Does anyone know if you are able to get a mortgage these days in a building that isn't 50% sold or under contract already? I heard that lenders won't even consider giving mortgages to anyone trying to buy into a building that is less than 50% under contract. Secondly, it would be interesting to know how the Lenders determine the value of the property in today's market. Usually an appraisal is done and lenders will not allow a mortgage for more than the property appraised for. Does anyone have any real information on how appraisals might be adjusted to meet up with any market decline and/or how lenders might be doing the same when figuring the loan to value ratio?

fannie just changed there requirement from 50 to 70% of units sold or under contract. i'm sure some lenders who wont plan to sell to fannie might make exceptions, of course for a higher rate. in the case of 80 met the 'preferred lender' is willing to lend once project is 25% sold, which it is. as far as appraisal value who knows, it is such a moving target these days, how does one know the value of anything, esp since nothing is selling. i would bet the 'preferred lender' would provide an appraisal that would fit getting the deal done

does anyone know how many unsold units there ares in the pipeline in wmburg? I believe it's huge, given the planned towers, which should simply swamp the market and force all prices down significantly, to discount below whatever the lowest thing is in manhattan.

I just flipped through 80 metro and The Mill on N 3rd St. The discounts are nothing. This whole market in wmburg is nuts -- who would buy at anything other than a huge discount at this time? why are these units not marked down by some huge amount? I dont get it.

I think a lot of proposed projects will never be completed, but it does seem like there will be a flood of new units in wmburg, manhattan and other areas. Northside piers recently had a drastic price reduction of 20-40% but it looked to me like the prices came down from a level that was never reasonable to one that some may have considered reasonable in '07-'08.
I have no idea why these developers arent lowering prices, i agree it seems nuts. maybe they think if they hold tight the economy will turn around, but right now it just looks like a standoff, no one buying at these prices and developers not dropping them. And as per the NY times, a lot of people are walking away from deposits because previously agreed upon prices make no sense in this market and you would still probably come out ahead leaving 10-20% on the table.
I also suspect that although they don't publish lower prices, if you walked in as a qualified buyer they may accept lower offers.

jimstreeteasy,

I'm a bit too lazy to calculate the actual number of unsold units in Williamsburg, but maybe we can all collaborate on this to get at a legit number. I think there's a fair amount of exaggeration on this. Just to set some guidelines, let's keep it west of the BQE, for projects where construction is more or less 50% done as well as units that are actually being offered if it's still early in the construction phase. Anyone should feel free to correct if they're sure they have a better number.

1 Northside Piers = ~60 units left
2 Northside Piers = 270 (don't think anything's in contract)
The Edge = ~475 units left (tough to know exactly, given limited info)
125 N10th = ~45 units left
72 Berry = 20
20 Bayard = 21
Warehouse 11 = ~80 left
80 Met = ~70 left
Ikon = ~12 left
101 N5th = ~25 left
Rialto = ~17 left
129 Met = ~10 left
nforth = ~10 left
111 Kent = ~60
14 Hope = 23
Aurora = 4
Aqua = 4
North 8 = 3
Sevenberry = 5
Mill Building = 3
218 N8th = 3
136 Met = 9
349 Met = 21 (though this building is in trouble I think)

I know I'm missing a bunch, so please add. So far, total of 1250, about what I expected, with the vast majority on Kent.

I still can't figure out why people look to Kent Ave for WB housing - it's going to be years before it stops being dreary and then (if the developers' visions are realized) it's going to overcrowded and unbearable!

that should read between bedford and kent....it's just too many people on top of one another

ctrl....look at it like this, it is never going to be anywhere near as crowded as 3/4 of manhattan....and it is very unlikely to stay empty long bec/ of the profit motive; as buidings fill up then lots of service businesses etc will obviously move in.....It's silly for people to talk about a several hundred unit area that is a short walk from lots of stuff and will generate lots more stuff once occcupied as dreary...The place may not be a good choice, but pick a logical reason

i think that once all those things happen, and you've got thousands of new people in that fairly small area, plus businesses drawing in customers from other parts of north brooklyn, it's gonna be a LOT like manhattan! and that's going to be a shame.

(said by someone who lives in williamsburg and likes it just fine the way it is)

"have no idea why these developers arent lowering prices, "

You have to realize that by lower the prices, the develops would be remarking their properties at lower mark to markets that would cause large losses, or even bankruptcy, as equity falls below debt values.

They have no choice but to continue the illusion of the artificially high (above any market) price as long as their lenders will allow them to carry their positions.

Then, they are either bailed out by a miracle turn around, or they are forced to take the loss in 6 months to a year time when their lender is forced to foreclose.

The lender will then sell the units at a price that will allow them to quickly (six months) clear the loan, realizing as much residual cash for what turned out to be a bad loan, as possible. Its called a work out, and all the banks who lent to developers who are unable to sell out are in the same position.

The prices will then clear where reasonable, unlevered buyers will buy the properties such that the cost is comparable to renting. Unfortunately for the banks, this is 50% below the typical price on these units.

Considering all thats going on today, I'm reading a lot of wishful thinking here. What about realism, weighing the pros and cons of any situation. Housing in WillyB is dead in the water as bjw2103 partially illustrated. Are any of you taking into consideration what Case Shiller aka the RE bible had to say about pricing, units sold and occupancy? Its a sad thing when we buy into what a billionaire has to say they don't relate to us thousandaires.

Thanks BJW for the estimate. Well, that seems like a lot to me, and perhaps you've missed some also. I see the point about developers hesitating to face reality because it means admitting the project is bankrupt.But at some point the banks and developers will have to face reality because of carrying cost of unsold units, and then we will see the crash.

I like Wmburg and if prices fall by huge amounts I would consider living there rather than Manhattan which I prefer for convenience reasons. I don't agree with crtl that Wmburn will end up just like Manhattan because the lower density in general, many low rise buildings, the water with no highway along it, means you don't have so much traffic noise as manhattan and also you have less of an echo-chamber effect of air processers in endless numbers of buildings running 24/7.

ctrlaltdel,

I think it's really tough to project exactly what's going to happen with the waterfront. I don't think it'll end up like Manhattan; it's a bit too small of an area for that kind of feeling to truly permeate, and jimstreeteasy lists some of the key factors there as well. And there are very few areas in Manhattan that are right on the waterfront and truly residential. I do love the neighborhood as is, but I trust that things will be managed well enough so that the changes don't "ruin" it.

As for pricing, budda is pretty dead on. It's a bit of a guessing game when that will happen, and each project will have a different timeline. The other point, which I've made a few times here, is that developers will get very creative with other forms of concessions first. Some of them work, some of them won't, but it's something buyers can use to their advantage and have been able to for some time now. I wouldn't be afraid to ask for a ton of stuff in addition to a lower price at this point.

mutombo,

Please. You post this junk all the time. "Realism" does not mean that everyone has to agree with your take.

jimstreeteasy,

I think I covered most of it, though I know of at least one small building on the southside I left out. I think 1500 is a fair high estimate overall. It's a lot, but not nearly as much as some of the crazy numbers I've seen thrown out there so casually (7000?!)

To those who are anxious about being under contract now:

My wife and I have been looking for a pied-a-terre in Williamsburg on and off for 3 years. 1 year ago we decided not to buy a condo and invested our funds in the stock market instead of saving for a 20% down payment. So now, we're 50% down on our investment. So we're (kind of) kicking ourselves for not buying a condo and having a hard asset instead of losing it in the market. And now we are interested in getting a condo again! You feel like your losing one way and we feel like we're losing another way.

LookPied,

If you had put 20% down on a condo, you would be wiped out, your equity gone amd probably even negative. Down 50% is much better as you still have half..

Yeah,
But we'd have a place to stay!

Obviously, I'd be kicking myself harder in your case LookPied, cause as you say, at least you'd have a place to stay, hopefully for the long run. However I'm still very worried about what to do, especially if the developer won't negotiate something reasonable.. I wonder if closings will be happening next months and who will.

N77 If you have signed a contract, email newbrooklyn1@gmail.com and join the discussions.

Any update on scheduled closings (I remember it mentioned as 4/09). Good luck to those who signed and are negotiating the contracts.

Closings are supposed to start in late May now.

anyone have an update on 80 met. my fiance has a contract signed and we have heard from this forum for a few weeks. thanks!

No TCO yet, closings possibly starting in july for lower three floors, see above post and join the google group we set up

nice bldg overall

If I was in contract here I'd give the sales office some serious shit about their newest ad. They've been running large pictures in the subway tunnel connecting 6th and 7th Aves at 14th St (obvs trying to appeal to the L train crowd) for ever. They've always been glossy renderings of the zen garden, the bridge view, the exterior, etc., and now they finally show a real photo and it's a small, non-descript living room with a view of a brick wall. You can see the AC in the window across the street. Seriously, I shake my head every time I walk past these things.

Anyone visit the model unit that recently opened? Curious to see if anyone can corroborate tenemental's experience. Would be a real shame - this looked like a really solid building.

I've seen the model about 2 months ago. It's not at all like tenemental is decribing. I think it looked like the rendering and that's a positive thing. His experience is based on a photo and not the actual apartment. Sounds like he means a view of a brick wall... that is across the street.

Yes, I'm talking about the photo they're using in the ads, and through the LR window you can see the brick wall across the street. I'm sure there are units with bigger living rooms and better views, and I would hope the kitchens and baths look good in a new building, which is why I can't believe they're running such an unflattering shot. Just very sloppy work by the sales office. The units may look incredible up close, I have no idea, but after looking at those shimmering renderings for over a year the reveal was a big step down. I'm not kidding, if I was invested there, I'd call the sales office. They are not doing well by the building with this huge photo that thousands of people walk by every day.

I think the model is on the first floor, thus a poor view probably no matter where you live. But point taken on crappy marketing, this has been par for the course. I think these guys are just not used to having to really sell. There is no clear marketing strategy. They are still expecting a sudden and magical turn in supply and demmand, and a huge line of buyers once the bldg is completed.

this building is only 40% in contract. and no bank will lend to any new developments under 70% presale. and bankers now only doing 75% financing.. so people who signed the contract are totally stuck!!

i totally feel same way with N77- wellfargo now backed out from the deal.... asking me 75% financing even though i signed my contract with 90%. i'm talking to my lawyer to look into our contract to find out the way out of this. it has been a disaster.

what's going to happen now? I thought it was the nicest of the new construction -- had my eye on it, glad I didn't commit.

Was 80 Met simply overpriced - are massive price reductions in order?

Just because 80 Met may be one of the nicer buildings in the area, doesn't mean it is immune to the overall economic crisis. With the exception of a few developments, most sales in buildings in Williamsburg and in Manahattan have been stagnant - 80 Met is not unique. If you plan to purchase now, I'm fairly certain you will be able to negotiate a reduction.

LD,

80 Met was immensely overpriced. Price reductions don't have to be in order but will take place by order, dictation and naturally :o).

Will the developer go under before they can break even? Are people with contracts bailing? They were supposed to start closing this month. Have they had any closings?

LD,

The developers of 80 Met may go under if they don't break even as with any new development during these turbulent financial times. I have heard some people with contracts have bailed out of 80 Met but it was only one hand full if that. I don't know if 80 Met had any closing this month or recently but someone on this board will be able to add clarifiaction to that.

I'm a contract holder at 80 Met. A group of us had a conversation with Steiner, the developer. They informed us that they have a very good relationship with Wells Fargo and are in a decent position financially to weather the storm out a bit (of course what else would they communicate). Also, keep in mind this is Steiner's only residential developement and so they are not trying to keep other project afloat. As for closing dates, still unknown as the temporary certificate of occupancy remains outstanding. Mutombonyc: How did you learn about the people who backed out? That's not very encouraging.

BillyRes,

I don't mean to discourage anyone but heard less than five people backed out I don't remember where I read that information but remembered hearing some people backed out it could have been another development but feel certain it was 80 Met.

I think now in retrospect all new construction seems over priced, I'm not sure 80 met is that out of proportion to other properties. Clearly no one is buying anything at these prices and in these market conditions and something must give. Whether they will lower prices, go partial rental, be able to hold on for a while, or go bankrupt because the lender will not let them lower prices to meet demand remains to be seen. They play it very close to the vest and keep a smile on their face as if everything is fine.
As for people walking from contracts, I have not heard that. I can't imagine why it would make sense to declare that now. I'm sure many people will walk if there are not concessions made, but closings haven't started so that remains to be seen.

Anyone have any updates on this development

Closings are scheduled to begin in the next couple of weeks.

Are they giving concessions to those willing to close. It looks like most contracts r at around 800$per sq ft, will people close at that price? Can people get a mortgage for this kind of property with <<50% in contract?

Fact: Prices have been negotiated. Fact: Closings have taken place Fact: 2 years common charges and two years tax have been paid by Steiner to get a signed contract Fact: Steiner has also agreed to pay ALL closing costs except for the buyers attorney.

All above is fact. Steiner WILL negotiate. They do not have a choice. A recent mortgage survey taken less than two weeks ago had 80 Met reporting less than 40 contracts signed. They have been exaggerating the amount of apartments in contract to get deals done.

The building is well built. The quality (on my opinion) is better than any other development in Williamsburg. Steiner did an A+++ job on building this project but he needs to close like evry other developer in NYC. This building is not an isolated case. It's happening everywhere. If you have not closed, negotiate your price or other perks as stated above. As for a parking spot or roof cabana. Threaten to walk or not close. They need you!!

By claiming everything as fact without any evidence or indication on how you obtained this information, you lose creditability.

What type of survey was conducted to determine less than 40 contracts were signed? Was the survey distributed to developers to report how many contracts were signed? Why would Steiner report anything less on the "survey" than what they are communicating to the public? Or was the survey distributed to the world and only 40 people responded to say they were in contract?

I agree that 80 Met is a great development. I could argue it is one of the best in Williamsburg. If you're interested in the building, then have a conversation with Halstead or Steiner. But manage your expectations. If you expect all the concessions listed by "informed" then you will be setting yourself up for disappointment or bitterness.

Informed, can you share the source of your facts, that seems contrary to what this and most other developers have been willing to do

Don't shoot the messenger. I am just trying to help out some people that may/could be in a bind. believe me, don't believe me. both are fine. Here are the answers to the above questions. I am answering tham as thorough as possible without divulging my source. I am only writing to lend a hand. No harm done...just advise that you may or may not use. Here goes:
A mortgage broker asked the sales office to fill out a questionnaire. All mortgage brokers/banks ask certain questions about a building as part of their due diligence to see whether or not a bank will lead money for a mortgage. One of the questions was 'How many units are currently in contract?". The representative for 80 Met that was complying with the mortgage broker and answered a number that was under 40.
Also, I already know of someone who has closed (there have been a few already) This particular buyer was given 7% off the marketed asking price as well as free common charges and real estate taxes for the next 24 months. These buyers paid for their attorney but all other closing costs were picked up by the developer. I never said everyone could get this but there is nothing wrong with asking. This developer needs the sales and needs contracts signed…as do all new developments that are less than 50% sold. Most buildings that are under 50% sold will/are finding it almost impossible for their buyers to get financing. Most banks will not take the risk. No bank will take a risk if a building is less than 25% sold and closings have started (unless someone puts down 40%-50%)

Since most new developments (not all but definitely a majority) are struggling to get things in contract, they have given great concessions to people who actually ASK and negotiate for them. No developer will GIVE it to you.
650 Sixth Avenue in Manhattan on 20th Street in Manhattan (this is another example) may seem over priced when you look at what is offered and what they are asking in price. A closing took place within the last 4-5 months where a unit was listed at @ $1.75 million and closed for under $1.35M.
The point being, do not take anything for face value. Do not be afraid to ask for the proverbial "mile" as you may end up getting more than the "inch" you expected. You may just get that mile.
Good luck to all.

informed, that's helpful stuff; I can understand why others might be skeptical, but you're totally right that it doesn't hurt to ask. The building looks great; I really like the entrance - just the right balance of looks and low-keyness that fits the neighborhood well.

The reason why some are skeptical is because:
Fact: contract holders are asking steiner for concessions and threatening to walk and have been told to f... off

rivas, no concessions at all? And are they really that off-putting in their response (I don't imagine they're literally telling you to f off, but curious as to how they're handling this)? I find that a bit hard to believe in this market.

Maybe things will change when they are nose to nose at the negotiating table, I have asked and been told no.

i feel new buyers may, maybe, get some concessions, probably for the most expensive units, that doesn't seem to be the case for contract holders.

It appears there is one sale recorded. This was one of the lowest priced units in the bldg at <$700/sf.

3F closed at $385,000. ORIGINAL asking price: $415,000 That's a "hair" over 7% off the original asking price. See my comments regarding an apartment closing for 7% off asking in one of my previous posts. They also received incentives>>>>>>>>>>> 2 years of cc's and taxes paid as well as all closing costs except the attorney fee for buyer.

So they discounted about 5% from contracted price, they're probably going to have to do a lot better than that to get others to close, and even more to get contracts signed on the 60 apts left. Even if they close all the outstanding contracts which would seem quite unlikely the bldg will still be <50% sold.

rivas, still, that seems to run counter to what you were saying before. Frankly, it's in the best interest of the building to do what they can to get to at least 50% sold.

I had not heard of any discount being offered. It is something, but my point was it is not enough. Yes clearly it is in their best interest to get to 50% sold. But I think to get most of those contracts closed they are going to have to offer more than 5% off. No?

rivas, I would think so. It'll be interesting to see where the next few closings end up.

Yes, further I want to see what becomes of the bulk of the signed contracts, if the majority of them close (assuming with some price concessions) that would suggest to me that steiner is realistically accepting of the current market conditions and would bode well for the success of the bldg. If a good number of contracts do not close I would think either they are greedy or in a highly leveraged position where they can't negotiate too much, and I would question the future of 80 met

so now, people moved into this building??

Yes, a few people have.

http://curbed.com/archives/2009/10/26/curbed_inside_williamsburgs_80_met_comes_out_to_play.php

Pictures of completed bldg on curbed
place looks amazing
not sure its worth 800-1000psf
but it looks gorgeous
views look great and seem to be protected to north and probably to south if the domino compound doesnt get built
outdoor common space and pool also look great

I really like the building. I am a little bit worried about the walk from the L at night. Finishes in the units are great (probably the best in Billyburg along with 125 N 10th and the Edge).

Common charges are a little on the high side, particularly since I would only use the gym.

That being said, definitely not worth current asking prices.

125 n 10th has 80 met beat in terms of location
but i think the quality seems better at 80 met
The edge looks nice as well, to me its just a little bit of a turn-off to live in such a massive metroplex,

it also seems that 125n10th is being a little more realistic in terms of offering price discounts

If you want to be closer to the L and the Park then 125 N. 10th is your place. If you want to be strategically positioned between North and South Williamsburg, near Grand Street, and the water, 80 Met is your place. I'm somewhat biased but I feel 80 Met's overall quality is superior to most of the new construction in Williamsburg. One simply needs to visit the building to get a sense of the quality of the construction - very solid, corners were not cut. All other buildings went up in less than a year compromising the quality. There is a reason it is taking almost 2 years to complete this development. Biggest negatives - high common charges, high cost per square foot, low sales.

i think the problem is the high common charges. Prices will have to be more flexible eventually (hopefully), but cc will stay high and in WB i feel amenities aren't that much of a priority.

I just took a rental at 220 N 8. Great location but the roof is already leaking. Been looking at 80 met and 125 N 10th - 80 met still tops for finishes I think, and I have no use for the pool and the expense that will keep climbing as it ages.

oopes 229 N 8th -- actually that's the name of the building but the address is 63 Roebling. Go figure.

lofty, i'm with you on the pool. even if i wanted to do laps, it's kinda small.

Apt 1-O closed. Asking: $895,000. Closed: $915,000. A parking spot was included in the sale. The apartment also has a 504 square foot private garden.
2M has closed. Last asking price: $799,000 Closed: $841,559. The sale included a parking spot and a roof cabana. Parking spots started at $40,000 and were raised to $50,000 by March or April 2008. Cabana's were @ $25,000.
Also, records will not indicate if any closing costs were picked up by the sponsor or if common charges and taxes were paid by sponsor for any period of time after closing.
3F closed at $385,000 original ask was $415,000. ALL closing costs (except for the buyers attorney) were paid for by the sposor as well as 2 years of common charges and taxes. This I KNOW is a fact.

I believe 80 Met is definately the best development. Well contructed, well thought out in regards to noise issues, materials used and finishes.

"informed" the price you quote on rooftop cabanas is off 3-6 fold.
I do however agree with some of your points, but not of your support of current pricing.