By Max Gross
The most painful words to any veteran of the New York real estate scene might be “if only.”
If only we had known Park Slope was going to gentrify; if only we bought that two-bedroom in the Village in 1973; if only we hadn’t read all those Eloise books . . .
Real estate is just as full of the missed opportunity as the bad investment.
“You hear those stories from your grandparents,” Cem Onur says and laughs.
Onur and his wife, Ozlem, think this is one of those coulda-woulda-shoulda moments. The market is depressed. Mortgage rates are low. Sellers are eager to make a deal.
If that doesn’t sound like a buyer’s market, nothing does.
“This is going to be the lowest point in, let’s hope, the next 20 or 30 years,” says Onur. “I don’t want to wait until two or three years down the line when I say, ‘Goddammit! I should have bought!’ ”
Over the past six months or so, the Onurs have been among the many first-timers wading into the real estate waters.
The Onurs are a new breed of first-timer buyers — they don’t have a Wall Street bonus burning a hole in their pockets, and they’re not looking for an investment on which they can also hang their hat. The idea of real estate prices going up, up, up has died — so buying for the first time is now all about finding a suitable home where you plan to stay awhile.
“You have to buy something you love,” Onur says.
And with help from Prudential Douglas Elliman broker Nicole Galluccio, Onur found what he was looking for: a two-bedroom penthouse across the street from where he is currently living in Carroll Gardens. He’s buying the 1,200-square-foot condo for less than $900 per square foot.
“Overall, my first-time buyers are very interested in the fact that they can buy a two-bedroom for about $1 million,” says Corcoran Group broker Karin Posvar-Picket. “Most of the first-time buyers are looking at junior fours and two-bedrooms under $1 million, or right at the $1 million market — they’re sensitive to the mansion tax” for properties over $1 million.
But that doesn’t mean there aren’t plenty of others first-timers on the hunt at a lower price point.
“Interest rates are so low, it’s ridiculous,” says Jennifer Marrero, who signed a contract on a 710-square-foot, one-bedroom penthouse co-op (with another 326 square feet of outdoor space) at Embelesar 118 in East Harlem this week for $422,260.
Marrero, who worked with Corcoran Group broker Dianne Howard, had been daydreaming about buying a place for a long time. But she was waiting for something that was priced right in East Harlem, her childhood home. She spent years surfing real estate Web sites before she found Embelesar 118: “The price was right, and the building was amazing.”
And Marrero is certainly correct about mortgage rates, which earlier this week were hovering around 4.625 percent for a 30-year fixed loan. In addition, while the loan process was a total nightmare last year and much tougher just months ago, many of those who spoke to NYP Home report a somewhat different atmosphere now.
When Halstead Property broker Gerard Splendore began working with Yukiko Iikura and her husband, Takeshi, the couple was looking for a property that cost less than $500,000 — but they were surprised to get pre-approved for a mortgage of more than $600,000. (The couple is staying conservative and looking in the mid-$500,000 range.)
“You just have to get through the paperwork,” says Yukiko.
Of course, a lot depends on where you’re buying, what your price range is and how your building looks to banks. (Other first-timers, like the Onurs, report that the bank paperwork is still a draining, seemingly endless headache.)
“Just because a building is accepting 90 percent financing doesn’t mean that’s what you’ll get,” says broker Daniel Silva of Halstead Property.
“When I initially started, banks were insisting on 25 to 30 percent down” for a jumbo loan, says Sean Gardner, who, with his wife, Tiffany, just bought a three-bedroom condo in Harlem’s new Livmor building.
He started looking in May, but he’s since seen banks ease up and ask for only 20 percent down.
The biggest question for the first-timer (and everyone else, for that matter) is whether the market has reached bottom. It’s no surprise that every first-time buyer NYP Home spoke with believes the market is poised for a comeback.
Prices “seemed to be a bit higher than what I expected,” says Alex Ross, who, with his wife, Diane Pollack, has been on the lookout for a two-bedroom with outdoor space for the past couple of months. (They’ve been searching with Silva on a budget of between $700,000 and $1.2 million and looking in Manhattan, with a preference for TriBeCa, Battery Park City, SoHo or the West Village.)
“It doesn’t seem like anyone is running for the hills and taking whatever they can get,” Ross says.
But that doesn’t mean sellers aren’t negotiating. Not too long ago, Dawn and Sean Blachar, two first-timers who are working with broker Lisa Silberstein at Fox Residential, wandered into an open house for an Upper East Side two-bedroom listed for $975,000.
As Dawn remembered it, the place was a wreck. The kitchen would need to be gutted, and the owner had let her cats run riot on the floors and walls. When the sales broker asked what she and her husband thought of the place, Dawn gave an honest answer. “Frankly,” Dawn said, “this place needs a lot of work.”
Dawn asked if the seller was open to negotiation and, to sweeten the deal, offered to put one-third down in cash. The broker stepped into the other room with the owner of the property and came back a few moments later: The seller would take $925,000.
The $50,000 discount was enticing — but the Blachars finally decided they weren’t prepared for a long and costly renovation.
When they saw an ad for the apartment a few weeks ago, they noticed that the price was now $915,000.
“I think the bottom is close to being hit,” Dawn says. “The market is close to being back. The bottom is near. We are probably going to buy in the next five to six months.”
Thursday, July 15, 2010