Well this weeks TG Dragons game was cancelled because the fields are too wet. Probably not a bad thing since last week was brutal for the Dragons. An 18-7 loss dropping them to 0-2. The good news is that my nephew was MVP of the game going 3-4 with 2 singles and a double. He also displayed an incredible defensive effort in which he snatched a screamining line drive from the air and caught a pop fly on the run.
In the words of his dad, "no shit, he’s really good!" Way to go dude!!
I’ve been out all morning with friends/buyers (some people are just so much fun to hang out with) showing them prospective properties to call home in the $4,000,000 price range. Now those of you who are saying, "WOW, that must buy you an incredible apartment!" Think again. "Incredible" is relative and for every price point, buyers have their specific list of priorities. We saw properties this morning from a 2100sf Prewar co-op for $3.2M to a 2350sf Penthouse in a new development project for $3.75M. I heard things from listing agents like "there is a theme of textured living throughout" and "you can rip out the ceilings to gain 3-4" more height." And of course my buyers biggest concern (and he knows I love ’em), is whether or not his California King bed will fit in the bedroom. Is it hilarious (and a bit disconcerting) or what to think that someone can pay close to $4,000,000 and be concerned that their bedroom is too small?
By national housing standards (hard to talk about a "national" marketplace but will here for sake of comparison), the New York City real estate market is skewed. A harsh reality indeed.
- A 650sf ONE ROOM apartment (they will call it 2 because it has a kitchen the size a the large boxes most of us played with as children) asking $800,000.
- A 1500sf 3BR/2BTH with barely 8 foot ceilings for $2,000,000.
- Or how about the $3.95M fixer upper with 4/5BR’s and 3BTHS where the building common areas are circa 1979.
- Perhaps you would prefer the 5400sf Penthouse with 2000sf of terrace for $16,000,000?
- Or you can have the top three floors of The Pierre Hotel for a cool $70,000,000.
A few times today I actually found myself irritated that we didn’t stumble upon the perfect home for $4,000,000. I need to take a step back sometimes and not be so quick to spend other people’s money, particularly when it’s millions of dollars for a 12′ X 14′ master bedroom…get rid of that bed dude! That’s just insane!
My Point: In Manhattan, the "perfect" home doesn’t exist at $500,000 or $70,000,000. And sometimes I’m still shocked that this is the market in which I live and work. I’m one lucky SOB!!!
The Port Authority Bus Terminal may soon get an incredible face lift. According to Annie Karni of The Sun a Gleaming Office Tower May (soon) Rise Upon a Symbol of Urban Decay.
The Port Authority Bus Terminal, for decades a symbol of urban decay and a hub of crime, drugs, and vagrancy, is moving toward a complete overhaul and could soon be topped with a soaring office tower or two.
With rents in Midtown Manhattan reaching record highs and vacancy rates dipping to new lows, developers are showing a renewed interest in building a 42-story office tower above the bus station and retail hub.
The board of the Port Authority today is expected to approve the resumption of negotiations with two prominent developers for the purchase of the lucrative air rights above the bus terminal on Eighth Avenue.
In July of 1989, I moved to Hell’s Kitchen having never even visited New York City before. My girlfriend at the time picked me up from the dilapidated Port Authority Bus Terminal. I would be lying if I didn’t tell you that the experience of walking through that building and continuing through the streets to 10th Avenue and 51st Street (which I called home for the following 18 months) was scary as hell. Coming from just outside the city of Baltimore (I could literally throw a rock to the city line…and often did), you would think that I would be somewhat immune to "urban decay." Now before everyone from Baltimore goes crazy here, that city has made great strides to clean itself up but I’m here to tell you that it has a loooong way to go. Manhattan on the other hand has improved exponentially in the past 18 years that I have resided here.
When I arrived, the Port Authority Bus Terminal wreaked of urine. Several unfortunate people were curled up on the floors throughout the building, some with the ingenuity to build shelters with boxes and blankets. Prostitutes and drug dealers were plentiful and spilled out of the building on to pre-Disney 42nd Street. It was seedy. For the following 18 months, I kept a P.O. Box at the Port Authority Building (I wasn’t allowed to use the mailbox in the Westie inhabited apartment building I lived in) and checked for mail once a week so that I didn’t have to walk through the place. My first job in Manhattan was at the Silver Bullet Saloon on the 8th Avenue side of the building. I walked in and asked the guy behind the bar if they needed help and he threw an apron at my chest and said "hop behind the bar chief." I quit that job 2 hours later when I witnessed an ambulance refuse to pick up a very sick homeless man on the sidewalk because he had no insurance and another fine gentleman drag a commuter by her purse in a mugging attempt (not sure if he succeeded).
Then Disney moved in, crime dropped, destination restaurants moved in, residential and commercial development skyrocketed and people have felt safe in this neighborhood for more than a decade. So bring on the "Gleaming Office Tower" I say. The wait has been long enough.
I have received this press release twice in the past week and for those readers who are in the market to buy, this may be an opportunity to save a few bucks. Newsday reports on this interesting new mortgage product:
Washington Mutual Inc. has begun offering a new mortgage and home equity line of credit bundled into a single loan that allows customers to reset interest rates or switch between fixed and adjustable rates up to twice a year without having to refinance.
Albeit "interesting," please carefully review any mortgage that you are considering and consult an attorney if you don’t understand the product. Now here’s the press release and WaMu event/offer:
50 New Yorkers in the Home-Buying, Re-Financing or Home Equity Loan Mood will Receive $2,500 for Their First Mortgage Payment
Friday, April 27, 11:00am, 235 West 56th Street – WaMu’s “Hell’s Kitchen” store
WHAT:
Washington Mutual, better known as “WaMu” is giving away $2,500 – essentially a first month’s mortgage payment – to the first 50 customers of new mortgage product who visit the WaMu store at 235 West 56th Street in New York on Friday, April 27.
Using “faux fire” theatrics, the bank will “set fire” to the recipients’ first month mortgage statement and provide them with their first monthly payment (valued at $2,500). The event is free and open to the public.
WHO:
Mike Zarro, Senior Vice President, Home Loans
WaMu bankers
New mortgage customers
WHEN:
Friday, April 27th
11:00 a.m. – arrival
11:30 a.m – mortgage “burning”/mortgage payment giveaway
WHERE:
Washington Mutual – 11 a.m. – 2 p.m.
235 West 56th Street (corner of 56th St. and 8th Ave)
New York City
WHY:
WaMu is “lighting a fire” under the mortgage industry by bringing an exciting new, flexible mortgage product to market. Details of what and how this new product works will be available on Thursday, April 26.
NOTES: “Mortgage burning” parties were celebrated over the years as a homeowner made their last payment…experts recommend you NEVER burn your paperwork even after payoff – if you feel the need for a dramatic moment, burn a COPY!
By the way, Washington Mutual will lend to anyone with a pulse!
Suppose that New York City Co-op Boards and their Directors were subject to random or scheduled "audits" to insure that they maintained a pre-determined set of standards? On Monday I blogged about The New York Times piece on whether or not Co-op Boards will have to disclose a reason for a rejection. There is a great deal of opposition to a bill before the City Council that proposes to require Co-op Boards to give a reason for rejections of proposed applicants.
Now I have to say that my absolute favorite thing about blogging is that I am able to hear from some very intelligent readers who’s propositions are sometimes brilliant and often "outside the box" of those that have been discussed within the industry. Such an instance occurred on Monday when a True Gotham reader opened a dialog of how the co-op market could be held accountable for it’s actions resulting in more transparency in the marketplace. This forward thinking readers comments are worth posting twice:
From TG reader "newbie:" Doug, my thoughts are having a set of ‘standards’ for coop boards and establishing a group (either self-governing or through the city) to ‘audit’ boards and ensure they are meeting these standards. Much in the same way that public companies now have to have their auditors sign off on internal controls.
Such standards could include maintaining sufficient meeting minutes, whether all shareholders are required to have homeowner’s insurance (some boards actually don’t require this!), etc.
The ‘auditors’ wouldn’t necessarily opine about the coop’s management abilities but instead disclose whether coops are meeting these standards.
Kind of like a public health inspector…doesn’t matter what the food is like or how much they charge, but make sure the place is clean.
Of course there would be the cost of maintaining this process but it might be less than legal fees incurred as a result of the proposed law. And if done effectively you’d see the price gap btw condos & coops narrow.
And she goes on to elucidate later:
The idea is to have an objective party doing the evaluation.
The comparison with health inspectors is theoretical, but having worked for a financial regulator and as an auditor (and having witnessed the Enron & Worldcom scandals), I think there is a lot of value an ‘inspector/auditor/ whomever’ could add to the process. After all, you’re talking abt the largest financial investment many people have.
Because coops are companies that are accountable to their shareholders they should be treated as such. And this process would (hopefully!) encourage better management of coop boards and greater transparency within the building and the RE market as a whole.
I wonder if anyone else in the RE industry has considered this idea??
I’m not aware of anyone else in the real estate industry proposing such a solution to the current system but I believe this is an excellent compromise to the current legislation sitting before the City Council.
I’m curious to hear what other TG readers think about this proposition and the likelihood of some "objective" and independent auditing service "policing" Co-op Boards. Newbie suggests that it may bring even more parity to the co-op/condo market and I tend to think she may be on to something here.
Thanks again newbie for intelligent and thought provoking dialog.
An amazing statistic was released yesterday by Citi Habitats, Inc. Christine Haughney of The New York Times reports:
The vacancy rate for rental apartments in nearly every Manhattan neighborhood remained below 1 percent for all of 2006, according to data released yesterday by the rental brokerage firm Citi Habitats Inc. Last year was the first time in the five years that Citi Habitats has been collecting this data that the vacancy rate was below 1 percent throughout the whole year. In the West Village, the vacancy rate shrank as low as 0.49 percent. Prices for studio, one-bedroom and two-bedroom apartments throughout Manhattan jumped by about 9 percent from the previous year, and prices for three-bedroom apartments rose by nearly 14 percent. Citi Habitats surveyed 60,000 units for its report.
Perhaps this is a contributing factor as to why the Manhattan housing market remains buoyed while the rest of the country experiences the worst home sales drop in 18 years (from CNN.com). Check out the the NAR’s Realtor.com which suggests that the drop in prices and activity is mostly weather related. Are you kidding me? It’s true that the weather doesn’t slow down New Yorkers, but is this the first year in 18 years that we have had a bad winter?…I’m puzzled…and tired of all the spin.
TrueGotham is proud to be a sponsor of the inaugural Hamptons Marathon and Half-Marathon. The race will be held on Saturday, September 29, 2007. The course runs through Amagansett, Springs and East Hampton with views of the Atlantic Ocean and Nepeague Bay out to the Long Island Sound. This race is a Boston qualifier with a USATF Certified course.
Post-race festivities will continue at Cyril’s, one of the Hamptons favorite gathering places and the perfect spot for a post-race party.
Be a part of history and run in what promises to be an incredible inaugural event!
Click on the banner above to see more details and register.
I’m thinking probably NOT. Janny Scott of The New York Times reveals that the City Council is co-sponsoring a measure to Push Co-ops to Explain Why You can’t Buy. This legislation has been discussed for years and in front of the Council members for almost 16 months with no vote yet.
Under the bill, a co-op board would have to describe its reasons in detail and reveal the source of any negative information it had used. It would also have to say how many applications it received and rejected in the previous three years. If it failed to turn over the information, or do it on time, it could be fined thousands of dollars.
It’s no secret that I have had some issues in the past with some co-op boards and their antics and just recently had the misfortune of a buyer being granted approval only to have it then rescinded. I want to state that on the whole I think that most Co-op Boards do a fine job of managing the affairs that arise in the course of running a building. Having said that, I and many of my colleagues have been increasingly puzzled by recent Board rejections and having a reason for the rejection would not only serve to prove that no illegal discrimination occurred but it would also help a buyer in determining how to improve their chances of Board approval in the future.
Currently, co-ops — apartment houses whose residents purchase shares in the cooperative corporations that own the buildings — are free to decide who can move into their buildings and are not required to give reasons. Co-op groups say most rejections are based on applicants’ finances. Like any homeowner or landlord, boards cannot legally discriminate on the basis of race, religion, family status and 11 other protected categories; people who suspect that they have been discriminated against can complain to the city’s Commission on Human Rights.
Although two thirds of the City Council is said to be supporting this legislation, others who appreciate the need for some sort of accountability by Co-op Boards aren’t convinced that this bill is the answer.
The bill’s opponents, who include Council Speaker Christine C. Quinn, say federal, state and city laws already prohibit discrimination and offer redress. They say the bill, the Fair and Prompt Co-op Disclosure Law, would let loose a flood of lawsuits, delay co-op sales, discourage residents from serving on co-op boards for fear of liability and impose an administrative burden, especially on smaller co-ops.
“The only one who is going to come out feeling good is the lawyers,” said Marc Luxemburg, president of the co-op and condominium council, which, with the real estate board, recently issued a guide on how to do co-op admissions fairly in response to the threat of legislation. “Anytime you try to give a reason, you’re going to get sued. You say the guy was obnoxious at the meeting, he comes in and says ‘I’m going to sue you.’ Every time you turn somebody down, you’ve got a lawsuit on your hands.”
No doubt that we live in an incredibly litigious society but can someone actually sue if a Board thinks a buyer was "obnoxious" in an interview? I’m not an attorney but that seems a bit frivolous, no?
I don’t have an answer on how to solve the issue of accountability for Co-op Boards, but I do believe that some form of transparency in the process would be helpful. For starters, if a co-op board could provide buyers with a specific and LEGAL list of requirements that would have to be met for approval, greater efficiency would benefit all involved. The current system is terribly flawed and often costs buyers and sellers wasted time and thousands of dollars only to be left out in the cold with no explanation of why perhaps their biggest financial asset is being held hostage by a Co-op Board.
It’s a beautiful sunny Friday in Manhattan and the local real estate market continues to baffle those watching the collapse of so many markets around the country (again…their is NO National housing market). I’m busy presenting marketing strategies to sellers and showing property to buyers so here is what is becoming a regular feature of True Gotham, the Friday Link-O-Rama. Some great stuff here:
New Yorkers, enjoy this gorgeous first Spring-like weekend! The TrueGotham Dragons are playing their second game of the season this Sunday on Ward’s Island…GO DRAGON’S!!!
Thanks to True Gotham reader Micky, here are estimated closing costs for multi-family dwellings in New York:
For The Seller
- Broker: Typically 6%
- Own Attorney: $5,000 and up
- New York City Transfer Tax: 1.425% of entire gross purchase price, if price is $500,000 or under; or 2.625% of entire gross purchase price, if price exceeds $500,000
- New York State Transfer Tax: 4% (.004) of entire gross purchase price
- Payoff Bank Attorney: $500
if Seller has a mortgage
- Miscellaneous: $500
- Transfer security deposits: TBD
- E Tax Filing (ACRIS): $150
- Gains Tax Withholding: 7.7% of gain
Out of State Seller
- Non US Resident (FIRPTA): 10% of price withheld or paid
For The Purchaser
- Own Attorney: $5,000 and up
- Bank Fees:
• Points: 0 – 2%
• Application, credit, appraisal, bank attorney, engineer and miscellaneous: $6,000
- Short-term Interest: One month max (prorated for month of closing)
- Mortgage Tax: 2.175% of entire amount of Mortgage on Loans of $500,000 or under; 2.80% of entire amount of Mortgage on Loans exceeding $500,000
- Real Estate Tax Escrows: 2 to 6 months
- Insurance Escrows: 8 months
- Fee Title Insurance: Approximately $300 per $100,000
- Mortgage Title Insurance: $100 per $100,000
- Miscellaneous Title Charges: $1,000 (recording, etc.)
- Adjustments:
• Rents and Security Deposits: TBD
• Real Estate Taxes: 1 to 6 months
• Insurance: One year
- Creation of Corporation or Limited Liability Company: $2,300
Thanks again Micky for the head’s up. Here are estimated closing costs for New York City Co-ops and Condos.
