Sales expert sees co-op market uptick

Real Estate Weekly, April 20, 1994

Activity in the city's co-op and condominium market has turned a bit more frenetic as buyers turn anxious to close sales before mortgage rates rise further, while asking prices in some market segments have firmed, reports Karen Berman, vice president/director of sales for The Argo Corporation.

"The economy remains the market's strongest dynamic," observes Berman, who reports:

* Renters are entering the market in significant numbers, enticed by 10-year low co-op and condo prices, low interest rates and the general sense prices and rates are due for a rebound soon.

* There are two classes of co-op buildings. those redlined out of the mortgage market by banks because of heavy sponsor ownership positions, and those with nearly all units occupied by shareholders. These lending practices artificially lower prices in the many co-op buildings with sound finances and fiscally-secure sponsors. While this lending unorthodoxy can't last much longer, it creates bargains today for savvy buyers who do their homework.

* Reversal of fortunes: some coop/condo owners are downgrading, selling their apartments and becoming renters, because they've been hurt by the regional economy.

* More people. especially relocating executives, upwardly mobile Wall Streeters and newlyweds are actively looking to invest in Manhattan.

* Some outer borough neighborhoods such as Forest Hills remain a tough sell, primarily because of "too much product on the market. "

* Space conscious "bargain hunters" are toting tape measures, giving scrutiny to square footage comparisons.

"It's a market where opportunities abound," says Berman. "This is an excellent time to trade up - one can buy a larger residence at a low price while interest rates are still down - and be positioned for the next round of price inflation, which is inevitable. "

"It is a mistake to downgrade," says Berman. "Granted, the employment picture gives some people no other option, but selling now is the equivalent of giving up on the stock market in October 1987 or on New York City in 1975. Prices will rebound, and the smart money understands the concept of market timing. "

The Argo Corporation provides complete residential and commercial sales, management and leasing services to building owners, cooperative corporations, condominiums, individuals and corporations throughout the New York metropolitan area.