Are NYC studios hard to sell? what's a good offer?

studios are always sellable as a pieda terre or prents buying for kids. lowe end of the market not hurt as much as the higher end.

whts the square footage on this unit. 900 maintenance very high unless square footage over 600.

Why buy any time soon if the price is 800psf....things seem to be trending to well below that, unless it is some real gem,....and , just from a risk management perspective, risks are very skewed right now, with likelihood price rebound nil, while prices could go significantly lower. If this was say 600sf already, then your downside risk picture would be different and it might be worth it to buy now.

i just checked east village studios. you can get already renovated studios there (small) for around 800 sq ft.

place is small -- no exact figure from the listing, but i figure around 450-500sqft. Pluses are high ceilings, sleeping loft, great lighting (a few skylights), open feel except in the cramped kitchen. With the extend of the needed renovation I worry if this is a long shot.

at 800 sq/ft that studio is not relatively affordable add in the extensive remodel - forget it-- unless you have a deep desire to foolishly part with your money. hard to comment more since no link to listing so don't now total sqft etc.

its a long shot - you could get a remodeled 500 sq ft 1 bed for $800 sq/ft. If you could get it at around $300/sqft then go for it as you would be able to recoup the investment when you sell in 5 yrs.

I wonder if these people posting and saying they are thinking about buying NOW at prices that are, realistically, taking into account actual sf and maybe renovations, are just kidding or what or are they brokers or what? It just seems so crazy and out of kilter with the market trends. To be clear, I am not referring to this specific posting because it is one of several, and I don't know anyting about this person posting (and actually I think the tendency on this site to personalize is tedious).

i think some may be brokers trying to get a guage on the market. or get some kind of anectodal evidence to present to seller that their expectations on what they can get doesn't match the market since comps are useless at this point.

or...maybe it has to do with the fact that a few people are buying, or at least very seriously looking to buy despite the broader market trends - it's not totally unfathomable that people made their way to streeteasy in order to get a sense and have sniffed out that it is a fine place to get opinions on reasonable asking prices given the fact that comps are useless.

I am selling in the West Village (against this listing, among other things) and I am drawing a lot of first-time shoppers who are attracted by sales prices that compare decently against rents -- but who don't know how to run comps, don't want to use brokers to run comps, and in generally have trouble deciding whether prices are "right" in this market.

I think what we are seeing on streeteasy is an attempt by this class of shopper to educate themselves about pricing. So it's worth it to be reasonably polite to these people and help 'em out. But honestly, I don't think most of these new entrants are going to end up buying in the next three months -- I think they have too many uncertainties and not enough urgency to make decisions.

ali r.
{downtown broker}

well i can tell you the price is not right on this apartment.

You might want to check out how volatile studio prices were in the early 1990s. Go to:

http://www.millersamuel.com/data/

Compare a time series on studio prices versus one and two-bedrooms. (I normally like to look at price per square foot to make the numbers at least somewhat more analogous.)

You will find that studios took a terrible beating in the early 1990s versus larger apartments.

Maybe that was a unique period - but you should at least be aware of what did take place then. With hindsight "at the bottom" it was a great time to buy a studio versus a one or two-bedroom. But the fall was pretty ugly. I had a friend who bought an L-shaped studio in a luxury building for $65 K in 1992 which is now worth about $450 K.

It's hard to call studio prices today, though, cheap by any stretch of the imagination.

front porch - the problem is pricing is not dropping enough to compare decently against rents as rents are falling also. for a 1 bed to compare to rental pricing it would have to be $400K with less than $1000 a month maintenance -- which works out to about 2800/mo.

According to "Manhattan Rental Market Report" the average Manhattan doorman studio rent dropped 10.43% in the 12 months ending March, 2009 to $2,316. (Annualized: $27,792) That drop was substantially greater than the drop for one-bedroom apartments.

If you multiply this times Steve's favorite price/rent ratio of 12 you get: $333,504.

Don't know if you're seeing a whole lot of inventory trading at such a price - yet.

Nope, we're not seeing prices go anywhere near $333K, at least not on units that fit queen beds.

But remember, prices don't need to be QUITE that low at sub 5% interest rates (which we are definitely seeing on $417K loans; I just got quoted sub-5 if I'd pay a point on a "conforming plus"-- up to $625K -- loan).

The other thing is that the mortgage deduction is worth (or ought to be worth) something, so you shouldn't have to have your carrying costs drop all the way to $2800 to be rent-equivalent -- because $2800 on a purchase is going to generate around $24,000 worth of tax deductions the first year, which ought to be worth around $700 a month depending on what you're paying to the Feds and the State.

I'm not going to comment on the value of this particular apartment, because it's not my listing.

One interesting historic about the last drop is that prices bumped along the bottom for *years* -- like your friend, Topper, I got an L-shaped studio in a decent (doorman, but not luxury, but a nice view of the Empire State) building for $65K -- but in 1996.

ali r.
{downtown broker}

correction: apt is actually approx 500sqft which brings prices closer to $650/sqft, which has now a forgone conclusion anyway as they've accepted an offer since the start of this discussion.

clarification: this is not a broker and yes, there are serious first-time buyers perusing the market now who have seen an opportunity to jump into the market for potential long-term investments and are testing the waters. The fact of the matter is that NYC will continue to remain more stable than the broader market and as such, my belief is that unless you're buying into a new development which is incredibly high-risk for default, the waters are relatively safe. Apologies if I'm naiive, but this discussion is why we have a BB to discuss these questions in the first place right?

Yshaw22 you might be correct that NYC will continue to be more stable, but there is far more downside than upside right now in Manhattan, I think, and I suspect most think, but, as you say, this is a forum for debating that. If new developments start failing -- which will somehow or other lead to lots of units being sold a lot cheaper than today's prices-- it is bound to have a major impact on the rest of the market, whether coop, prewar or whatever.