Open House Report 5/11/08

mkratter: about 6 months ago

Check out the new developments still underway in cities like Chicago and Toronto.

lincolnramses: about 6 months ago

I visited a couple of open houses on Sunday.

43 W 61st St Apt 15A (Condo, $995K, 1 bd, 1.5 bath): I was the first person to sign in about halfway through the open house. The building is a block away from broadway and super conevient to all the trains. Lobby was nicely done, but had to be escorted up to the apartment. Oddly, did not have to be escorted back to the lobby. The apartment felt narrow and smallerthan its 840 Square feet, with the kitchen rammed right into the living room. It apepared that the owners had redone all of the cabinets and flooring and installed nice marble tops, but did not finish the job and install all new appliances, so the juxtospisition of nice new stuff, with old kinda rundown looking appliances seemd odd. The 1/2 bathroom was nice, but the layout was odd as the bathroom practically opened up into the livin room. The bedroom and bath were nice. From the window in the living room, you could look directly into someone elses apartment about 20 feet away due to the layout of the building. Overall a nice, but too tightly packed together apartment that felt like it was trying too hard to be sold.

Downtown by Stark (15 Broad St): two properties under $1M: Apt 2402 (1p to 3p) and Apt 928 (1p to 3p).
Both were lightly traffiked--I think I was the 3rd or 4th one for each and this was late in the day.
Apt 928 was in great condition, but got no, or little sunlight as it faced 25 Broad. And it seemed like it had been an office space for the brokers in the building for some reason.

Apt 2402 was a pigsty as the owners had not cleaned up prior to the open house. There was water damage in the shower, dirty clothes and even undergarments in the various rooms. it was so cluttered one could not get a sens of the proprtion of the space, which did seem susbatntial. I did not like though the layout as the bedroom was more of a screened room than anything elese, Also the layout obscured the light into the back area of the apartment, so as a whole felt dark.

jordyn: about 6 months ago

I went to four open houses on Sunday. I can really only provide useful feedback on the first one.

71 Nassau, #11D. I showed up near the start of the open house and turned out to be the first person at the first showing. The probably should have waited a week for the first open house: the agent didn't seem to know the unit that well, they didn't yet have a show sheet/floor plan ready, and the agent mentioned that a massive bookshelf-ish unit that dominated one floor of the living space was going to be moved by the following week in order to allow the apartment to feel a bit more spacious. Overall, a fairly nice unit--condo conversion was completed about two years ago and everything is still in excellent shape. The open kitchen runs much of the length of the unit, so this is definitely a place for somoene who cooks/entertains a lot. It is one of a handful of units in the building with a separate tub and shower stall. However, the pricing clearly demonstrates the disconnect with reality discussed above. The last unit to sell in the building (7C on 3/31/08) was 892 square feet (versus 814 for 11B) and sold for $960K after sitting on the market for six months at an initial listing of $990k. 11B is on a higher floor, but probably gets comparable or even less light and has slightly inferior views due to 7Cs positioning on the corner of the building. I don't see any way that 11B is the superior apartment, and the developers seem to agree with me--looking back at original pricing and doing a bit of guesswork it seems that the developer would have sold 7C for $825K and 11B for $765K. The other unit for sale in the building is 3B, which is a smaller (685 sqft) 1BR originally listed at $750K but chopped a couple of months back to $699K. Bottom line, I think 11B is ~$100K overpriced.

After this I made my first venture into Brooklyn. I started off with two units at 199 State. 11C (listed as "PHC") was a fairly large (990 sqft) 1BR with a ~500 sqft roof terrace listed at $899K; 6C is a 1220 sqft 2BR listed at $999K. These are fairly new condos--it looks like initial closings were about a year ago. Everything was still in excellent shape in both apartments, the space was well used, and everything had a feeling of quality. Downsides are what seem to be fairly high carrying costs for Brooklyn (which basically gets you a 24/7 doorman and a common garden) and proximity to the Brooklyn House of Detention. Traffic seemed pretty light. In 11C, I showed up about an hour in and I think I was the second to sign in; one other couple showed up while I was there. At 6C, I was there nearer the start of the open house, but the only visitors so far had been other residents of the building. Since this was literally the first place I've looked at in Brooklyn, I don't have much to say about value or pricing yet, although the last sale in the building of 8B was a 1293 sqft 2BR/2BA for $915K, which leads me to believe both units are probably priced a bit too high at the moment.

Finally, I dropped by BellTel Lofts. This was a fairly poorly run open house, and I ended up waiting nearly an hour to actually see anything. They've started closings and most of the people who have bought so far have moved in, but it sounds like they've only sold about 80/240 units. Scary. Finishes were definitely not up to par with the places I've been seeing in Manhattan; spaces were typically strange and somewhat awkward for a large conversion of a commercial space; but ppsf was definitely lower than I'm used to seeing. I have no idea whether or not it actually represents "value", though, and based on the sales so far I suppose the answer is probably not.

Slee: about 6 months ago

I read about an article about real-estate in London from Bloomberg this morning. They have a term for the people who lower the accepted offer at the last minute.

`Gazunderers' Thrive as Deals Fail in U.K. Home Slump (Update1)
2008-05-13 03:28 (New York)

(Adds today's RICS report in fifth, 10th paragraphs.)

By Svenja O'Donnell
May 13 (Bloomberg) -- Max Andrews accepted an offer for his London apartment last December that was 16 percent less than his asking price, and then made a bid on another home.
Days before Andrews was scheduled to close, the purchasers said they would only buy at an even lower price, now 25 percent below the 285,000 pounds ($547,000) he'd originally wanted. The bid meant Andrews couldn't afford to move, so both deals collapsed.
``Everything fell through, leaving me stuck up the creek without a paddle,'' said Andrews, a 38-year-old art assessor.
``It was awful.''
Andrews joins the ranks of victims of ``gazunderers'':
buyers who pull out of a purchase or slash the agreed-upon price at the last minute. The practice, which real-estate agents and lawyers say has grown in the last year, is a byproduct of the downturn in the British housing market.
Gazunderers feed on pessimism. The property market in London had the most widespread price drops in at least 14 years last month as banks cut back on lending, the Royal Institution Of Chartered Surveyors said today.
Property transactions in England are binding only when buyers and sellers exchange written contracts. Almost three months pass on average after an offer is made and accepted and before the formal exchange, according to government figures.

Playing the Market

That provides plenty of time for individuals as well as real-estate professionals to play the market long after the original deal is agreed to.
For example, Christian Blavier, a sports-massage therapist who supplements his income by buying and selling property, bid 320,000 pounds to purchase a three-bedroom home in London's Hoxton district. The elderly seller accepted. As property prices slumped, he cut the offer by 30,000 pounds. She refused, and he is looking for another property.
``I've just gazundered a 70-year-old lady who is undergoing a hip replacement,'' said Blavier, 39. ``You can't get a scenario to make you feel more guilty. But this is not my hobby. It's what helps me make a living.''
Today's report from the chartered surveyors' group showed that the number of residential property agents and surveyors saying prices fell in London exceeded those reporting gains by
94 percentage points in April. The reading for the country fell to minus 95.1, the least since the series began in 1978.

Less Lending

U.K. mortgage approvals dropped in March to the lowest level in at least nine years as banks cut lending to cope with the credit-market freeze, the Bank of England said on April 29.
The term gazundering is derived from ``gazumping,'' in which a deal is broken by a new buyer offering a higher price.
Gazumping was widespread as recently as a year ago. London home sales, fueled by financial-industry bonuses, have led a tripling of prices nationwide in the past decade.
With 20,000 jobs losses predicted in the capital's financial center in the next two years, according to the Centre for Economic and Business Research, the city may now bear the brunt in the other direction.
``We're seeing an increasing amount of buyers attempting to renegotiate the original agreed purchase price downwards,''
said Ash Oberoi, a partner at Housing & Property Law Partnership Solicitors in London.

High End

Charles Puxley, an associate director at Jackson-Stops & Staff estate agents in London's Chelsea neighborhood, said gazundering is occurring even with the priciest properties.
In one case, he said, a buyer agreed to pay 2.5 million pounds for an apartment in Westminster, the borough that is home to the Houses of Parliament, and then cut the offer to
2.25 million pounds.
Puxley advised the seller to accept: ``Central London buyers aren't stupid. Sentiment is getting slowly worse.''
Bank of England policy maker David Blanchflower, who supports a cut in the bank's main interest rate, said on April
29 that house prices may drop by one-third in the next three years.
``People expect the market to fall further,'' said Peter Rollings, managing director of London estate agents Marsh & Parsons. ``There is a lot of gazundering going on.''
The Firsthomebuyer.co.uk Web site, which according to its home page was set up by ``three young couples buying our first homes,'' urges people to gazunder -- and provides a step-by- step guide on how to do so.
``Gazundering is Good,'' says the site. ``Sellers regularly ask for higher prices, so why shouldn't buyers exploit the market too?'' The site doesn't provide contact information for its owners.
Blavier, who gazundered on the Hoxton property, said he would never have gotten away with the tactic a couple of years ago.
``When I bought my first property in 2005, they would have laughed in my face if I tried,'' he said. ``Now, vendors are beginning to expect it.''

dco: about 6 months ago

What a Joke. Well it looks like it is listed as the same price in 2006 and no one wanted it then either.

buster2056: about 6 months ago

This is amusing

http://www.streeteasy.com/nyc/sale/28695-coop-101-west-12th-street-greenwich-village-manhattan?email=true

dco: about 6 months ago

The spread remains large because Realtors tell sellers what they want to hear in order to get the listing. If someone tells you can get $2M and another realtor says $1.7m who is the uneducated seller going to want to listen to. Then after the unit sits for a month the realtor tells the seller the market has softened and we should lower $300,000. The sellers are being told lies about the state of the market buy their own realtor in order to get the listing. This is causing buyers to be reluctant to lower prices and hence the stale mate. The sooner the Realtors start being honest about listing price the quicker this mess will be over. It's supply and demand. You need to move inventory or risk an even steeper decline in prices's. In the end the Realtors which have the most at stake will end up making things worse.

tenemental: about 6 months ago

Slee, I agree that the spread is puzzling. What's interesting about the properties I was commenting on is that the spread is gone - they're below comps. It's properties like these, and of course many other factors and indicators, that have me comfortable waiting instead of "stepping up." I think we'll be seeing throughout this year who the sellers are that can afford to test the market and who needs/really wants to sell. One thing to keep in mind is that if a seller bought before the run-up, even under worst-case scenario conditions he/she can make a massive profit when they sell. Many (most?) of the big-spread sellers that I see purchased more recently and seem to have a hard time accepting (especially, I would imagine, after factoring in broker's fees and transfer taxes) that they won't be making beaucoup bucks.

Slee: about 6 months ago

Yes, there is a big bid-ask spread. I would like to hear from you guys to see what happens next. Can the sellers stand firm or should the buyer step up?

tenemental: about 6 months ago

realestatejunkie, your comments are mostly consistent with my observations. I have seen some units that aren't moving priced at last year's comps. What's interesting here is these units (including 333 E 14th) are now priced below comps, so the sellers a) need/really want to sell b) are getting realistic. I am curious what people think the specific factors here might be. These aren't super-prime buildings or locations, but they're certainly not marginal, either. Someone is listing his unit at the price he paid in 2005, despite the much higher comp that closed in March 08 (probably in contract pre-Bear meltdown). Someone else is selling a nice-sized unit in good condition at around 800/sf, despite the fact that there are great, open views in 3 directions. I am interested to know if folks here think that post-war co-ops could be headed for a particularly hard hit, or if it's any of the other factors I mentioned.

realestatejunkie: about 6 months ago

My take on the current market is there is a disconnect between the buy and the sell.

Sellers still are basing their prices on last year's heady deals and buyers think properties should sell at a fraction of their listed price.

Condo closings on new construction like those at 15 CPW and less tony addresses, deposits made over a year ago, are skewing recent data and painting a rosier picture then things really are.

What I am hearing from the collective broker bable is that good conditioned properties with good addresses are selling quickly and at prices comporable to last year. Less attractive or conditioned properties are sitting on the market longer and getting low ball offers.

tenemental: about 6 months ago

Thanks West81st, I almost called you by name. You gave me a good laugh. I'm also curious if anyone has an opinion on the pricing/market questions I raised. May have to start another thread...

West81st: about 6 months ago

We were busy stuffing $4 million in cash into a mattress so houser wouldn't find it. ;o)

Seriously, no open houses for me until the weekend after Memorial Day. Too busy.

tenemental: about 6 months ago

Just wanted to put this back on the first page. Did anyone else see an open house yesterday?

I hope this means all the StreetEasy moms were being pampered, and the StreetEasy sons and husbands were too busy preparing meals or escorting them to brunch.

tenemental: about 6 months ago

First off, Happy Mother’s Day to all the StreetEasy moms out there.

Managed to see 4 today before catching the train to Mom’s (don’t worry, she didn’t have to cook. We ordered in some nice Italian). All were at the Vermeer, 77 7th Ave., between 14th and 15th Streets. I knew it wasn’t an ideal location for me, but boy, on Google Maps it sure looks close to Meatpacking (which I enjoy at off-times when the meatheads aren’t there) and the beautiful Chelsea side streets. I should have remembered what the corner of 14th and 7th is like, as I’m there every time the L train conks out and I have to take the bus to the 1 train. Some may love it, but it’s definitely not for me. If you’re looking for a building with any kind of young vibe, this isn’t it. At all.

Anyway, here’s some building info: Doorman, with a lobby that feels like an old hotel, once classy but far behind the times. High security - the brokers are waiting downstairs to escort you up. There’s a large roof deck, which probably has amazing views (21 floors), but I had to rush out and didn’t get to see it. Pet friendly. Laundry room, bike room and garage. Maintenance is a little over $1/sf but includes electric and gas, and is 40% tax deductible. 25% DP required. Bonuses will not be considered as income by the board (sign of the times?), but all loan options are acceptable (kind of an odd combination). They are strict about a 25% debt-to-income ratio.

What made me want to visit, very simply, is the current state of pricing here. Details to come with individual units. StreetEasy shows 11 current listings and 4 in contract. Traffic was very light. I was moving quickly, and saw them one after another, so my details aren’t what they usually are:

Unit 3H. 1BR. $640k. $813 maint. 725 sf. Generous LR and BR, small bathroom, tiny kitchen. Kitchen and bath are old, but livable. Parquet floors are OK but could use some sprucing up. 3rd floor, of course, doesn’t offer a view of anything but the buildings across the street. I didn’t notice any roaring traffic noise off 7th, which I was expecting. Original listing price a little more than 2 months ago was $699k. Here’s the thing, IT’S CURRENTLY ASKING ALMOST EXACTLY WHAT THE SELLER PAID IN 2005. Yes, 2005.

Unit 5K. 1BR. $649k. $845 maint. 700 sf. Very similar floor plan to 3H. This is an estate sale, so condition is about what you’d expect. Wall-to-wall carpet in the BR, though the same parquet floors are supposedly underneath. This was originally listed at $739k, before the 3rd and most recent price chop. The view is a little better here than in 3H, but not much, and the condition is worse.

Unit 9J. 1BR. $649k. $881 maint. 700 sf. Again, very similar floorplan. Another estate sale, in really bad condition. However, this one has an open view to the west. Hello, Standard Hotel! Originally listed at $699k.

Unit 5G. 1BR + dining alcove. $849k. $986 maint. 975 sf. This apt is in the best condition of the bunch, with a nicely renoed kitchen. I don’t remember the bath, and there’s no picture of it. Less than 3 weeks on the market.

The first unit’s broker, from Elliman, has the square footage on her info sheet. The other three units share a Halstead broker, who doesn’t have the square footage listed anywhere but at StreetEasy. Interesting.

So is this a sign of the market, or is the building creating it’s own downward pressure with competition? Is all the new development in Chelsea thinning the demand? Or, is there limited interest in large post-war co-ops these days? Not new and sexy, but not old and classic, either. Things seem to be sitting at 111 3rd Ave, and over at 333 E. 14th, which I reported on a few weeks back, 9D is down $95k to $695, despite the fact that it’s a very nice-sized 1BR (850 sf) in good shape, with open views north, east and south.