Resales of buys in the last 5 years ... at a loss

https://streeteasy.com/building/parker-west/10

One Manhattan Square has a bunch of resales at a loss, and the sponsor hasn't even sold out the building. I wonder how many sponsor units remain...

"...also features a powder room with a shower..". Wouldn't that just be another bathroom?

Got to love 'Sediment white' though.

It’s interesting with a laundry list of fancy amenities and an eye watering price to match, only part time doormen. I would have expected for that price and the description, you would get a full time doorman.

@911 - 18 units, very very very hard to make the economics work.
Arguably even sub-100 units, the economics on staff are pretty hard.

Amenities by comparison aren't that expensive to build once, and upkeep costs are minimal as long as there's no pool.

Economics of full time doormen for 18 units isn't hard: Everybody pays 1/18 of the cost. There are smaller buildings that do this. The developers made some decisions about what buyers wanted, and one was that the modern buyer paying an average of ~$2.5m wasn't that interested in such services.

At least amenity spaces can be repurposed for other things as tastes and styles change, whereas getting rid of unionized staff is other story.

@Aaron - Semantics, same thing - its expensive.

There's varying levels of what full time staff means. Anything from 6 staff up to 15+ staff.
Live in super or no? How many days/shifts for porters? Doorman or doorman + concierge? Union vs non-union (kind of moot with prevailing wage law changes but still..)

Having 15 staff for a 200 unit building is a lot more economical than even "bare bones full-time" ~6 total staff across 18 units.

In an 18 unit building, that 3bed/3bath unit with $3k maintenance might need to be more like $5k maintenance for full time staff, depending on how full we are talking.

back on topic
Here's one and fits the pattern I've noticed in the 2~3 bed, $2.5-$3.5M segment.
Flatiron bought 2016
Been trying to sell for 18 months, the last 12 months offering at a loss
https://streeteasy.com/building/21w20-condominium/sale/1738925

I'm not even cherry picking here.. just plug in 2-3 beds / 2+ bath / condo / doorman / $2-$3.5M segment / resale. Good % of these are flat to down from purchase price.

LES - flat on COVID bottom purchase
https://streeteasy.com/building/196-orchard-street-new_york/10f

W Village - up 5% on 11 year hold (so down after transaction costs)
https://streeteasy.com/building/2-cornelia-street-new_york/702

W Village - down $100k in 11 years hold
https://streeteasy.com/building/memphis-downtown/sale/1709335

@21W20 5th floor sold $2,346,215 in 2021 after $2,725,000 in 2016

2 Cornelia:
- High floor?
- That corner is a bit of a cesspool
- I seem to remember the Condo Board becoming a bit of a PITA after they had some bad experiences

Memphis Downtown:
I wish Street East records went back further because I could swear that unit was available for like $600k at one point.

Personally I'm not overly fond of these smaller one unit per floor Condominiums. They tend to have high loss factors (stated SF vs usable SF), I don't like the layouts, either the Common Charges are too high or the service level is too low (or both). They tend to be populated by people who are unhappy because the occupants expect certain things "because they spent a lot of money" and they assumed certain things would be taken care of for them without any regard if those assumptions were at all reasonable.

@30 - what I found interesting with these examples was they weren't your typical UES/UWS listings. Downtown more fashionable hoods always seemed to have far fewer apartments / much steadier demand. These may not be the most desirable units in these hoods, but I'm surprised how many I can find like this.

Agreed on the smaller condos being less desirable. Similarly I wouldn't buy in new dev again, one of the reasons being it attracts a lot of first time buyers who have unreasonable expectations about what is their responsibility vs the board/staff.

I was talking about these listings with my wife and was saying how we could buy for 10 year ago prices. We make a lot more money than we did then, but I still couldn't justify the math to buy at 2013 prices with my 2024 wages. Maybe these are outliers of historical irrational exuberance, I dunno.

Re: Memphis Downtown, here's another recent sale listing that sold at an after-fees loss

https://streeteasy.com/building/memphis-downtown/3a

To your point re: more historical prices in the building..

Closing prices
1998 - $450K
2013 - $1.8M +300% in 15 years
2021 - $2.015M +11% in 8 years
2024 - $2.125M +5% in 3 years

So the 1998 buyer made 300% (beating the stock market), and all buyers from 2013 basically flat/down after round trip costs (in time periods where stock market was way up)..

>They tend to be populated by people who are unhappy because the occupants expect certain things "because they spent a lot of money" and they assumed certain things would be taken care of for them without any regard if those assumptions were at all reasonable.

Interesting observation and warning.

The Memphis apt steve123 found for sale at $3.5M + $5.2K/mo:

https://streeteasy.com/building/memphis-downtown/sale/1709335

Is available for rent furnished at $12.5K/mo:

https://streeteasy.com/building/memphis-downtown/rental/4502961

If you rent, you spend $150K/yr. That's quite a tidy sum of money in most circles. But if you buy, you spend $270K/yr in my head -- the first $500K/yr of your pre-tax income.

It's a lovely apartment and all, but its interior is small, low-ceiling, and awkwardly a duplex. With all due respect to the owner who paid $3.6M in 2013, I'm not surprised people aren't lining up to blow $500K/yr of pre-tax income on the place.

Steve, I also blame you for introducing me to r/fatfire. There was recently a thread on buying NYC real estate that people here might find entertaining:

https://www.reddit.com/r/fatFIRE/comments/1g1kmqe/pied_a_terre_in_nycues_is_it_ever_a_good/

It's pretty interesting how uniformly the crowd there agrees that buying NYC RE is "lighitng money on fire" (which might be fine if you don't care).

This comment was particularly funny:

>> My wealth manager has only once cautioned me against spending money, and that was related to buying a place in NYC. He was fine with fractional jet ownership, which thankfully I never did, ...

I suspect anyone considering a $3-5 million pied-a-terre has way more money than 99% of the people on this forum and (Reddit for that matter), any most likely does not care about any of our opinions on whether is a “wise” or “prudent “ decision. If you can easily afford it, you love NYC and plan to use it reasonably often, then it’s not a bad decision. For me, I own homes in Los Angeles and San Francisco and the only way I can justify the cost is that I can do shorter rentals while the apartments are not in use. However, I still only break even with a high vacancy when I’m not using either, which is just not possible, so it does drain some cash. But it is nice knowing at the drop of a hat, i can fly to the West Coast and use either, and I do, sometimes on spur of the moment when I can snag a good plane ticket. Most people would do the short term rental think and not deal with the hassles of owning a second or third home and managing the rental aspect, but personally, I’m happy with my decision. I could easily afford and that was that. Of course I realize when I sell, I may lose money, but right now both prepare doing well in terms of what I paid for. Ultimately, if you can afford it, then it’s not a bad decision.

@nada - my apologies on FatFire and that thread is hilarious, I was following it in real time.
I think places like here & r/fatfire are pretty indicative of how the vibe has shifted on how NYC (particularly Manhattan) RE ownership is perceived. A luxury, a cost.. but not an investment & ticket to riches.

Agreed also that even with the pricing being the same as 10+ years ago, a bunch of those listings I shared are .. worse than renting!

Was discussing with my wife, even in our BK condo, we have neighbors that have rented the whole time we are here. Slightly higher floor, better line, AND $2k/mo rent less than our 2024 all-in costs.

30_it's 589/1012 if you want to find the old trade in Acris and back out the sale price from the transfer taxes...

^^ sorry, I meant "2 Cornelia," not "Memphis Downtown"

Also, LIC not to be missed on the trend of $2-3.5M resale pain

Attempted 1 year new dev flip is now going sideways here in a "penthouse" undersized 2bed/2bath
https://streeteasy.com/building/skyline-tower/sale/1710826?featured=1

Here's one thats not there yet, but headed in that direction
One buyer made ~90% holding for 5 years (2009-2014), and their buyer is aspiring to ~40% in 10 years, but no takers
https://streeteasy.com/building/5th-street-lofts-5sl/5m
Given the age/style/amenities versus all the new devs coming online nearby seems like a tough sell.

You have to be careful on those Flatiron sidestreets. Rowdy/noisy nightclubs lie in wait. Maybe word got out.

What's your handle on fat tire, nada ; )

On topic, 2-3bed $2-3.5M

Was browsing my old condo and SE recommended me a bunch of other UWS listings

https://streeteasy.com/building/the-avery-100-riverside-boulevard-new_york/12f
Listing is.. 6% above 2008 cost basis here, so down after fees.. and not moved in a year of being listed. Probably having a tenant in place thru 2026 is an issue.
And in 2008 its monthlies were $1350 all-in due to abatement. Those monthlies are now.. $5250.

Or how about 9% below 2021 buy (and we thought 2021 was bottom fishing)
https://streeteasy.com/building/350-west-71-street-new_york/2b

Just an FYI. 2021 was a exceptionally strong seller's market, with an emphasis on Brooklyn.

>> What's your handle on fat tire, nada ; )

I thankfully don’t have one — discretion is the better part of valor. But if I do get one, it’ll be nadafattire ;).

@Keith - my recollection was 2021 started pretty dire but ended quite bullish right?

We had some friends get great lease deals / bought at a discount up til early spring.
Mostly coinciding with everyone realizing how quickly we'd get the city/country mostly vaccinated, leading into hot vax summer.

I remember a few hospital/university adjacent friends getting their shots seemingly front of the queue in Jan/Feb but next thing I knew I had both shots before Easter, and they were begging the reluctant to come in for a shot by June.

>> Just an FYI. 2021 was a exceptionally strong seller's market, with an emphasis on Brooklyn.

The SE price index bottomed in March 2021, right around when the place steve123 referenced sold. RichardBerg bought a couple months prior to that. Krolik, a couple of months after.

While sales became strong as 2021 progressed, it was on the back of slow sales & weak pricing by late 2020 and early 2021.

By the end of 2021, I would consider that one of New York city's great real estate bull markets. It was the first year we did close to $200 million in transactions. Yes, I assisted Richard with that purchase, great deal in a very niche building. However, we did get a 20% discount on a fairly priced home.

Also, if we're using the closing date posted in StreetEasy, most likely it went in the contract 2 to 4 months previously.

https://www.nytimes.com/2021/12/31/realestate/in-2021-new-yorks-housing-market-made-a-stunning-comeback.html#:~:text=After%20a%20yea

"After a year of depressed sales and prices, Manhattan had a record 4,523 apartment sales in the third quarter of 2021, the most in more than three decades, and the median sale price, $1,115,000, was nearly 9 percent higher than in the same quarter of 2019, before the pandemic, according to data from the brokerage Douglas Elliman.

“Everything is off the charts,” Mr. Miller, the author of the report, said of New York’s belated surge. “Not only on a year-over-year basis, where there can be distortion, but compared to two years ago, sales are still way up.”

@Keith - misphrased - agreed 2021 ended strong, just that Q1 was still pretty dire.

The bull market ran from something like early summer 2021 into early fall 2022 right?

If I recall correctly, 2022 started out okay however started losing steam as we got to the summer. By the fall things were pretty dead... The one shining light, at least the thing that kept us busy was the fact that the Brooklyn market remained strong, especially the brownstone market throughout this period. To some extent, specifically the brownstone market in Brooklyn remains strong. Although I haven't looked at the data, I'm going to guess the brownstone market in Brooklyn is very thin. A lot of buyers chasing few homes. I just sent in a highest and best offer for a Brooklyn home that needs an absolute gut renovation, hasn't been lived in I think for close to 20 years! Multiple bids, we're currently about 600,000 over the asking price.

>> By the end of 2021, I would consider that one of New York city's great real estate bull markets. It was the first year we did close to $200 million in transactions.

I think you have a tendency to conflate “active market” with “bull market”. An active market is one where there is a lot of activity, which is

I think you have a tendency to conflate “active market” with “bull market”. An active market is one where there is a lot of activity. Those are unconditionally good for brokers. They are good for sellers looking to exit quickly too, but it says nothing about price. Could be good, could be bad. Bull markets are about price.

Trough to peak in the 2021-2022 cycle was 10%. That’s not a bull market, that’s a blip. The tripling that occurred 1996-2006 or so… that’s a bull market.

Point taken. Definitely using the term 'bull market' simply as an adjective to describe a very active market. Need to get my Wall Street terms straightened out.

@nada - I think this is true for Manhattan, though arguably there was a bit of a genuine bull market in pockets of Brooklyn. Units near me sold for up to 15-20% above pre-COVID levels, without much in the way of 2020 fire sales.. so, not bad.

That said, during most of this 'active market' I had a friend trying to sell a prime Manhattan 3bed for something like 25% above 2007 cost basis + very recent nearly gut reno with no takers..

I can certainly believe that. SE has Brooklyn up 17% over the past 10 years. It’s better than Manhattan at 0%, but with inflation up 32%, I wouldn’t call that a bull market personally. I know some pockets did much better. But even at 15-20% since 2019 for the units near you, I wouldn’t call that a bull market personally with inflation having been 23%.

His handle is Daddy_Warbucks on fat tire subreddit

https://nypost.com/2024/10/22/real-estate/billionaire-ken-griffin-dumps-luxury-chicago-penthouse-for-11m-amid-move-to-miami-half-of-what-he-paid-in-2017/

Just perfect, now I am tuned into fat tire subreddit.

Also, @nada, thank you for pointing out the "active" vs "bull" market. I am witnessing a quite "active" market in my little niche, but it is far from a "bull" market, with sellers recognizing what would be obscene losses for anyone who has a materiality threshold for financial loss.

Ken Griffin clearly does not have a materiality threshold for financial loss that could materialize in Manhattan real estate.

First, I don't think he particularly cares where he lives, unlike most of us. Any loss he takes on getting out of Chicago RE will probably be an order of magnitude less than what he will save by filing FL , rather than IL, taxes, both personally and for Citadel and related entities. And, the residences are just individual holdings within an overall asset class -- he still may be up in that class if he's managed it well.

>Definitely using the term 'bull market' simply as an adjective to describe a very active market.

What is the difference?