Thursday, March 10, 2005
Rich but not by New York standards
Bizarre challenge for anyone trying to buy a co-op apartment in New York City (I wonder if they're beginning to see the same thing happen in San Francisco which also has a few co-ops in Pac Heights and Nob Hill etc.). According to this New York Times story (registration required), more and more co-op boards are using the lack of inventory to either refashion the building's reputation or continue to apply a formula that may not make as much sense any more:
"Take an average $1.5 million classic six apartment on Lexington Avenue," said Kathy Braddock, a partner at the real estate consulting firm Braddock & Purcell, which matchers buyers with agents. "To buy there, you have to put 25 percent down, and then they want to see $1 million in liquid assets, plus earning power. Most people have not saved $1 million in liquid assets if they are in their mid-30's or early 40's and don't have a job with huge bonus potential."
...The zeal to avoid a turndown can trigger perplexing results. Klara Madlin, president of Klara Madlin Real Estate on the Upper West Side, recently helped a banker and a doctor buy a $3 million Riverside Drive apartment. They wanted to pay cash, she said, but Ms. Madlin advised them that "the board would rather see liquidity and a mortgage." The couple wound up financing half of the price with a mortgage, with the option of paying it off after the closing. "It's kind of crazy," Ms. Madlin acknowledged.