Co-ops Faring Better than Condos?
That does seem to be the case, per New York magazine, whose “Optimism Index” chronicles co-ops’ asking prices, today and yesteryear. “Co-ops’ asking prices are down slightly, too, but the drops are generally a little smaller than among condos. Possible reasons? Co-ops tend to be less leveraged and less liquid. The only marked decrease is…
That does seem to be the case, per New York magazine, whose “Optimism Index” chronicles co-ops’ asking prices, today and yesteryear. “Co-ops’ asking prices are down slightly, too, but the drops are generally a little smaller than among condos. Possible reasons? Co-ops tend to be less leveraged and less liquid. The only marked decrease is in Upper Manhattan, where asking prices fell 6.31 percent.” In fact, they’ve only covered Manhattan co-ops in this piece. Do you think it’s the same story in Brooklyn — dropping, but not as far or fast as condos?
The Optimism Index, Part II [NY Mag]
Photo by Lisanne!
I think, as with all real estate, location plays the largest role here. Newer developments (condos) are by and large in lesser locations (very West, very East, very Industrial, etc). New construction with bells and whistles went for a premium when demand was higher but demand simply falls faster in peripheral areas.
There are fewer sales and little interest. If you really had to sell, you would have to ask 15-25% less than a year ago. Prices have not actually fallen much becasue no one is selling. There are not the distress sales by developers and flippers that are in the condo market.
Meaningless statistics –
There hasnt been a new Co-op in probably 15 years…so you are comparing Co-Op RESALES vs Condo Initial Sales and Resales.
Obviously a developer who has financing and an empty Condo development is going to drop prices to move inventory. Plus turnover is always higher in new developments (even rentals) = more inventory.
You have to compare Condo Resales vs Co-Op Resales to do any sort of meaningful comparison.
Well said crimsonson and Inigo.
The thing people find irritating about condos is the same thing that gives them a step up.
I agree that co-ops have a leg up. Most of the Borough’s older, prestige residential buildings are co-ops. In addition, co-ops screen all buyers to make sure they are people who can afford to carry the costs of the unit and to make sure that they actually plan to live there as opposed to merely buying as an investment. Sublets are usually limited by House Rules but when owners do apply to sublet, the sublettors are likewise screened. Co-ops annoy some because they seem intrusive and even snobbish, but in the end, in a City like NY, that sort of exclusivity can truly protect one’s investment.
This is no surprise.
Co-ops ha always been the steady ship in regards to RE residential investment. But they tend to be more financially demanding compared to condos. 20% down is given. But boards add another layer of financial vetting – income, liquid asset, some even require 6 months of monthly available during review.
And co-ops are older building that has much lower occupancy rate compared to condos – especially new devs.
FYI – I just found out HSBC USA will not give financing to new dev condos.