Williamsburg vs Soha(South of Harlem)

38 apartments (almost 50% of total) in Soha went to lottery winners. those people spent less htan $300k for a 2br/2bth, they can sell at any moment for that amount and come clean. which means that you can be in negative equity for years to come. on top of that, you are on the hook for paying their maintenance and any special assessment that might come due.

imho renting (not mkt rate, but stabilized from K&R for example) till foreclosures and lottery sellers in the area (harlem) affect prices is the smarter way to go.

sorry, not all the lottery winners got a 2br, but many a 1br and some a studio. my point is that all of them have a much lower price basis than you when the time to sell comes. be very careful about this, one should only get into this type of arrangement if you don't plan to sell for decades to come.

globetrotter, there was a very similar discussion over a year ago: http://www.streeteasy.com/nyc/talk/discussion/2992-central-harlem-or-williamsburg

If you're looking below 125th St on the west side, that's probably going to be a bit pricier, since many people consider that Morningside Heights, and Columbia's presence makes a big difference. I don't really know which will appreciate more - given the NYT article this week about Harlem's real estate bust, it seems like it may come down considerably, but I think too much has happened up there for there not to be some very real appreciation from whatever the bottom may be. It's an evolving neighborhood and it can be exciting or frustrating to be a part of that, depending on your tastes. The same can be said of Williamsburg, and I think there has been and will be considerable pain in some corners and some developments. As a resident though, I love the neighborhood, and really believe it is and will continue to be a great place to live. Some people disagree of course, but I think it comes down to your personal needs and tastes, so make sure you explore as much as possible on your own. Best of luck!

I am aware of he lottery. I applied to two of them .There is usually a catch. Example: you buy a condo at $340000.00 the city puts $140000.00 .You sell the condo 5 years after you bought it. You owed the city 80 % of the $140000.00=$ 112000.OO. You don't owe the city money after 25 years of living in your condo. With the current stuation , you have to plan living in your condo for a long time!

bjw 2103 thanks for the info. In South of Harlem the price for one bedroom is starting at $ 500000 for a one bedroom(2280 FDB). The sales office has been open since September 2008 and they have less than 10 units under contracts.They told me they have more untis under contract. They did not tell me that these units are reserved for the lottery.Seven blocks down, the Livmor's sales office is opening soon. I hope that the competition will lower the price. I hope that the prices will come down 10 to 20 % by March 2010.

Soha? is that a new phrase?
Maybe I was asleep when the RE marketing gurus came up with that one.

Hey I've got one...instead of Soha how about NOAWIN! (North Of Anything Worth Investing In)

falcogold1

They try anything to make a neighborhood trendy.Where do you think is Wii(Worth Investing in) in the coming months with a budget of 400 thousands?

"You owed the city 80 % of the $140000.00=$ 112000."

i've seen that mtg paperwork in acris. you owe it only if you sold it for more than what you paid for it. the idea is to prevent flipping, not getting people stuck if they cannot sell for more than those 2 mtgs (the one the buyer has with the bank plus the one the buyer has with the city).

globetrotter, there's a shortsale in 1 Northside Piers, http://www.streeteasy.com/nyc/sale/418392-condo-4-north-5th-street-williamsburg-brooklyn. According to SE, the buyer closed in June 2008 at $477,990. They probably put 10% down = $430,191 loan. The ask is $399,000. You could probably offer 10% - 20% off of that and the bank would take it. Schaefer Landing has had a few similiar offerings. Likely, more to come in Northside Piers and the rest of Williamsburg. Does it get even lower in 2010? Probably, but if you can get a decent price today on a unit and neighborhood that you like, why wait? Personally, if one could buy into a well-located (northside & waterfront w/ views) building, I'd take Williamsburg versus South of Harlem for price appreciation.

admin

Thank you for the information.I did not know that.Your point make total sense.

hey, i looked further and actually, the covenants are different case by case. not only changing the phase out period of the 2nd mtg, but also income restrictions on the future buyers and ability to pass the 2nd mtg to the future buyer. at the very least i would find out what type does the lottery people have (i found these mtgs on ACRIS under lottery winners, kind of detective work, but worth it) in the building you are buying and in others close by that you will be competing with in case you need to sell.

i know for a fact that the covenants on harlem got tougher as a lot of people flipped (those that won lotteries on the 1998-2004 period were less strict than those that won later overall). as a matter of fact, i went to a presentation on the lottery of soha. half of the people left the room when they explained that the apartments couldn't be flipped right away. they were complaining that many were able to do it just few years before.

globe,
it so depends on you. Are you going to live in this investment? Think about it this way. Crappy neighborhood that made the highest leaps will fall the most. Staying inside Manhattan, I would investigate the East Village, the Lower Eastside, Chinatown, Alphabet City and, FiDi. Once you leave the island the area to investigate is vast. I was also a little harsh on Harlem. If you have a good eye and you are patient, great deals will befall the careful north Manhattan investor with a long time horizon.

anyway, for me the bigger caveat of buying mkt rate where lotteries were used is the fact that only the mkt rates pay maintenance (in soha that's the case, don't know if this happens across the board). would that mean that medium to long term you get stuck with double maintenance than comparable units in buildings with no lotteries? if that's the case, mkt rates should be compensated by that extra carrying cost with a lower price.

i'm not sure whether there's a fund (from the city, for example) to cover that maintenance that's waived for the lottery winners. anybody knows?

Hi Admin,

We're likely purchasing an affordable unit at the beacon towers located at w.138th and 5th. They was a lottery last year but not many ppl bought, and we may purchase one soon. We will have to pay maintenance, as do all of the apts as far as I know. That sounds ridiculous for lottery winners - not paying maintenance. Although its a great deal for those not paying.

With regards to the restrictions on flipping, the rules vary considerably. It depends if the building is subsidized by HDC, HPD, or both. For Beacon you cannot make any $$ in the first 5 years. Years 5 - 15 you can get 50% of the profit. Years 15 - 25 you pay the remainder of the HPD mortgage which was 65K and reduced 1/25th each year.

Also Beacon raised their income restriction to 250% of median income, its at 195K for all affordable units. If you sell or sublet, those people are also subject to the income restrictions.

And just to add, we plan on staying there very long term.

"Also Beacon raised their income restriction to 250% of median income, its at 195K for all affordable units. If you sell or sublet, those people are also subject to the income restrictions. "

that makes sense, the pool of people with legit income below the original limits with enough cash reserves was getting smaller and smaller. the lottery winners in soha do pay maintenance but it's mostly symbolic as it's less than 10% what the mkt rate buyers pay and is not subject to increases nor assessments.

about williamsburg for globetrotter: your timing will determine whether you make the most of a great opportunity (buy in 2 years the earliest imho) or ended up being a bagholder (if you do it now).

http://therealdeal.com/newyork/articles/more-foreclosures-likely-as-williamsburg-inventory-grows-aptsandlofts-com-david-maundrell-jonathan-miller

"The inventory of new apartments in Williamsburg could double next year, which industry experts say puts more building foreclosures on the horizon.

An estimated 2,818 new apartments will have entered the Williamsburg market by the end of this year, according to data compiled by residential brokerage firm Aptsandlofts.com. Next year, 2,766 apartments are expected to come to market, the company data says.

Prior to the economy tanking last September, such figures would have been viewed as evidence of a healthy North Brooklyn real estate market. Now, they are met with trepidation.

"It used to be enjoyable, exciting to open a new building. Now it's nerve wracking," said David Maundrell, president of Aptsandlofts.com.

He said the biggest hurdle to selling a new project is obtaining mortgages, particularly since Fannie Mae started requiring in March that a building be 70 percent sold before it will guarantee mortgages in a building. Next month Freddie Mac is expected to implement the policy, which is intended to reduce the amount of risk the government-controlled finance companies take on.

"The pace of activity [in Williamsburg] is well off from last year," said Jonathan Miller, president of appraisal firm Miller Samuel. "Not because of lack of demand, but because buyers are having a very difficult time getting financing for projects that aren't 70 to 75 percent sold already."

Miller and Maundrell concurred that some projects will not make it before being foreclosed on.

Already this year, banks have moved to foreclose on several buildings in Williamsburg.

Factory Lofts at 66 North 1st Street had at least five units in contract, and the Metropolitan at 349 Metropolitan had at least one closed sale, when their lender Chinatrust Bank filed for foreclosure in January.

In February, Capital One began foreclosure proceedings against the condominium Warehouse 11 at 214 North 11th Street. Maundrell said deposits were returned to more than 30 buyers.

In March, Wachovia Bank began foreclosure proceedings on 53 Hope Street, a six-story factory that Massachusetts-based developer Boulder Capital had planned to convert into 92 loft condominiums. Boulder, which did not return requests for comment, had only commenced interior demolition on the building.

Rising inventory coupled with the slow pace of sales has dragged down absorption rates, the rate at which a building is expected to sell or rent, Miller said.

"If a project is selling much slower than what was budgeted, it just all depends on the staying power of the developer and the bank behind them," he said. "It's project by project, but it's not good."

According to Aptsandlofts.com’s data, there are also 782 apartments on hold in Williamsburg, most marked by the now ubiquitous empty lot."

bjw - columbia's presence is in Morningside Heights. It's called "Heights" because there's a honking big cliff just east of it (the lovely Morningside Park.) Harlem below 125 St is down below, on the flat.

what about williamsburg real lofts? will they hold value because they're more "unique?"

hey, why didn't my comment update the thread???

just asking...