How to Spot a Good Deal
In a market like this, it can be hard to look at a price tag and know if you’re getting a good deal.
New York Times
by Elizabeth A. Harris
Published June 19, 2009.
Many New York City apartments have had drastic price reductions in the last few months, as sellers chase after a cascading market. But a discount from a hugely inflated figure may not be a bargain.
Rachel Lustbader, a managing director at Warburg Realty, says that even though sellers are aware of the falling market, some still believe that their homes are the exception. “People love their apartments,” she said. “It’s like a child. And how can you believe that your child isn’t as pretty as they were three years ago?”
There are, however, well-priced apartments available. Some owners feel pressure to sell quickly, and set their prices accordingly. Others who bought before the market heated up feel more freedom to accept a lower price.
Sheer numbers, however, do not always communicate the bang for your buck.
Aspiring buyers have to consider whether the apartment has value that will hold up over time, so that even if prices don’t begin rising soon, the purchase will not be a mistake. Diane M. Ramirez, the president of Halstead Property, says buyers have to consider location, amenities, the quality of the building, the floor the apartment is on, and the view that it offers. That will help determine if the price is right. “It’s not focusing so much on ‘is it the cheapest,’ but looking at the quality of the product, too,” Ms. Ramirez said.
When you’re trying to get a sense of apartment price tags, there is no substitute for old-fashioned shoe leather.
“No one’s going to send you an e-mail saying, ‘Oh, by the way, here’s the best deal!’ ” said Jacob Goldman, the president of LoHo Realty. “There are no hard-and-fast rules. You just have to be out there.”
Cara Bloch, 35, a photographer who owns a company called A Home in the Sky that makes gift tags, is looking for a one- or two-bedroom apartment in Manhattan. Earlier this month, she saw three dozen apartments in four days. “You could lose a lot of weight doing this,” she said.
Last week in Manhattan, a search on Trulia.com, an online listing site, showed 4,074 one-bedroom apartments for sale in Manhattan. The New York Times real estate site, at nytimes.com, showed 3,504 available.
The median sale price in the first quarter of this year for a one-bedroom in Manhattan was $580,000 for a co-op and $818,000 for a condominium, according to a market report compiled for Prudential Douglas Elliman by Miller Samuel, an appraisal company. Jonathan Miller, the company’s president, said numbers for the second quarter were not yet available. But, he added, “I can tell you that they’ve slipped a bit.”
In an effort to figure out what a fair price looks like these days, five one-bedroom apartments in five New York City neighborhoods were held up to the magnifying glass.
Lower East Side
A seventh-floor 800-square-foot co-op apartment at 575 Grand Street on the Lower East Side is listed by LoHo Realty for $425,000. The apartment has a small balcony and good light. There is a laundry in the building as well as access to a gym, and the maintenance charges are low, $623 a month, with a $35 monthly fuel surcharge. Although there is a bus stop outside, the subway is a hike.
This being New York City, the owner of this one-bedroom happens to be Gary Shteyngart, the Russian-born author of “The Russian Debutante’s Handbook” (Riverhead, 2002), the winner of both Stephen Crane and Jewish Book Council awards for fiction. He bought the apartment in 2004, and it’s where he wrote much of “Absurdistan” (Random House, 2006). Now, he wants to upgrade to a bigger place in the neighborhood.
“I wanted to price it in a way that seemed reasonable, so the sale wouldn’t take too long,” he said. “I also want to sell it at a point so I don’t lose money over what I paid for it after all the fees and taxes. Maybe it’s the immigrant in me. I just want to come out even.”
This apartment is one of some 1,700 units in the East River Housing Corporation, a four-building complex that was built in the 1950s through the sponsorship of the International Ladies Garment Workers Union.
According to the Web site StreetEasy.com, which compiles listing information, the average price of 15 similar one-bedroom apartments for sale in the complex is $635 per square foot. Mr. Shteyngart, 36, is asking about $530 per square foot. Only two apartments are asking less, and neither has a balcony.
Some apartments in the complex are priced at $150 and even $300 more per square foot than Mr. Shteyngart’s place; a few have been sitting on the market for almost a year.
Data prepared by Miller Samuel shows that in this ZIP code, 10002, the average sales price — not asking price, but what was actually paid — in the first quarter of this year, for a one-bedroom was $569,000, or an average of $711 per square foot.
VERDICT: A DEAL
In 2003, Arlaina Tibensky and her husband, Mark Edgar, bought a one-bedroom apartment on the fifth floor of 17 Chittenden Avenue, a prewar elevator building in Hudson Heights. It’s about 800 square feet, with maintenance charges of $855 per month, plus a $114 monthly assessment. They are asking $379,000, or $471 per square foot.
The apartment has a sunken living room, original details and a view of the George Washington Bridge from the bedroom. But Ms. Tibensky, 36, a writer and a founder of an organization for writers with children called Pen Parentis, and Mr. Edgar, also 36, a chemical engineer, share that bedroom with their 2-year-old son, Adam. And now Ms. Tibensky is six months pregnant.
“Mark and Arlaina are expecting a second one in a one-bedroom,” explained Simone Song, a principal broker at Simone Song Properties, “so they needed to price this competitively.”
Two other one-bedroom apartments are for sale in the building, according to StreetEasy. Both are a bit smaller and both are asking a higher price. “We bought long enough ago,” Ms. Tibensky said. “We can be a little more flexible.”
VERDICT: A DEAL
A one-bedroom apartment in a prewar elevator building at 30 West 90th street is for sale for $645,000. The apartment, a condo, is on the third floor, and there is a live-in superintendent and a laundry room. The common charge and taxes come to $860 per month. The living room is a bit narrow and the kitchen is small, but the apartment feels open and is in a sought-after location, around the corner from Central Park.
Hmm — $645,000 seems like a lot of money, but as the listing agent, Jon Abeles, a senior associate sales agent at the Corcoran Group, points out, a condo near Central Park in a prewar building is a pretty rare combination. Condos tend to sell for higher prices than co-ops because they often allow more financing and offer more freedom on sublets and less oversight on sales.
At 716 square feet, this apartment is priced at about $900 per square foot. Miller Samuel data show that the average sale price for a one-bedroom condominium in this ZIP code, 10024, was $705,000, or an average of $1,000 per square foot, in the first quarter.
A StreetEasy search for comparable one-bedroom condos on the Upper West Side also shows that this apartment is priced competitively. Its owners are asking about $130,000 less than the average for similar places and about $140 less per square foot than the average.
VERDICT: A DEAL
In prime Park Slope, a one-bedroom apartment for less than $400,000 has been rare in recent years and is still difficult to come by. But at Garfield North — a 67-unit building at 195 Garfield Place made up of several joined town houses between Sixth and Seventh Avenues — a one-bedroom is for sale on the second floor for $395,000.
“Anything under $400,000 is considered a value,” said Virginia Hunter of Warren Lewis Realty, which has the listing. At 616 square feet, it has custom closet space and nice light in the living room, although the bedroom is dark. Laundry is in the basement. Maintenance is $716.04 per month.
According to StreetEasy, most other one-bedrooms for sale in Park Slope priced below $400,000 are farther south, which is considered less desirable.
VERDICT: REASONABLE, BUT NO STEAL
UPPER EAST SIDE
Scott Stewart, a senior vice president at Corcoran, is listing a 729-square-foot apartment in a prewar co-op building with a doorman at 205 East 69th street for $665,000. The maintenance is $1,059.38 per month.
The apartment, which has a working fireplace, went on the market for $735,000 in September, and has undergone two price reductions since.
Even with a 10 percent drop, it is not the cheapest one-bedroom apartment on the Upper East Side.
A StreetEasy search shows that the average price per square foot for comparable listings is about $900, slightly less than the $910 of Mr. Stewart’s listing. This figure is from a compilation of asking prices, not a list of actual sales.
Data from Miller Samuel show that the average sale price for a one-bedroom in this ZIP code, 10021, was about $723,865 in the first quarter and that the average price per square foot was $971.
According to Mr. Stewart, the seller is approaching retirement and has left room in the asking price to negotiate.
Mr. Stewart says many sellers are employing similar strategies.
So even if what the owner is asking seems on the dear side, you might be able to get a bargain.
“A lot of sellers are screening themselves with higher prices to protect their bottom line,” Mr. Stewart said.
Placing a bid, he added, is the only way to know if an apartment is in your reach. “Everybody who has their property on the market is motivated to sell.”
VERDICT: DON’T OFFER FULL PRICE