The New York Times April 29, 2010 Older Condos Better Than New? By VIVIAN S. TOY BUYERS who once would have headed straight for the sleek lines and polished finishes of new condominiums are discovering…... Read more >

The New York Times
April 29, 2010

Older Condos Better Than New?
By VIVIAN S. TOY

BUYERS who once would have headed straight for the sleek lines and polished finishes of new condominiums are discovering a different sector of the market: almost-new condos.

Buildings finished a few years ago appeal to these buyers, because they can offer a contemporary aesthetic without many of the risks that come with brand-new construction. Chances are good that a building well beyond infancy, and maybe even toddlerhood, has already overcome any growing pains. Banks also view established buildings more favorably, making mortgages easier to come by. On top of that, prices are often lower than for comparable new units.

“Almost-new development seems to be picking up steam, and I think it’s because it’s seen as an alternative for people who want new construction,” said Jonathan J. Miller, the president of the appraisal firm Miller Samuel and a partner in Condominium Recovery, which invests in real estate. “Almost-new has all the amenities that were widely touted during the boom, but they’re already established. All the kinks have been worked out, and there are no empty units to worry about.”

While new-development units accounted for 57 percent of all apartments sold in Manhattan at the height of the condo boom in 2006, they now account for only 16 percent of sales, said Mr. Miller, who also provides market data for Prudential Douglas Elliman. But almost-new condos, which he defines as units three to five years old, have picked up some of the slack, with 10 percent of the market, versus less than 2 percent in 2007. Those figures reflect changes in inventory, he said, but still show a significant shift in buyers’ preferences.

Jessica and David Saitowitz started house-hunting in February. They signed a contract last month for a TriBeCa condominium completed in 2007.

“We looked at one new development where the person showing us around said move-in was supposed to be in May,” said Ms. Saitowitz, who works in financial sales. “But we were standing in units with no walls, and you couldn’t even tell where the bathrooms would go.”

She and her husband were much more comfortable buying a resale in a three-year-old building. “It meant that the building had been lived in,” she said, “and if there was anything wrong, it had been dealt with already.”

Mr. Miller noted that prices in new developments tend to be higher than in almost-new buildings, because unlike most resales, they “haven’t adjusted to the current pricing conditions.” That’s because the developers’ banks have not allowed them to lower their prices, he said.

Doug Newkirk, an agent with Core, listed a $1.295 million one-bedroom at 505 Greenwich Street in SoHo that recently went into contract after three weeks on the market. “The advantage of a modern building like this one that was built mid-decade,” Mr. Newkirk said, “is it’s still in incredible condition and its tax abatement hasn’t run out yet.”

Mallory Weil, a senior vice president of Halstead Property who has a listing at 505 Greenwich and also lives there, said the building was less expensive than some of its neighbors.

“We were the first condo to go up five years ago” in the area, Ms. Weil said, “and because the market went up so quickly after that, later developers wound up paying a lot more for their land.” She said original owners were receiving an average of $1,200 a square foot, “which is quite reasonable for a building like this one.” Many units originally sold for under $1,000 a square foot.

Banks clamped down on lending for mortgages in new construction after the Lehman Brothers crisis in September 2008. Melissa Cohn, the president of Manhattan Mortgage, says major lenders now will not make loans in a new building unless 70 percent of its apartments have closed. Another potential snag is a newly enforced requirement that buildings have at least 10 percent of their annual budget in a reserve fund. “Brand-new buildings tend not to have it,” she said, “and it usually takes a few years for a building to build that up.”

Buyers are also steering clear of new developments to avoid the possibility that the project will never get finished or not turn out as promised.

“There are so many disasters out there,” said Lawrence Rich, a vice president of Prudential Douglas Elliman. “Every day you hear of another new building that’s in trouble, and people don’t want a building where there might be problems and they won’t enjoy living there while it all gets worked out.”

Mr. Rich said he was working with a buyer who had started his search in new development two years ago but pulled back when the market seized up. “But now he doesn’t want a brand-new building,” Mr. Rich said. “He wants something that’s two to three years old, something that’s established but still considered new.”

The buyer, as well as more than a dozen others approached for this article, declined to be interviewed. He, like many of the others, works in finance, and is forbidden by his company to speak to reporters.

Angela Latigona, an agent at Warburg Realty, has a buyer with a budget of about $6 million who, if all things were equal, would buy a penthouse he has his eye on in a new development.

But Ms. Latigona said he was now angling for a resale to avoid the transfer taxes that buyers in a new development typically must pay (the sellers pay them in a resale). He also would rather be in a building with a proven sales record.

“He knows that at his price point, if he buys in a new development, he’ll be carrying the building,” Ms. Latigona said. “And if nothing else sells, he’ll be in an unwarranted expensive apartment.”

Frances Katzen, an executive vice president of Prudential Douglas Elliman, says some buyers are avoiding new buildings even when developers pay closing costs and mansion taxes. “They feel the floor plans were better in 2004 and 2005, when there wasn’t such a boom and developers were taking their time,” she said.

Ms. Katzen has listings at 260 Park Avenue South, where prices are down slightly from the market’s peak. A two-bedroom she recently sold there for $2.625 million was first bought in early 2008 for $2.7 million. “This building seems to have rallied quite well,” she said.

Wilbur Gonzalez, an agent at Brown Harris Stevens, said interest was high for his listings at 40 Mercer Street in SoHo, the 2007 building where he lives. “People want to see an operating budget that’s been in effect for a few years and they don’t have to worry about maintenance going from $1 per square foot in the first year to $2 per square foot the second year, which is fairly common,” Mr. Gonzalez said.

Forty Mercer, however, has actually lowered its common charges, he said. But the building did have problems with its swimming pool, which he described as “a drawn-out mini-disaster.”

“We basically had to build a new pool,” he said, “and the whole time people couldn’t access the spa area. It’s a perfect example of how people who bought in the beginning had to go through some pain. But now it’s done.”

One of his sellers is looking for a larger space and would like to move into a new development. “But the buildings we were thinking of have been put on hold,” Mr. Gonzalez said. They are now looking at loft buildings converted as long as 10 years ago.

In some cases, people selling condos that they bought just three to four years ago are turning a tidy profit — an unusual outcome in the current market, where prices have fallen by as much as 30 percent from the market peak in early 2008.

Shaun Osher, the president of Core, which specialized in new development during the boom, said: “Some of the most appealing product is new development that was finished three to four years ago, and that’s a very finite market because there weren’t that many properties. That’s why certain buildings have held their value better than the rest of the market.”

Many of these value-holding buildings are high-end. Resales have been exceptionally strong in the Columbus Circle/Lincoln Square area, including 15 Central Park West, the Time Warner Center, and two lower-profile buildings, the Park Laurel on West 63rd Street and the Park Imperial on West 56th. Many of the resales in these buildings have price tags above $5 million.

Across the park, at One Beacon Court, the condominium tower above Bloomberg headquarters on 58th Street near Third Avenue, apartments originally purchased for about $2,000 a square foot have been selling for as much as $4,000 a square foot, the same as at the market’s height.

Giampiero Rispo, the president of Domus Realty, which works exclusively with foreign buyers, has a penthouse listing at One Beacon Court that recently went into contract for $18.5 million. The owner paid $10.5 million for the four-bedroom apartment in 2005, when One Beacon Court opened.

Its residents — currently including the singer Beyoncé Knowles; formerly the baseball players Bobby Abreu and Johnny Damon — no doubt appreciate a feature not easily replicated in even the newest of the new: the circular driveway, which, Mr. Rispo said, “lets you get in and out of the building without being seen from the street.”

At some point, though, the sheen wears off any project. Michael Garr, a senior vice president of Core who has sold many apartments at the Chelsea Mercantile, a West 23rd Street condo conversion finished in 2000, said that although sales have been strong there, “design specs have changed since the building opened.”

And sellers are finding that, as in many resales, they have to update kitchens or baths to compete with new and almost-new construction. “Particularly in a market like this,” Mr. Garr said, “things have to look top-notch.”

 

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Living In | Vinegar Hill, Brooklyn The Little Town That Prices (Almost) Forgot THE Brooklyn waterfront, once upon a time, was seen as a place where artists and artisans lived and worked, basking in cheap…... Read more >

Living In | Vinegar Hill, Brooklyn
The Little Town That Prices (Almost) Forgot

THE Brooklyn waterfront, once upon a time, was seen as a place where artists and artisans lived and worked, basking in cheap rents, old architecture and a sweet sense of isolation. But lately that reality has changed. Market-rate condominium towers and luxury conversions dot the Kings County coastline, their presence telegraphing a need for a higher income bracket.

Yet in Vinegar Hill, a hamlet within New York City if there ever was one, the old ambience is mostly intact. Nudged into a corner of the waterfront that seems, at least in part, forgotten by time, the place is a few blocks long and a few wide. Despite its handful of new developments, it still feels as secluded and unpretentious as in decades past.

“The longer you stay in Vinegar Hill, the harder it is not to know your neighbors,” said Nicholas Evans-Cato, a longtime worker and renter in the area. “If you see someone who hasn’t moved their car for alternate-side-of-the-street parking, you generally know who it is and you ring their doorbell.”

Many locals are, in essence, living above the store. Mr. Evans-Cato, an artist, rents an apartment upstairs from his studio on Hudson Avenue, which he has operated since 1995, and a carpenter friend does the same. A friend who makes furniture lives a short walk from his own work space, as does Adam Meshberg, an architect and president of the local neighborhood association. People like to stick around, it seems, and others are noticing.

“Up to the mid-’90s,” Mr. Meshberg said, “rents were low, and it was very, very, very quiet. Now we’re in 2010, and it’s coming on the radar.”

For the most part, quiet still reigns along the cobblestone streets, save for trucks from the massive Con Edison plant on the waterfront or from the Damascus Bakery, which episodically infuses the area with the singular aroma of baking pita. These are reminders that industry still has a presence, as it did back when the neighborhood was a bedroom community for workers at the Navy Yard next door and in Dumbo’s factories and warehouses.

Of all the issues raised by the waterfront area’s increasing popularity, it is the truck traffic that takes precedence — especially its effects on the cobblestones, said Robert Perris, the district manager of the local Community Board 2. “It shows how much people are invested in the architectural character of the neighborhood,” he said, “as well as how sort of sleepy it is.”

In the last year or so, the Vinegar Hill House on Hudson Avenue, a restaurant that opened in late 2008, has focused a spotlight on the neighborhood. The last place to eat on the street was a diner that closed in the 1970s, Mr. Evans-Cato said. The restaurant’s fare is creative and seasonal — right now, braised wild boar shank and pumpkin ravioli are on offer — and the owners, Sam Buffa and Jean Adamson, are both locals. In addition to approving critics, the place has garnered its share of regulars, happy for a nearby place to dine well.

“We figured that we would be busy enough, but we didn’t expect this,” said Mr. Buffa, who also lives above his business, having vacated a carriage house on the property to make room for storage and office space. “We get people who drive from the Upper West Side. I can’t tell you how many times people just had no clue this was here.”

WHAT YOU’LL FIND

The neighborhood was named not for any unusual wellspring of vinegar but for a 1798 battle of the Irish Rebellion (one historical theory has it that the name was chosen to attract Irish immigrants). It takes up all of 9 or 10 blocks, and residents most likely number no more than a few hundred.

They have something of a love-hate relationship with their neighbors in Dumbo, appreciating the many services and stores now ensconced next door, but disturbed by increasing traffic, by the shadows of new condo towers and, it must be said, by unwelcome evidence that Dumboites are walking their dogs in Vinegar Hill.

“As Dumbo changes, we change,” said Mr. Meshberg, the neighborhood association head. “The more people moving into Dumbo, the more parking gets screwed up over here.”

Hudson Avenue is the area’s focal point, even with just the one public establishment in the Vinegar Hill House. The road is lined with pre-Civil War row houses. Around the corner on Evans Street, visitors encounter an even older structure: the Commandant’s Mansion, an 1806 estate overlooking the East River from behind an imposing gate. (It remains inhabited today, actually, though not by a commandant.)

Moving west from Hudson Avenue toward Dumbo, sturdy-looking old town houses, with fine examples on both Gold and Front Streets, are interspersed with the occasional warehouse or factory. Vinegar Hill’s new market-rate condo developments include one at 100 Gold Street, next door to the Dorje Ling Buddhist Center, with its bright yellow facade. And on York Street, across from the towers of a public project called the Farragut Houses, further housing construction is in its early stages.

Vinegar Hill may soon have stores to call its own, as the city is seeking a developer for a retail complex in the Navy Yard. The businesses would take the place of Admiral’s Row, a much-loved but decrepit group of row houses; many preservation groups have cried foul.

WHAT YOU’LL PAY

Buyers expecting Dumbo-like prices may be pleasantly surprised; values generally soften as one heads east from the Manhattan Bridge and south toward the Farragut Houses. A $445,000 studio in Vinegar Hill, for example, might go for $550,000 at the J Condominium a few blocks away in Dumbo, said M. Monica Novo, a senior vice president at Prudential Douglas Elliman.

Prices have come down since 2006 and 2007, but percentages are hard to calculate because of the low inventory of properties. Town houses don’t often come on the market, but when they do they are significantly more affordable than comparable properties in nearby Brooklyn Heights or Fort Greene. Often, they also need work; prices start at about $1.1 million but can reach $2 million for a house in pristine shape, according to Steven Gerber, a senior vice president at the Corcoran Group.

“It’s not going to be a Brooklyn Heights number” in price, Mr. Gerber said, “but if it does have a view and it’s nicely done on the inside, that’s not uncommon.”

In terms of new and conversion properties that have sprung up, prices per square foot are staying in the $600 and $700 range, according to David Behin, a partner at the Developers Group. At 100 Gold Street, a 10-unit development, three units are now in contract, and prices for studios, one- and two-bedrooms range from $445,000 to $885,000.

Renters can opt for market-rate buildings like 99 Gold Street, where the Core Group Marketing is listing units from studios to two-bedrooms for $2,650 to $4,900 a month. Older units in town houses are seldom available. When they are, said Mr. Evans-Cato, a longtime renter, one-bedroom units start between $1,000 and $1,500.

THE SCHOOLS

Vinegar Hill is home to one school, Public School 307 on York Street. In 2009, 61.2 percent of third, fourth and fifth graders met standards in English, 78.3 percent in mathematics.

Junior high students can be zoned for the Dr. Susan S. McKinney Secondary School of the Arts, on Park Avenue in the upper part of Fort Greene near the Navy Yard. In 2009, 62.9 percent of students met standards in math, 54.4 percent in English.

One high school nearby is the Freedom Academy, on Nassau Street close to the Manhattan Bridge, where SAT averages last year were 413 in reading, 388 in math and 408 in writing, versus 480, 500 and 470 statewide.

WHAT TO DO

Outside of warm evenings at the Vinegar Hill House and community meetings of the neighborhood group, the neighborhood seems almost purposefully quiet. But busier areas aren’t far away. Dumbo, Brooklyn Heights and Fort Greene all offer plenty of shopping and dining. The growing green spaces of Brooklyn Bridge Park are nearby, and a stroll across one of the bridges is always an option.

THE COMMUTE

Most residences in the neighborhood are no more than a 10-minute walk from the York Street subway station, the first stop into Brooklyn on the F line. The trip to Midtown takes 15 to 20 minutes.

THE HISTORY

Part of the original Dutch town of Breuckelen, Vinegar Hill was farmland until its purchase in 1784 by the Sands brothers, merchants and traders for whom a local street is named. They called the area Olympia, hoping to attract summer visitors from Manhattan; it was later known as part of Irishtown. The present name wasn’t in the picture until the land was bought by John Jackson, a shipbuilder, who sold part of it to the federal government for use as a navy yard. Vinegar Hill soon grew into a small village of laborers and those who catered to them. (In 1822, nearly a quarter of all residents listed their occupations as tavern proprietors.)

ON THE MARKET
 
79 BRIDGE STREET#6A
A two-bedroom two-bath penthouse with two balconies and city views, listed at $1.1 million.
(917) 716-6977

100 GOLD STREET, PENTHOUSE B
A new two-bedroom one-and-a-half-bath duplex with a roof deck, listed at $885,000.
(718) 923-8014

206 FRONT STREET #2D
A one-bedroom one-bath apartment with a private roof terrace, listed at $465,000.
(212) 965-6085

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To Buy or To Rent A Home By Jill Scott With rental prices and sales prices down, a lot of people are debating whether or not they should buy or rent. NY1's Real Estate reporter Jill Scott filed the following…... Read more >

To Buy or To Rent A Home
By Jill Scott

With rental prices and sales prices down, a lot of people are debating whether or not they should buy or rent. NY1's Real Estate reporter Jill Scott filed the following report on that decision.

Erin and Matt Ahrens are about to move to a new home that they will be renting. But before they signed the lease, the debate was whether to rent or buy.

"Rental prices are falling, housing prices are also falling, but housing prices are still on a monthly basis," says Erin Ahrens. "Even if you look in the marketplace, you'll see an apartment for sale in one building, but the monthly cost is actually a lot more than the cost to rent it."

"Rent versus buy" seems to be what a lot of people are asking themselves now that real estate prices are down.

Angela Latigona, the couple's broker, finds that this year a number of her clients who were looking to buy have ended up renting.

She says it is important to determine how long you plan to be in the home. If you do not plan to live there for more than two years, it might not be worth the investment to buy.

"You have to remember there are certain fees that are associated with buying an home and selling a home versus renting," says Latigona. "They have the potential to be higher than that of renting, if you are only going to stay in the home for two years. Because you do have brokers fees, you have closing costs."

Buying gives you equity and a tax deduction, but she says if you're not a long term resident, it may not be cost effective from a monthly basis.

By comparison, the only fees in a rental are the application fee and a background check, along with a possible brokers' fee.

If you do plan to live in the home for a while, Latigona says this is a great time to trade up if you can.

"If you're in a one-bedroom right now and you would like to move to a two-bedroom, there couldn't be a better market to sell in," says Latigona. "You might not be able to sell your property at the 20 percent above what you purchased your property for a year ago, however you would be able to obtain a two-bedroom at a significant discount from 2008, 2007 pricing."

The Ahrens were originally looking to buy, but aside from being uncertain about the market, they did not find anything they loved. They feel that renting allows them to test drive a new neighborhood, where they may look to buy in later on.

Latigona recommends trying to negotiate the out clauses in the lease, so that if you find something to buy, you can easily make your move.

 

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