Odds of selling

So, the friends I referenced above who ended up renting in 2020 when they moved from California because they found NYC sellers unreasonable are now buying the apartment they rented in 2020 (it was an inonada-type rental) because they have irrationally fallen in love with it they way many of us do when it comes to real estate. Their lease is up, and the owners listed it for sale, got an offer, but gave friends a ROFR, which friends are exercising. I just sent them the name of our beloved NYC real estate attorney. By buying, their housing costs are definitely increasing; I am certain they could have found a comparable rental, but they have made this special apartment their "home," and are paying an absurd amount for it per my preferences. Long live NYC real estate!

*sigh* — sometimes I feel like the last renter standing, all my compatriots fallen. I worry that I too might one day succumb to such an ignominious fate.

I would guess the current state of the rental market motivated their decision too. It’s not just that rents are up ~50% since the bottom, back to the pre-pandemic levels, but inventory is very thin too. So it’s just that much harder to find the gem you’re looking for, even at a higher rent (albeit lower than the cost of buying).

Stay strong Nada! I wish that I was wired as you are.

It sounds like these fallen renters were just tired of having to continually move, find that next gem. I was a renter most of my life, it suited how I lived along with my wallet. Just decided I wanted to get off the carousel, find a place to 'permanently' call home base, keep all my stuff. In my case though, I got lucky, the value tripled from where I bought it... Not that it really matters to us, as we're not going anywhere.

Is there an AA in New York City for those about to fall off the rental wagon?? Need to speak to a sponsor ; )

Nah, these weren’t true believers. Recall, when they first came to NYC they were looking to buy but then gave up. I get the sense that we’re transitioning from a period where the increased rental demand of the past year or two (pandemic-era exploration) transitions into increased purchase demand.

I would really appreciate knowing what an “Inonada” level apartment would be selling for now.

On a relative basis, I’d say ~10% below the peak of ~2016 but ~10% above the trough of 2020.

Nada, I think ph41 wants a $ range.

Apologies for confusion. I don’t think Nada would be caught dead in the apt in question. Friends are now in bidding war. My guess is it settles around $3.75M. The “inonada-style” was just referring to the deal they got renting it at $8500/month.

> Ino - come on , what $ level apartment (purchase price) sets your pulse racing?

I’d prefer not to put up a number publicly ph41, so I’ll answer you via a riddle you can solve. Take the bottom digit of your building’s street number (not street name), multiply by 6, and add as many zeros as it takes to exceed the price on the apt MCR’s friends are bidding on. That’s the purchase price of my current apt.

Getting my pulse racing is another matter altogether. The first NYC apt I was truly excited about renting was a $2.xM-ish place. It just depends on the features of the apt. E.g., I am guessing the wrap terrace in your apt makes your apt more exciting than others at a similar price point.

Wow, MCR — that is (was) a great rent for a $3.75M apt. I don’t know if the apt has any exciting features, but the rent alone is enough to get my pulse racing ;).

I was thinking the same thing, and I was waiting for your comment regarding $8,500 rent v. a 3.75 million purchase.

Yeah, they hit the rental market during peak uncertainty. It was a disaster on every level other than scoring an amazing rental deal on a special apartment.

$8500 for $3.75M is indeed a pandemic-only deal. Pre-/post-pandemic, you’re doing quite well if you can get it done for $12K.

Did they do an 18-month lease, or was it 12-month and then running month-to-month?

The latter.

Thanks, MCR.

It funny, I was telling anyone who’d listen that 2020 represented a once-in-a-generation opportunity to lock in a low rent. No one listened. E.g., I told two people who reported to me, both living in ~$1M rentals for ~$5K/mo, to go see a pair of ~$3M condos that could be had for ~$7K/mo, probably locked in for 3 years. Both could easily afford it without batting an eye (I know what they make), but neither even bothered given a combination of inertia and uncertainty.

Fast forward a year, one of them seems super cooped up in their current place. (The place I had in mind is at least 2x larger.). The other is considering moving this year and asked me for pointers. I had nothing helpful to say — inventory is tight.

But would you want to move in the middle of a pandemic?

Sure, I did. As did 837K other people who filed 2020 change-of-address forms from NYC (to NYC or elsewhere):

https://comptroller.nyc.gov/reports/the-pandemics-impact-on-nyc-migration-patterns/

@nada interesting that three of your coworkers have found me independently. Can you hang a flyer up in the break area with the little tabs that you pull the phone numbers off of ; )

I think a lot of people just thought the rental market was going to be in the crapper for the Long haul. There were plenty of pundits on this site that seemed to believe that... I do remember clearly you putting out the Clarion call...

It took me a long time to learn a simple lesson, when the s***'s hitting the fan, that's the time to buy, not sell. Begs the question, why do people lose their minds in Bull markets stepping over one another to pay more and more. And then when markets go into the crapper they freeze up? I never liked the phrase 'catching a falling knife.'

Keith
TBG

799 Park Avenue 19/20 D. Came on at $12.5M now down to $9.6M. Looks like a beautiful apartment but there is obviously a problem.
I have my own theory about why this isn’t selling. Still not sure what price would make it move.
Any ideas?

799 Park Avenue 19/20 D. Came on at $12.5M now down to $9.6M. Looks like a beautiful apartment but there is obviously a problem.
I have my own theory about why this isn’t selling. Still not sure what price would make it move.
Any ideas?

799 Park Avenue 19/20 D. Came on at $12.5M now down to $9.6M. Looks like a beautiful apartment but there is obviously a problem.
I have my own theory about why this isn’t selling. Still not sure what price would make it move.
Any ideas?

@ph41 - Not a market I follow, but I was just looking at 800 Park for different reason and noted that 10th floor just moved at $8.7M, which struck me as low compared to what apartments of that ilk were selling for back in 2013-2015. It looks like 799 Park 19/20D might be priced right now given comparable listings, but initial ask of $12.5M seems to be wishful thinking back to that 2013-2015 period?

@mcr- with your reference to apartments at 800 Park you have unwittingly put your finger on the problem with the apartment at 799 Park. Check out past sales for the building and you’ll see that basically the highest they’ve ever been is somewhere below $2.5M. Most people who spend the asking price for 19/20 want at least a few other people/apartments in their building at their price point or above, not all so far below

Ah, that makes sense. With that info, I throw out $7,250,000 as market clearing price. It will be an interesting watch; thank you for highlighting it.

Excellent points about the pricing of 799 19/20d. My personal complaint about 799 is that it's just an unfortunate layout and not very nice. A main MBR space that's not all that large, attached to nearly 3x the space for bath/WIC/dressing rooms/ hallways. And 2 BR directly *off the LR*. Put the kids there, and it's a long walk from the MBR to shut the kids up (if you even hear them from so far away). A laundry off the LR? in addition to the one upstairs? For what, exactly? A 2nd floor lounge that's not really acoustically separate from the LR? The MBR shower/sink area which is not materially separate from the BR? For the price, all no, no, no, in my view. I'd much rather have 800 10th fl, which is also 3 BR, with excellent separation of public and private space, rooms with proportion, and without the sloppy use of space that 799 exhibits. (But yes, I'm rather traditional in that sense, and am a fan of J.E.R. Carpenter's ideas about apartment layout.)

That said, the problem with 800 is that the view out of the Park Ave windows is of 799.

>Aaron2. This is an apartment for a couple with grown or no children, occasional overnight guests.
The entire 2nd floor is a couples suite, with great space( and closets to die for).
What you call “sloppy space “ is basically large, luxurious space (even some which is not used 24/7) which is the greatest luxury in a NY apartment

>Aaron2. This is an apartment for a couple with grown or no children, occasional overnight guests.
The entire 2nd floor is a couples suite, with great space( and closets to die for).
What you call “sloppy space “ is basically large, luxurious space (even some which is not used 24/7) which is the greatest luxury in a NY apartment

And this apartment has the open kitchen/dining/ living space which many people now prefer.
Tho I also like that apartment at 800

And the building has a garage, which very few, if any, have on Park, snd which makes getaways to the country house so much easier

And the building has a garage, which very few, if any, have on Park, snd which makes getaways to the country house so much easier

Nothing beats the price cut at 1060 Fifth Avenue.

>> Check out past sales for the building and you’ll see that basically the highest they’ve ever been is somewhere below $2.5M. Most people who spend the asking price for 19/20 want at least a few other people/apartments in their building at their price point or above, not all so far below

We’re talking about 19/20 _B_ at 799 Park, right? The problem with all the other apts selling for so much less is that it means this apt is a combo. A 5200 sq ft combo of ~3 apts will never be anything like a purpose-built 5200 sq ft apt. It has neither the ceiling height nor the structure to graciously support large wall/column-free space the floor plan aspires to. I don’t see why such an apt, no matter how nicely it’s designed, should fetch more than $2000 ppsf. To me, this is not “large, luxurious space”; it’s more large, gratuitous space. The vertical dimension is missing.

As a contrast, the space in 800 Park does not feel gratuitous. It limits its largest room to ~450 square sq ft, compare to ~1400 sq ft at 799 Park, despite having an extra foot of ceiling height to work with. A ~1400 sq ft open room is great, but only if you have 11’+ ceilings to work with.

Exactly right. 8 foot Ceiling do not really work well if the apartment is bigger than 1500 sq ft or for a room say greater than 500 sq ft.

@30yrs - Assume you are talking about 10B - WOW! From $65M in 2017 to $65M down to $20M. What is going on there?

And plus one on all the comments re ungracious feeling of 799 Park combo. All that space does nothing for me; I personally would pay more for smaller space with charm/elegance.

MCR>> What is going on there?

Garden-variety delusions of grandeur, I think.

For those too lazy to search, here is the apt:

https://streeteasy.com/building/1060-5-avenue-new_york/10b

About 6000 sq ft, so they were asking $10K ppsf originally. Now they’re down to $3.3K ppsf. Meanwhile, comp in building (not to mention general genre) is $2K ppsf:

https://streeteasy.com/building/1060-5-avenue-new_york/11cd

I will retract my assessment of 'sloppy' in favor of nada's better term of 'gratuitous'. Yes, it's a lot of space, with nice finishes, but is significantly compromised by the ceiling height and charmless layout.

Not sure I want that 70' bowling alley of a hallway at 1060 either. The basic layout is sensible, even though the owners share a hallway with the staff rooms. Heaven forfend! 11CD is in my view a better layout (and who doesn't want a separate silver vault?), but above around 3000 sf, all units tend to get a bit sprawly.)

Agree ceilings at 799 are too low for a space that size

Darn, I checked my apartment today and couldn’t find the gratuitous space I was hoping to find!
Every space utilized!

>> The basic layout is sensible, even though the owners share a hallway with the staff rooms. Heaven forfend!

J. E.R. Carpenter would do no such thing! Somewhere along the way, the floor plan has been butchered. Note that in the original floor plan, there are 5 maid’s rooms, plus a servants hall, all connected by a separate passage that runs alongside the main corridor.

I think the sprawliness of apts of this size is a function of their era. In the 1920’s, a typical family would have had 4 children, and one of means could actually put 5 staff to use — de-feather the chicken, wash the laundry by hand, look after / entertain the kids. So 10 rooms across 4000 sq ft just to house the people made sense, and you were left with a gracious ~1500 sq ft of public space across gallery / living / library / dining plus another ~500 sq ft for the kitchen.

Modern times tend not to require such space. Typical families have 2 kids. You need less staff too: deboned vacuum-sealed chicken for dinner, washing machines for the clothes, and iPads for the kids. So what do you do with all that space? Combining rooms is a no-no, because the ceiling height cannot support it graciously. So you combine the chopped-up staff rooms and start using the bedrooms for separate functions — one is an office, one is a media room, one is a pool room, etc. But the sprawl remains.

Modern-built apts of this size need not be so sprawl-y, because they start with a structure that allows larger rooms via higher ceilings and stronger columns.

Nada, Re 1060 5th. I have recently met several families with 3-4 kids. I didn't know it was that common. So for someone with 3 or 4 kids, one live-in help (fairly common with a young children) and frequently visiting grand parents, the apartments will still work well after clean-up reno and central ac. Sales price is hard to say as the apartment to most people will scream a gut reno and reconfigure. Then there is 3% flip tax and likely very strict reno rules. So takes out people who want instant gratification of being able to move-in.

Sure, it’ll work well for some. Put it up for rent at a nice enough price, I’ll make it work for my household of 2. But there’s a reason you see new developments that max out at 4 BRs, whether the apt is 3000 sq ft or 6000 sq ft.

to dream