If you follow our newsletter, blog, and other content, you’ve likely seen us mention condos leading the board for demand over the past few years…what about co-ops?
Many are unfamiliar with the different property types in New York City, most notably condos and co-ops. There is a seemingly endless debate of pros and cons of both, but there is a new interest in co-ops emerging as a result of the pandemic.
To set the stage what is a Co-Op?
A Co-Op, short for Cooperative, is an ownership interest in shares of a corporation that own the cooperative. The number of shares owned is directly correlated to the size of the apartment in the building. These shares entitle the shareholder to a proprietary lease on the unit.
To contrast, a Condo represents ownership in real property so there is a big distinction in ownership interest between the property types.
As a Co-Op owner, you are responsible for monthly maintenance fees which typically includes property taxes as well as items such as the building’s mortgage and interest, insurance, management fees, building employee salaries, and common area upkeep.
Co-Op Appeal Increases During Uncertainty
With Condos being the leading star for many years, what is making Co-Ops appeal to more Buyers than usual? The pandemic has actually positioned aspects of Co-Ops that previously put Buyers off as a positive amidst uncertainty.
Co-Ops are notorious for their strict vetting process and Boards. In times of uncertainty, this becomes attractive to Buyers. Co-Ops typically examine a Buyers credentials and finances with a fine tooth comb, ensuring they have enough liquidity to continue to pay their mortgage and maintenance charges despite and unforeseen circumstance.
In hard times, you are less likely to find a Co-Op owner that passed the Buildings Board vetting to be defaulting on a mortgage. In turn, that means less risk of assessments and hits to the building’s financials.
Some Co-Ops are loosen their once very strict rules as Buyer demographics are shifting. This includes some allowing pied-a-terre purchases as well as increased financing limits.
This trend is not new, in fact, we saw a similar attraction to Co-Ops during the Great Recessions of 2008. It is important to note that there are Co-Op buildings that have survived the Great Depression, World Wars, and 9/11 - some of the toughest times economically.
Upper East Side Co-Op On the Market
315 East 72nd Street, 10C
Located in the heart of the Upper East Side, this rarely available oversized one bedroom 1 bathroom co-op apartment is your chance to live on beautiful East 72nd Street. This fully renovated, bright and airy apartment is a great value in a full-service co-op building.