way we’re helping buyers find their new home faster is through integration of our Buyer Survey with property search. Buyers wishing to receive personalized property recommendations can fill out all or part of our 65 point survey which helps define which criteria are most important in a new apartment. Our survey asks buyers questions such as which schools, parks or transit lines they wish to live near, are they willing to do renovations or live in a walk-up, and how important are these criteria. We then take all of the survey respondent’s answers and compile the data into “Must Have,” “Wish-List,” and “Deal Breakers.” This information is compared against available listings in order to recommend the most accurate matches for each buyer.

Tips

The goal of a real estate listing is to make the property seem as appealing as possible in order to get potential buyers through the door. But with the need to give a strong overview of the apartment, little details are often missed. For example, a built in bookcase in the living room, the view from the kitchen window, or a better look at the outdoor space. While the listing may not note that there’s a dry cleaner conveniently located in the lobby, this is the sort of thing that may be a selling point for some buyers. That’s why we’ve created the ability to leave tips on a an apartment or building. Anyone who visits the listing can leave a text and/or photo tip which will be shared with registered RealDirect users searching for properties. Much like Yelp or TripAdvisor, RealDirect brings a candid crowd sourced perspective to real estate.

How Much Should I Bid on a Home?

February 19th, 2013

When we work with buyers and they find a home they love, the first question they ask is “How much should I bid?” Unfortunately the answer is not always easy.  They need to not only figure out what the value of the property is to them, but also a bidding strategy that will get their offer accepted, and not tee the property up for another bidder who will pay a little more.

In order to develop a winning bidding strategy without over-paying, we advise our clients to consider these three points: Read the rest of this entry »

Top NYC Neighborhoods for 2013 Real Estate Investment

February 4th, 2013

Wondering where you should spend your real estate dollar in 2013? We asked our agents to pick out the neighborhoods that they felt were going to be hot in the coming year and got a wide range of answers. While our top picks aren’t necessarily hidden gems or NYC bargain neighborhoods (as if!), they are areas where home buyers are likely to see a strong return on their investment while enjoying a high quality of life. Whether it’s ease of commute, great schools, trendy nightlife, fine dining or open space, there’s something for everyone in our list of top  NYC neighborhoods for 2013 real estate investment. Read the rest of this entry »

225 West 83rd Street – The Bromley

January 4th, 2013

I believe that I live one of the nicest buildings on the Upper West Side – if you want to combine convenience, amenities and lovely views. The Bromley, at 225 West 83rd Street, is one of those postwar buildings that were built to be solid (I cannot hear my neighbors at all) and attractive. The lobby and entrance have a very pleasant art deco feel to them. There is a dry cleaner/valet service on the ground floor. The staff is attentive, friendly and helpful. Repairs are made immediately by an excellent professional maintenance staff. There is a garage and a roof deck.

But the most wonderful thing about the Bromley is The Second Floor:
• fully equipped health club with pool, Jacuzzi, sauna, steam room, yoga studio and basketball half court
• huge and very well equipped children’s play room with kitchen
• large clean and well maintained laundry with lots of machines
• event space that can be rented at very reasonable rates

So if you want to be my neighbor – right now there are 3 units for sale in my building.
2 bedroom 2 bath high floor Apt.15M
Panoramic southern views, lots of closet space, including a walk-in,washer/dryer in the unit. $1,750,000

• 1 bedroom1 bath
Open city west and south views. GORGEOUS SUNSETS! 727 sq ft. Fantastic storage space. New plank wood floors granite counters and kitchen floor and glass cabinets. Will be freshly painted and ready to move-in. $859.000
1 bedroom 1 bath Apt. 8A
Open city view. This is the largest line of the one bedrooms in the building at about 900 sq ft. $950,000