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Said apartment is listed here:
Please don't tell me someone paid over 800/sf for a one-bedroom and the maintenance is 2.7x the square footage ($2400).
Urban digs mentioned that market pricing for high maintenance is not rationale. In my view, the maintenance for this apt considering high ceilings and views should not be more than 1.75 per sq ft - call it 1600 per month for 900 sq ft. This translates into 10k per yr extra. Ignoring that maintenance tends to increase as a percentage of your current maintenance, discount 10k per yr in annuity at 4 percent. This gives a discount of a min 250k. If you think maintenance will increase at 1 percent per year (accounting for the fact that percentage increase in high maintenance buildings tend to be smaller than low maintenance buildings) discount at 3 percent making a hefty 330k discount. This apt sold for 750k. So effectively $1m adjusting for maintenance using 4 percent discount. Apps 1100 per sq ft. A little rich for this area for a unique apt.
A couple with 3 kids, including a teenage boy and a teenage girl still at home, bought a 1-bedroom with a monthly maintenance of $2400? People make interesting decisions.
This is total insanity.
Hberg -- why r u bringing up a separate post for this new discussion? The OP in the discussion u reference was simply asking for comments on how one may price in a listing w/ abnormal CCs, well above the norm. I was very clear the mkt doesnt operate in a vacuum and for sake of discussion on a chat forum such as this, I simply offered what I heard in the field at seminars from an appraiser and a private lender that was part of the discussion that day.
There have been numerous similar discussions in the past on this topic and Ive been consistent with my response when a target unit is known, that the relevant building trades should show how the open market values the bldg/unit. If I were working for the buyer of this unit 19V, I wouldnt approach a fair market opinion with the idea that monthlies are X higher than nearby bldgs or what someone deems as "the norm", and have to be adjusted. There is no way to quantify it, every situation is diff/unique, and outside of talking about it on a forum, I wouldnt touch this in the real world.
Rather, I would look at what the open market bid for a relevant unit in bldg to try to advise a client bidding on the target unit, and go from there.. say 10V that 'appears' to be the same config, same line, same exposures, that sold for $609k and signed in March, 9mos later than 10V signed. 9 floors higher, 1yr time adj + any reno adjustments between these 2 units and you have an idea how the open market likely would value 19V
floor -- 9floors x $12.5k -- lets be conservative with 9 floor diff = 112,500 premium for views/light
1yr time adj -- se condo index shows mkt flat over that time
reno -- i leave to u to tweak
I would advise a client accordingly. Please dont start spreading remarks of how I advise clients that are not substantiated, just because you read too much into 1 response on a chat forum.
nytimes always looks for those complete idiots that only they can make seem to be the smartest of the bunch when buying something rediculously overpriced.
nice try yourself
what I liked, were theories I heard from panel discussions Ive been on with appraisers, lenders, etc.. in the past. Of course the theory has some math in it, but there is no formula on that discussion where a buyer was trying to justify a higher monthly CC of $1k over the norm into a fair market value of $320,000 lower. I tried to explain how this market doesnt work like that, that the market is inefficient and doesnt operate in a vacuum. That there is NO accepted formula on that topic. With that said, I simply offered up two ideas that I heard in the past for that very situation, because an OP on a chat forum was asking people for ideas. I even stated twice that in the OP situations, its the risks and the warning signs of that abnormally higher CC that should be concern #1. You seem to ignore that.
This discussion is simply another confirmation on this, noting a print for a similar type of situation -- and here people are saying I cant believe it. Yet the market trades on and this bid is now known.
You talk now about how I work with clients and me giving out advice that is shamefully wrong for someone seeking professional advice? Please dont do that and spread unsubstantiated remarks like you that -- Im here on the same forum, u disagree thats 1 thing...Ill be here to respond rather than run-n-hide.
I would never apply 'theories' Ive heard on past forums and to which I admit are not accepted in the field to a client of mine in that same field. The building trades should be the best guide in these situations, so hopefully there are sales to look at; relevant ones. And thats the approach. I did an example here and on a quick, first glance it looks like 19v didnt trade so far from where it should given the print for comparable 10v sale. If there are no bldg sales and u go outside and compare to comps with normal CCs, your introducing dozens of variables that can never be quantified on top of the major unknown of how much 1k extra carry equals in discount on price for a bldg that has clear warning signs -- that wouldnt work at all.
"the couple — who met about 20 years ago as students at Arizona State University"
With five of them in this one bedroom, I presume they will each split half a closet, with the youngest maybe living out of a suitcase?
UD your contributions here are too valuable to get bent out of shape over someone whose messages most of us don't expand.
Regarding the search, does this condop have extremely lax standards? How did they go from qualifying for only mid-400's to buying at 752 with huge maintenance?
"With five of them in this one bedroom, I presume they will each split half a closet, with the youngest maybe living out of a suitcase?"
To be fair to them, the bedroom is big enough to be split into two, and if they made that the living room and split the living room into two bedrooms, it wouldn't be too difficult, assuming (and this is a safe assumption with them) that you don't need big open spaces.
I knew a couple who had a similar arrangement (kids got the bedroom--couple slept in the LR) and really, it seemed like absolute hell. No privacy, no feeling of having one's own space to retreat to. I just don't get that--wouldn't it be preferable to live in a less convenient location but have more space? I guess to each his own... (our friends eventually moved to a house in the burbs with a nice big yard and room for all).
And particular hell doing this set-up with *teenagers*, when personal private space is an absolute must. For both teens AND their poor parents.
I figured if they put down 20%, their monthly payment on a 30-yr fixed mortgage plus the maintenance would be about $4,900, pretty close to what they were paying to rent in Harlem.
So they went from 2400 s.f. to 900 s.f. for the same monthly burden, less their downpayment.
Hey, It's location, location, location. And the family (mom, specifically mentioned) wants to be IN Manhattan with the Chrysler building view.
The two younger kids are in H.S., just about ready to move onto college and probably living away? At least, that is what the parents appear to expecting. So, the current setup is temporary for this family. Also, in the time being, the children still at home will be closer to their high schools. The mom gets to enjoy her gourmet cheeses. Certainly, the parents have a right to take care of their own needs after so many years of being parents to 3 kids.
Sure, you can get much more space in the suburbs with house, yard, (and a lot more maintenance), but some people do not mind, in fact, might desire to give up the space for the gratification of living in a vibrant city like NYC, especially in the heart of it - Manhattan.
I do not know what graduating from Arizona State U has anything to do with these parents' decision to "downsize" to be in Manhattan.
If that is derogatory, think of the people who have been successful without even graduating from college. And people who have not succeeded as well in life as would have been expected from a big name university.