Cooperative Village sales

I've lived in co-op village for 13 years. To somehow imply that those who bought at the regulated prices will undercut everyone is dead wrong. I have never witnessed somehting like that occur. Also, the board will not let you sell cheaply. There was a guy on UD the other day who posted that the board bought the shares in the apt. he was under contract to buy for 30% off comps.

as far as the future of co-op village, you got me there. I would imagine that sale volume will remain low because the board will reject sales that are too "cheap." Also, unlike other co-ops, owners can rent their apts. for as long as they want to. There is no 2 year limit. So this might help to reduce inventory.

Excluding the boom years when you admitted to renting in New Jersey in another thread, right Alpine?

and per SE, there are currently 8 listings in Seward Park that are under contract. Most are 1 bedrooms.

The boards of Coop Village have bought units there pretty much since the beginning (which is "interesting" since they sold them for $75,000 after going private). But there's a limit to how many they can hang onto and if they can't resell them, they are going to have some problems at some point (apartment rental income is certainly "bad income" 80/20 wise).

One unit I track frequently is D607 at 417 Grand, mainly because I used to know the owner. They are actually the reason you can now close off your terrace there as they actually closed it off when it was illegal. They took a lot of shit for it... The board sued them and revoked their parking spot and gym mebership. They basically made their lives a living hell.

Well, I don't know if it was at 417 grand, but at one point one of the Coops revoked everyone's parking spot (unintentionally). Sounds like classic Levandusky stuff, though.

your referring to the garage collapse?

Another sign of proactive management

I was the guy referred to by alpine292 who posted on Urban Digs. Just to be clear - our offer was 30% below original listing price (Sept. 2008). It was not 30% below comps! The fact is that there are no recent comps at all. The board is doing the same thing the Fed and Treasury are trying to do by artificially inflating apartment values - it can't do that forever. Meanwhile, the coop reserves are being utilized to protect prices - I am not sure if that is what most shareholders are interested in (e.g., maintenance has to go up if you burn through reserves). Price protection is a strategy that ultimately has to fail. Meanwhile, the board has wasted my families time and money while trying to make this deal happen.

30yrs, I'm seeing 6 closings, including that marriage split. There's also a recently ended listing claiming Sold that likely hasn't made it through the ACRIS system yet. There were another 7 so far this year that were pulled w/ no sale and no relisting. Maybe in previous years more of them would have sold?

"Also, unlike other co-ops, owners can rent their apts. for as long as they want to."

I think that's changed since you left and the new board officers were instated. Also, the rental tax has become egregious. Depending on which source is correct, it's now either 150% or 200% of maintenance. Imagine having a 1br apt that costs you between $1125 and $1350 to rent out each month - not including your mortgage - and only being able to get something in the low $2000s. There's also been talk of an increase in the already high flip-tax, which is based on sale price, not just profit.

http://www.thelodownny.com/leslog/2009/04/high-anxiety-coop-fee-angst.html

http://www.trulia.com/voices/Market_Conditions/Shareholder_sublet_fees_in_a_Manhattan_cooperative-90367

"and per SE, there are currently 8 listings in Seward Park that are under contract. Most are 1 bedrooms."

There are now 9, but there are 25 active listings, some of which have been there a very long time, and that doesn't include FSBOs in the Times and Craigslist, and the competition from similar, cheaper (though more poorly located) buildings down the block.

2brs are back in the (sometimes low-) $500s in East River, Hillman and Amalgamated. A couple are below $500k. Prices are also down in Seward Park, with almost all 2brs in the $600s, a couple coming very close to the $600k psychological barrier and a low-floor true 1br asking $365k.

I don't know if we'll have flight en masse, but it will be interesting to see how the different complexes manage the demands of different generations of owners and deal with their current fiscal crises. The expanding "hipification" of the LES has helped them (not that it reached them in a major way), but as that line recedes during the economic downturn, so will demand. Certainly the expectation of further gentrification is paused in the current climate. At the very least, I see prices with a lot further to fall.

In response to vmathew and the idea of the co-op holding on to units, check out this quote from Seward Park's treasurer:

"The co-op owns 12 units, which could bring in between $4.5 and $8 million. The board will be looking at the possibility of converting these units into cash. But if they continue to appreciate in value they may be the best investment we can have."

Except that they're currently depreciating.

http://www.loho10002.com/wordpress/?p=699

BTW, alpine, D607 at 417 Grand has been trying to sell for 2 years and is down to an ask of $669k from $849k, with further to go, IMO. It passed through 4 brokerages that I can see, with Weichert claiming it was a short sale.

Bump, since I just saw 30yrs around. Any add'l thoughts?

"2brs are back in the (sometimes low-) $500s in East River, Hillman and Amalgamated. A couple are below $500k. Prices are also down in Seward Park, with almost all 2brs in the $600s, a couple coming very close to the $600k psychological barrier and a low-floor true 1br asking $365k."

Amalgamated is a drastically inferior building to Seward. It's an old dump. And East River is very far from the subway and requires a bus ride to get to it.

"BTW, alpine, D607 at 417 Grand has been trying to sell for 2 years and is down to an ask of $669k from $849k, with further to go, IMO. It passed through 4 brokerages that I can see, with Weichert claiming it was a short sale."

Do you have a link to where it says its a short sale? The reaosn I'm interested in this apt. is because I used to know the sellers very well. THey bought before the de-regualtion for about $10,000. So for the apt. to be a short sale is truly shocking, as there is no reason that apt. should have a mortgage on it of even $1.

I think the Boards are trying to do the same at our Fed Govt: smoke and mirrors to make it look like everything is ok, back more like playing Nero fiddling while Rome burns. As you said, they own units which are depreciating, what are they going to do, keep guying? And how long can volume to continue to be less than half of what it's been for the past few years without people needing to sell at lower prices. I think they are going to end up owning the most units [possible at a time when they are worth the least.

Although, knowing the history of how things have gone to insiders, it would surprise me if one day the woke up, decided prices were down and used their "business judgment" to sell of a bunch of units for some ridiculously low number to raise cash (to some insiders without trying to sell those same units at a higher number to "outsiders".

never mind, I found the Weichert link where it says it's a short sale. The apt. has a gazillion listings so its hard to keep track. Right now, the place is listed with LoHo. Just curious, can anyone find out what the mortgage on D607 is?

"Amalgamated is a drastically inferior building to Seward. It's an old dump. And East River is very far from the subway and requires a bus ride to get to it."

That may be so about Amalgamated (though the same price drops are happening in Hillman) and I agree about East River (but for the some people the river views no doubt help balance the value to some degree), but my point is simply that prices are dropping in all of them. The 2brs in Hillman, Amalgamated and East River are now well under $600/sf, and in Seward under $700, in some cases very close to $600.

Here's the Weichert listing that mentions "short sale." It's entirely possible that the broker lied to make it look like more of a deal:

http://www.weichertmazzeo.com/BrokerWebsite3/Weichert/sales_list_.asp?listingid=609926

"This is a Short Sale that is Bank Approved so dont miss the opportunity to purchase below replacement cost."

"Anxious owner says SELL NOW! Will listen to all reasonable offers."

The Weichert listing leaves out the "D" and only refers to apt 607, but it's obvious when you compare the photos in the current D607 listing (no mistaking those floors):

http://www.lohorealty.com/cgi-bin/Go.cgi?q_webID=s11428&x_action=search&x=0&y=0

"And how long can volume to continue to be less than half of what it's been for the past few years without people needing to sell at lower prices."

And this is killing the co-op when it comes to income from flip taxes.

"Although, knowing the history of how things have gone to insiders, it would surprise me if one day the woke up, decided prices were down and used their "business judgment" to sell of a bunch of units for some ridiculously low number to raise cash (to some insiders without trying to sell those same units at a higher number to "outsiders"."

30yrs, just confirming: it would or wouldn't surprise you? Judging by your sentiment I'm wondering if this is a late-night typo.

Also, any thought on the new board vs. the old? The new board seems to have quite a situation on their hands, running a deficit with older owners who want anything but a maintenance increase, and newer ones with more money who understand the seriousness of things.

alpres, hadn't seen your post on the Weichert listing before I finished typing...

You are correct: a typo. Don't know much about the "new board" except they don't see to be much different from the old board (which was both stupid and corrupt) simply from their stupid actions. They need to "get with it" pretty soon. one of the "problems" is that you've got thousands of reasonably low income people (who else was going to buy in there under old Mitchell -Lama?) who even modest increases are tough for. now, you've got people who paid a lot for their units, and........... since they are up to their necks (face it - most people who bought in there recently did it because they couldn't afford anything else in Manhattan) who even modest increases are tough for... ;).

My recently departed (his unveiling was last Monday) partner of 17 years was on the board at Amalgamated and I think those who down play it overlook 2 things: in all the other buildings, you've got thousands of unit which look exactly alike, whereas the Amalgamated units are at least a little different (not within Amalgamated, but from the others) and everywhere else in Manhattan there tends to be a premium on prewar and it's the only prewar in Coop Village.

30yrs, very sorry to hear about your partner. My condolences.

"now, you've got people who paid a lot for their units, and........... since they are up to their necks (face it - most people who bought in there recently did it because they couldn't afford anything else in Manhattan) who even modest increases are tough for... ;)"

Interesting point. The treasurer talks about the recent buyers as if they're well-off, and I'm sure they seem that way relative to original purchasers, but considering the dramatic differences in mortgages carried, they may not be much better equipped to handle increased expenses.

Regarding the newer purchasers' difficulty with increased expenses, they also have the impact of selling costs on [potentially] underwater numbers ... the same 6% brokers' fees as most other people, but also the flip tax, which I believe is a percentage of sale price. Original purchasers, of course, have a much higher flip tax, but it's on a price that's many multiples of what was originally paid.

Also, 30yrs, I want to add my heartfelt condolences re: your boyfriend's passing. It must be unimaginably difficult after being together for 17 years.

Perhaps I'm wrong, but I just don't see too many people thinking of Coop Village at market rates as their "first choice". Everyone who I've seen go there (aside from those who were there already and moving within) were people who started out wanting something else (especially East Village) and couldn't afford it, so they got convinced Coop Village was the place to go because it was within their budgets. i mean really, except for the "community" (which I think only the old timers think of as a community), what's the attraction? not great transportation, poor shopping (and terrible supermarkets) uninteresting architecture...... so what do you have? Kosars? (which isn't that great anymore anyway).

"and terrible supermarkets"

I take it that's a thumbs-down on Fine Fair?

You tell me.

http://www.insiderpages.com/b/5967525094

Thanks for the link.

I remember back in the old days before co-op village went private, the baords would hardly ever approve minorities. They basically wanted to keep the place 99% white and Jewish, with one token black, Asian, and Latino. But then they got sued for discrimination and lost. So to price out the minorities, they privatized the complex so that the apts. would be market rate.

the shopping on in co-op village is not that bad. There is a Pathmark right under the Manhattan Bridge. I think it's on Rivington. Plus there is a Whole Foods inside the new Avalon, although I've enver been to it since they opened after I moved out.

""Although, knowing the history of how things have gone to insiders, it would surprise me if one day the woke up, decided prices were down and used their "business judgment" to sell of a bunch of units for some ridiculously low number to raise cash (to some insiders without trying to sell those same units at a higher number to "outsiders"."

That will unlikely happen. I know there is one womon who used to be on the board and she used her influence to get 6 apts. before the de-regulation. That's right, 6! I'm not sure, but I think she may have connected some or even all of them. Then there is a religious Jewish family in Seward at the building directly across the street from teh Emigrant Bank (assuming it's still called that). They have two 2 bedroom apts. and one 1 bedroom apt. I think they are all connected.

can anyone look up the mortgage on D607 to see if it is indeed really a short sale? Quite honestly, I have trouble believing it. I can't even see how they can afford a $700k mortgage. The guy works for the Board of Education and the wife is a stay at home mom. I mean, where the hell would they get the money from to make the payments?

Maybe they sold their house in New Jersey?

If you don't have a car, Whole Foods and Pathmark won't do you much good, they're a haul. There's a small market on Grand at the very end of East Broadway in Hillman territory, and a 2nd Fine Fair further east at Jackson. Assuming Fine Fair's as bad as the reviews say, Co-op Village seems like a Fresh Direct proposition.

I walked to Pathmark hundreds of times. It's not that long of a walk.

no AH, that was a short sale too.

"I walked to Pathmark hundreds of times. It's not that long of a walk."

I don't doubt that you did, and maybe I've been spoiled by having stores nearer to me, but Google maps tells me it's a half-mile walk from Cherry St & Pike Slip to East Broadway & Clinton. That can't be a plus for values in Seward Park.

As for an outstanding mortgage on D607, I can only assume it's HELOC or HELOAN since the original purchase was for peanuts (someone please correct me if I'm wrong). On ACRIS, MORTGAGES & INSTRUMENTS only yields results for the corporation. DEEDS AND OTHER CONVEYANCES shows nothing, I think that's only for condos. OTHER DOCUMENTS shows the price paid in co-op transactions for purposes of RPTT and RETT (that's where the comps come from). It's a very long list at that address. The unit # isn't listed on the main page, you only see it when clicking through DET, but assuming HELOCS and HELOANS are noted here (I could be wrong on that), you could search by name and then click through.

Pathmark has their own private parking garage, so many people who live in co-op village drive there.

Like I said, "If you don't have a car..."

I thought "garages" were inside?

Pathmark has both an indoor parking garage and an outdoor parking lot. The garage is not visible from the front. You have to go around to the back if I recall correctly.

PS If you're holding THAT Pathmark up as the "good quality" to travel to, it only points out how abysmal that crap is that's close (although i haven't been there in many years, so MAYBE it's vastly improved, but I chose to drive all the way up to Fairway on 125th (7.5 miles) rather than that Pathmark (2.7 miles)

Pathmark was recently bought out by A&P, so their stores now are more high end.

I just realized that a lot of people may be reading this discussion, but are unfamiliar with the financial structure and why sales are so important.

The transfer fees/flip taxes are very large (as compared to most other Coops). While they are not the same for all Coops in Coop Village, I believe Seward has a fee of 17.5% OF GROSS SALES PRICE for a "first transfer" (i.e. the owner bought before they went private) and 5% of gross sales price for subsequent transfers. So, lets say the average sale is half a million dollars, and lets also say the number of sales went from 30 a year to 10 a year. That's $10 million in sales and (assuming all first sales just to be dramatic) $1,750,000 a year in decreased revenue. My guess is that is somewhere between 10% and 20% of the $ they collect from maintenance. IF that's a correct guess, it means they have to make up 10% to 20% of the maintenance fees from SOMEWHERE.

But this was even a long term ticking time bomb anyway, because over time, even the very large 5% of gross sales price flip tax on subsequent transfers it less than 1/3 of the 17.5% on initial transfers (although in the short term they lucked out because prices tripled so the bottom line $ would probably be about equal).

But the big issue remains: how much of the Coop can the board buy because they think the prices are too low, and what happens to all those who bought in at "peak" prices and now can't afford their monthly nut with a flip tax 0f 5%. broker's fee, etc? And a ton of people who will resist any maintenance increase because their basis is less than $20,000 with 100% equity and look at the maintenance the may rent stabilized tenant look at their rent (like, any anual increase more than 2% is as if someone is removing their spleen w/o anesthesia).

co-op village's high flip tax is what keeps the maintenance very low. So if the tax was not so high, the maintenance would likely be over $1,000.

"how much of the Coop can the board buy"

That's a good question. I have no clue. I'm surpised the baord has any money considering that they have yet to collect from the insurance company and are still in litigation over the garage collapse. The last I heard, the appellate court ruled against the co-op 2 years ago. I don't know what has happened since then.

Maybe they're using the 20% flip fee they get from the sale as the down payment.

"co-op village's high flip tax is what keeps the maintenance very low. So if the tax was not so high, the maintenance would likely be over $1,000."

ummmmmm....... that's the point of the whole thread: without the flip taxes, the maintenance would have to rise by a large amount.

But how many flip taxes get collected on units which either don't sell or the Coop exercises it's right of first refusal on? (hint: the answer is zero).

But the reason they got away with the huge flip taxes was because the original owner paid a number approaching zero, so the 17.5% sort of a "true flip tax", and up till recently people assumed that when the wanted to sell their apartment would be worth double what they paid. But even in a totally FLAT market (i.e. not going up, but not even going down, much less plummeting), what are buyers going to be thinking about paying a flip tax at 5% of GROSS SALES PRICE, which mean that if they put 20% down and their unit only drops 8%, they are actually under water if they actually wanted to sell.

"That's a good question. I have no clue. I'm surpised the baord has any money considering that they have yet to collect from the insurance company and are still in litigation over the garage collapse. The last I heard, the appellate court ruled against the co-op 2 years ago. I don't know what has happened since then."

I seem to remember something about them acquiring a $20 million LOC? maybe I'm thinking of the wrong building.

East River, where the op was trying to buy actually increased the flip tax for first time sales to 20% recently. What's to stop them from using that 20% they will get from the sale? They must be using the big check they get at closing as a down payment and are counting on a resale or rental income. I can't see how this will help things there.

so? is 325 for a one bedroom in hillman a good price or can it be expected to fall.. dying to get back to nyc but not rich

Prices have bounced back totally on grand street w Seward Park getting a big premium over the other ( coop village ) Coops - some sales have gone over $1M

Any new insight on co-op village from recent buyers/sellers/insiders? Seems like most of these units move pretty quickly and been surprised at listing prices for some in not great condition or that need gut reno.