Why is this priced so low?

Bad layout - have to walk through the living room and dining room to get to the master bedroom. Also really claustrophobic kitchen

Someone's taking a bath.
https://streeteasy.com/sale/1123290

Compared to what they could have gotten a couple of years ago.

Has the market really fallen by 1m in 4 years?

Guess it is a “bidding war” strategy.

How far has Park Ave co-op fallen in one year? Then adjust for views: https://streeteasy.com/sale/1306826
10% and 500K respectively seems reasonable.

Something more seems amiss here. There have been a lot of units put on and taken off the market, including 7D that took a 500K price drop only to be pulled from the market (although perhaps wanted to avoid summer doldrums).

The other D line apartments posted definitely spent money changing the layout to improve flow and useage. 4D did not , and seems to be anticipating reactions to that

The other D line apartments posted definitely spent money changing the layout to improve flow and useage. 4D did not , and seems to be anticipating reactions to that

The other D line apartments posted definitely spent money changing the layout to improve flow and useage. 4D did not , and seems to be anticipating reactions to that

The other D line apartments posted definitely spent money changing the layout to improve flow and useage. 4D did not , and seems to be anticipating reactions to that

The issues here are max 50% financing, location in the 80s (practically Westchester), and absolutely no view - the neighboring building on 83rd St is only a few feet away.

FWIW the 70s/80's have a lot of the premier private schools in the city - which is why a real classic six, well laid out, would have a lot of appeal.

While this area is a little out of favor right now (guessing high downpayment and stuffiness being a big reason), I think schools choices both private and public can’t be beat vs downtown.

> 300 MERCER - seriously ? Tell that to all the Tribeca people who send their kids uptown to school once they’re out of the one good elementary school down there

And if you ever want to see the appeal of the upper east side private schools (even to those on the upper west side) just be at the crosstown bus stop on east 66th street at 3:30 on a weekday - as all the private school kids go back home through the park.

No kids - so all just second hand impressions - but what exactly are the really good schools downtown - and we can’t include Stuyvesant - very hard to get into . Grace Church school - but again where are the middle and high schooles?

No kids - so all just second hand impressions - but what exactly are the really good schools downtown - and we can’t include Stuyvesant - very hard to get into . Grace Church school - but again where are the middle and high schooles?

No kids - so all just second hand impressions - but what exactly are the really good schools downtown - and we can’t include Stuyvesant - very hard to get into . Grace Church school - but again where are the middle and high schools?

@300Mercer - Agree re bidding war strategy; this should move.
@PH41 - I think you and 300Mercer are in agreement re schools. I took it as his point that schools in Carnegie Hill, both public and private, make this apartment at this price a no-brainer for a family with school-age children.

>mcr - misread mercer’s Comment - yes - the schools are uptown

I am precisely in this demographic of school aged kids in private, the sort of quiet person who would probably be approved by a coop board easily if I didn't have kids. But there's no way I'd live in a stuffy coop. The au pair / nanny apartment with separate entrance would be awesome. But all the rest of the drama involved with coops isn't even worth asking about, particularly in an undesirable area like Park in the 80s. All the blue-hairs are going to go crazy, but older millennials just don't see the appeal, and coops aren't exactly falling all over themselves to convert to condos and double the value of their homes.

Mcr, Thanks for clarifying.

George, Very good insight.

While coop to condo conversion is not likely to happen due to process involved and potential real estate tax implication, coops can easily become more condo like by reducing high downpayment / liquidity requirements and making it transparent to buyers. However, it will take a long time for older people on the board’s to realize that.

If we can't include Stuyvesant in the "Downtown" set, because it's hard to get into, does that mean when we think about the Uptown set we don't think about some of the upper-tier privates, because they're hard to get into too? My quick thoughts of friends and friends of friends Downtown gives me NEST+M, Regis, Lab, ICE.. and I'm sure there are more. Yes, all hard to get into, but so is Brearley.

^^ Sorry, I meant Xavier not Regis.

Do not forget “Friends”, “Avenues”, “UN School” and “Leman” down town. The choices continue to improve. However, their college placement statistics are just not the same as some of top uptown private schools.

Public k-5 downtown is highly dependent on the area you live in. Financial district and battery park has improved tremendously. My take on public k-5 is “no public housing” zoned for school = likely a good school as parents education level has a huge impact on the children’s learning.

This listing is PS6 I believe. So top notch. So, this apt is very good deal even 20 percent higher for someone with 1-2 kids, who can qualify for the silly financial requirements of the coop. If the prices in this area continue at this level, even I will leave downtown and move to a stuffy coop.

It has 76 saves in 2 days, so maybe it will indeed go quick. But if it doesn't generate a helluva bidding war (like 24 Commerce which sold for $1M over ask last year), it will be a signal for everyone else on the UES who is pricing similar units in the $2-3M range that they need a big price chop. G-d bless realistic sellers.

By the way, this board is starting to sound like Urban Baby. The problem with buying in PS6 or really any public school district is that De Blasio could easily change the rules and suddenly your kids are being bused an hour away. The Dems seem enamored with busing again, although not for their own kids, of course. It might be less risky to buy in an area with bad schools and stay on the private track. For example, you could live in the Village and send the kids through 8th at C&C, and by 9th they're old enough to take the subway on their own.

I can see it selling for more than $2mm as the apartment looks move in condition with cosmetic updates even though not recently renovated.

Not to add to the UB feel of this thread, but a school like C&C has probably 5-8 'real' (unconnected, non-sib) seats to parcel out each application season. That's a guess based on my experience applying to competitive downtown private schools. There's a reason these schools can charge $50K for lower school, and I suspect they could charge much more and still have a very competitive process.

And lol to 300 - I was thinking the same thing. I'll be watching the UES pricing dynamics - everyone has their price and dc (to belabor the UB comparison) will be old enough to commute to our downtown private.

Haha. One of things to keep in mind that some of schools may open branches little further down or move down altogether like Collegiate on 59th and Westend. UES side west of Lex is also suffering from Hudson Yards (UWS continues to do much better) and increases desirability around 2nd ave due to Q train.

IF the view adjustment to the 14th floor were $500k it would seem to indicate the market had already fallen almost 30% a year ago. I guess we'll see how much above ask this actually trades at. Any guesses?

I think as young money continues to shift downtown and Brooklyn private schools will add branches or move.

I think this apartment is a tough sell. Unless I'm reading SE incorrectly, it looks like 7D failed to sell while asking 2.2mm, and it looks to me that it was in better shape and with some improvements to the floorplan to allow for someone with children (by making that second bedroom truly closed off from the living room).

People are writing in this thread about the benefits of the schools on the UES, but this apartment isn't currently in a great state for someone who has children, and given the amount of inventory on the market, who would want to buy in coop and have to do work on it?

30 year, I remain surprised that these schools don't add capacity. They are seemingly impervious to market demands. It may be that they are drawing families from the hot real estate areas, but the capital dollars needed to expand in these same areas are a heavy lift, and existing families don't like the disruption. And there's a tendency to want to close the gates once the community is in place, damn the public mission that begets their tax-exempt status.

Jas, I couldn’t agree with you more about tendency to close the doors and not expand without regard to the public mission. Some of these schools have enough endowments to spend on expansion. BTW, it is no different from top 10-20 private colleges either.

As a Cornell alumnus I don't think they are underachieving in terms of expansion.

I also think that at this price, this unit might suffer from Groucho Marx syndrome.

Cornell is doing great by expanding to NYC.

There is an old joke about Cornell's motto which is the quote from Ezra Cornell:
"I would found an institution where any person can find instruction in any study."
When asked about how he was going to deal with the hoards of people who would want to attend as a result, his response was allegedly "Wait till they see where I put it."

30: Great point about Cornell! (And wonderful quote, which you think I would have heard given the amount of time I spent there...but now I really digress...)

There's also NYU's expansion overseas. But not sure either institution added coveted undergraduate seats.

could be bidding war strategy, but also could be the result of cannot take abuse from coop board/management any more

The flow is optimal...

... for a couple. It is not set up for children

is it because most architects have no children and no family value?

So if the concept was that it was priced so low that it would spark an immediate bidding war what does this say about the market?

There is another element that may be a contributing factor.
The city is crushing older buildings with local law facade work.
Im betting there is a fairly large assessment coming for this building (many buildings) as we exit cycle 8 and enter cycle 9.

"and coops aren't exactly falling all over themselves to convert to condos and double the value of their homes."

Its not that easy, I think there is a double taxation issue as you convert, otherwise Im sure at least half of co-ops would convert.

truthskr10, what double taxation?

capital gains when dissolving the corporation, though primary residents might be able to 1031 exchange it, probably not pied a terres and secondary owners.
also the building (and every individual unit) has to pay off their mortgages (and create new ones) at the same time.
Need a super majority vote.

Its a lot of moving parts.

double taxation was a poor descriptor, immediate taxation of current value more apropos.

In the 1990s there was big talk about buildings converting from Coop to Condo but I only remember one building in Manhattan actually doing it.

truthskr10,
You mean 121 Tax Exchange?

No 30y I mean a 1031 exchange. I’ve done 2 with commercial properties. You carry forward gains you made on a property by transferring it to the purchase of a new like kind property within a specific time frame. You have to identify the property you are transferring to within 45 days. I forget the actual time you have to close within, I think 6 months. Your deferring the tax you pay on the gain until your final sale of a property that you don’t do an exchange with.
If you bought your property for $1mm and sold it for $2mm you have a gain of $1mm. You identify another property (you can list up to 3 potential properties) within 45 days that you may intend to purchase for say $1.9mm. If successful in purchasing , your paying tax that year on $100k worth of gain. Your deferring taxes on the $900 k balance of gains to when you sell this new property. You can’t do it with residential homes but co-ops are a different animal and may be allowed, I’m not sure.

No 30y I mean a 1031 exchange. I’ve done 2 with commercial properties. You carry forward gains you made on a property by transferring it to the purchase of a new like kind property within a specific time frame. You have to identify the property you are transferring to within 45 days. I forget the actual time you have to close within, I think 6 months. Your deferring the tax you pay on the gain until your final sale of a property that you don’t do an exchange with.
If you bought your property for $1mm and sold it for $2mm you have a gain of $1mm. You identify another property (you can list up to 3 potential properties) within 45 days that you may intend to purchase for say $1.9mm. If successful in purchasing , your paying tax that year on $100k worth of gain. Your deferring taxes on the $900 k balance of gains to when you sell this new property. You can’t do it with residential homes but co-ops are a different animal and may be allowed, I’m not sure.

1031 exchanges are only for investment properties.

So become a condop. Streamline the application process, allow more financing, allow unlimited subletting after living there a year or two, reject people only for clearly stated & valid reasons...

Which brings us back: if coops are so great, why is the market willing to pay $1m more for a comparable condo?

Coops are great in theory but not in practice. Unfortunately that was the only mutli-family ownership vehicle available at the time much of (previously prime) Manhattan was developed, and that real estate has been continuously occupied since, with the cost of conversion being too high for some residents to bear if they want to continue living in the apartment and long-time residents affirmatively wanting to keep things as restrictive as they seem.

I was looking at feasibility of conversion for our building and concluded it is a nonstarter because the bulk of the residents in our building are happy with the way things are and never plan to sell. Most of the apartments in our building turn over on an estate sale, but that will change in the next X years because the new generation that has been coming in after the estate sales is very different than the seriouly old-monied set that is aging in place. I suspect many coops have the battle of the newguard vs. the old guard, and it is only a matter of time before they all change. In the interim, I can absolutely understand why anyone who needs flexibility would avoid them if they can find an alternative. The fact that this apartment is languishing at this price and George's reaction to it says it all.

multicityresident, looks like it will take about 20~30 years until most of those old farts are gone

https://blogs.lawyers.com/attorney/income-tax/using-your-new-york-co-op-in-a-1031-exchange-46455/

Btw a search on this building in DOB yields it has been marked “unsafe” in the last cycle inspection. Of course bringing this building to “safe” status could cost anywhere from $50k to a couple million.

@truthskr10 - Good catch on the "unsafe" status. That suggests bigger issues with board. Our board pays careful attention to FISP report and makes sure to immediately remedy anything such report identifies; I cannot fathom how the board of this building let that happen. With that said, however, I don't think that issue is what is keeping this apartment from selling. I am shocked at how little due diligence many buyers do prior to buying, and I cannot imagine that most prospective buyers are aware enough (or have diligent enough attorneys) to pick this up. Nevertheless, that may explain the discount. I would think that anybody buying into this building would have fairly deep pockets and be able to absorb the assessment(s) that will be necessary to bring the building back into compliance. The problem remains that people who have the requisite finances are opting for alternatives to old guard coops.

MultcityRez- That's not entirely fair. Unsafe can be a whole host of things and not necessarily a board issue or fault.
My building is over 100 years old. The previous FISP report came back SWARMP. We remedied everything that was identified.
Five years later (now), the next FISP came back unsafe. There was no way to know brick # X would develop a crack, or the 3rd floor rear of the building would have spalling concrete, etc.

And each cycle will get more and more intrusive and detailed. I believe cycle 9 will require deeper probes.
If there are statistics around for such a thing I'd bet the number of buildings marked unsafe is more than double cycle 7. Just look around the city, there are scaffold sheds on every block.

Personally I think its a conspiracy between govt and builders to bankrupt the older buildings into selling to developers. The new buildings are just glass, no facade to really worry about. (insert half facetious emoji here :))

Ive had numerous dealings with engineers throughout my life, they're like criminal defense lawyers. While your wondering how much its going to cost they're wondering, how much can I squeeze out.

But yes I would agree, particularly the floorplan is pretty pad.
The fact is park ave apartments have been the same for at least the last 20 years. They are dated buildings and layouts, and above average maintenance per sq ft. This would then lead to a lower selling price. The people who end up buying these apts are usually "perceived value purchasers" and forget this when they go to sell.
Now sellers do sometimes succeed in getting away with above average maintenance in a robust market with low inventory, but we are not in that market right now.

To clarify the process for the FISP report.
An engineer inspects the building.
Anything that engineer finds during initial inspection goes in the FISP report.
3 options 1)SAFE 2)SWARMP (safe with a maint and repair program) 3) UNSAFE
At the same time your board is reviewing the FISP report your engineer has already submitted to DOB and your building is marked as one of the three options.
There is no grace period.
There is nothing for a board to have done wrong.

Technically when marked unsafe, you have 90 days to cure. That is usually impossible. You at the very least need to install a scaffold shed in front of the building.

George,
A condop is NOT a coop with condo rules, which from your post it seems like what you meant.

truthskr10,
NB from the article you linked to:
"As we’ve covered previously, Section 1031 allows you and other taxpayers to defer recognition of capital gains when (real) property held for investment or business purposes is exchanged for other property of a like-kind. "

I agree with mcr that often buyer's/attorney's due diligence is lacking but a) I think as the market changes from frenzied to calm that also changes. In a frenzied market attorneys get tired of doing rigorous due diligence, presenting their clients an accurate risk assessment, and having them say "I don't care, I have to buy this" so they stop bothering. As buyer's choices open up so does their willingness to listen to their expert's risk assessments. We have already noticed buyer's attorneys pushing harder in contract negotiatons than they had been a couple of years ago, and b) with Boards sanitizing minutes, having entire meetings "off the record", instructing managing agents not to reveal various aspects of the Coop/Condo I think it is becoming harder to do due diligence.

Note this is another reason why I think prices have to further adjust because in the frenzied market prices didn't get adjusted downwards for many defects. When people have time to consider their decisions these do get factored in and most properties have some defect (anywhere from extremely minor to one's which require a price adjustment to those which make the property too high risk for almost anyone).

@truthskr10: Agree re conspiracy. We are putting up the scaffolding and remedying something within the cure period to avoid "unsafe" marking. It is highway robbery. Scaffolding cost (mobilization) is upwards of $60,000 to for loose brick repairs that will cost $30,000. Looking to see what else it makes sense to do while we have the scaffolding up.

Supposedly if you laid all the sidewalk bridging in NYC end to end it would reach all the way to Baltimore.

Floor plan seems quite awkward.

Re scaffolding - seems to be a global phenomenon. Just visited another city, much older than NY, and was dismayed to find that the old city is now just a maze of scaffolding and cranes. Scaffolding for all the old buildings and cranes for the new buildings being put up where they just gave up on the old building and started over.

I noticed London Terrace just put up a scaffold shed on 23rd. Thats a whole avenue of shed! They did major facade renovation 10 years ago and their facade looks perfect. It has become insane.

Multicityrez, if you have "required work" your building is technically already considered "unsafe." The fact is "unsafe" doesnt really mean what it used to as buildings are getting flagged for every little thing.
Now putting up the scaffold shed means "you've protected pedestrians from the facade" until its repaired. After the 90 day period, the city can fine you $1k each month. But they probably wont, however the city will really come down on you if you bleed into the next calendar year.
Take solace in that your building is not alone.

A big issue now is everyone in the industry is overrun. Engineers and contractors who do this work are overbooked with projects, and terracotta suppliers (if your building is ornate) dont have inventory as well. Its becoming a real S show.

30yrs, yes I saw that, and the more articles I read the more confusing it gets.
Habitat mag (luv this mag) says primary residents do not have to pay on the conversion;

"Under the law, the conversion of co-op units to condo units is treated as a sale, subject to capital gains tax. But residential owners who use their unit as their primary residence are not required to pay a capital gains tax on their condo unit. Owners who either use their units as a secondary residence or rent them out do have to pay taxes on any value gain, as does the condo association itself, says attorney Warren Gleicher, a partner at Olshan Frome Wolosky, who advises clients on the tax impact of conversions."

Now Im having trouble with how this is worded as "are not required to pay a capital gains tax on their condo unit." Is the definition of "condo unit" in this sentence the co-op unit that has been converted to a condo unit?

And then what happens to the co-op corporation now converting to a condo association that owns the common areas (and possibly commercial space), it looks like you'll have to pay capital gains on that.

It looks quite messy. It almost would seem easier to get the whole building to cash out, agree to sell to a developer and converting the building to condos.

https://www.habitatmag.com/Publication-Content/Bricks-Bucks/Condo-Conversions

wow we've really gone off thread topic. very old school streeteasy, I like :)

To 30's point, I have buyers purchasing in a building downtown where the last available minutes are from 2009.

ali r.

^ Yikes!

truthskr10,
That's interesting re:London Terrace because the Towers are different ownership (Coop) than the Gardens (rental).

This is all very depressing.

Cheer up, it gets worse!

It is in contract in 29 days.

But at what number?

We both wouldn’t know for a couple of months as least unless nicesmile knows. Perhaps he bought it.

Based solely on what nicesmile posted you would think it might be their optimal move.

And what I mean by that is dependent on what the actual number is it could be a 30% - 40% drop off "peak" pricing.

If we assume it sold at asking price, how much off peak do you think this represents, considering that this was never truly prime (lack of view, in the 80s not 60s or 70s)?

I would say prime as far as location is concerned. But people have different definitions of prime. Let us see where it actually traded. It would be a very nice deal for a buyer if traded at ask.

not me :)

I agree with 300_mercer. Looking forward to ACRIS recorded sale price.

Back on the market with price increase of $375K . If this was the result of price protection by the board, totally not cool.

I would say that not only is it likely based on this, but also that odds are the strategy didn't result in a price substantially above the asking price. I wonder if there is an indication of what the floor is and if the market will bear it (or if the eventual buyer and seller will agree to a phantom contract at a higher than actual price).

Perhaps that also explains why so many other listings were pulled.

Crazy stuffy Park Ave coop boards!! In our small coop downtown with many wealthy residents , we have never turned down an applicant who could put down 20-25 percent and has some liquidity to pay for 1 year of expenses.

I feel terrible for both buyer and seller.

Regarding "price protection by board" - does anyone know if there are instances (either first hand knowledge, or at least plausible scenarios based on fundamentals) where the motivating factor for price protection isn't actually the board as a standalone entity, but the provider of an underlying mortgage (or the board in tandem with the underlying mortgagee)?

In other words, with normal market fluctuations, I assume there's no plausible scenario, but could some buildings have situations where the board members are decent people who collectively are fine with a reasonable sale, but might be forced by impacts on the underlying mortgage (either triggering clauses or ongoing interest service) to do the totally not cool thing and block a potential sale?

Coop mortgage should not affected by fluctuations in the value of the overall building as long as payments are being made and there is not imminent need to refinance. To the extent that there was an imminent need to refinance such that board was trying to project an artificial valuation of the building, still not cool and no honest underwriter would go along with that. Banks are not stupid, and there should be underwriting controls in place to check shenanigans of individual loan officers (unless banks are securitizing coop loans?)

To be clear, this is not "price protection by board" , but a dirty trick many listing agents always play. If they cannot sell a property or contract fail through, they will raise the price to lure immature buyers and lie about "increasing interest" for the property.

DeanStockton,
No. Never heard of it, this Coop refinanced March 2018 so they don't imminently need to refinance, and I don't see anything in the mortgage regarding it. And with an LTV <10% I don't see how it's an issue.

And this listing still not moving at coop's preferred price point. Most depressing of all, because if anyone could move an apartment of this ilk it would be the broker who has the listing. She clearly knew what needed to be done to move it with the initial listing price, and the forced price increase with no subsequent takers says it all.

Floor prices are something we have to deal with in foreclosures a lot. I try to explain to Boards that what actually does more damage to a building's reputation is a listing sitting around for a long unable to sell. This has actually gotten worse since not only brokers, but buyers as well can see time on market, and will question buying in a building where "units take so long to sell." Also, if they let the sale go through it becomes history and on its way to becoming too stale to use as a comparable, whereas if you reject it can become an albatross around the Coop's neck. In this particular case if they had let the sale go through, by April/May the transaction would be 6 months old and stale for a comp. Now, rather than being a floor price like the Coop intended, it's more of a "ceiling price" because buyers will look at it at say "why would I pay more than $X when that unit sat around for so long and couldn't get that?"

"foreclosures a lot"? Really? Seems coop foreclosures are extremely rare, esp for these buildings.

I agree that buildings are stupid for making it look like nobody wants to buy in their building, but at the same time, why should the Board care about liquidity? I think of coops as being like golf clubs that allow you to get your equity contribution back if someone else joins the club after you leave. It's best to think of the equity contribution as being lost as soon as the cheque is mailed and a windfall if the money ever comes back.

Even in this bull market it's still over 100 a year and after market crashes that number tops 1,000.

Back in the early/mid 1990s we were looking at 30 to 80 a week.

Curious, primarily what neighborhoods?

Yes, there are foreclosures on the UES on condos and THs (such as 310 E 84th) but I thought coop disclosures in centrally-located buildings are quite rare. It's hard to have a foreclosure when you have to put down 50%+.