Jackson Heights Life

Sometimes it's as simple as knocking a wall through; other times....not.

 Sometimes co-ops are fine with it, other-times...not.

It's not as simple as just buying two places, that's for sure

https://www.cityrealty.com/nyc/market-insight/features/get-to-know/combining-apartments-nyc-6-things-you-should-know/36202

https://www.brickunderground.com/content/how-much-does-it-cost-combine-apartments-new-york-city

e.g "New Yorkers are only permitted one kitchen per apartment—although an exception may be made you have a letter from a rabbi saying that you need a separate, kosher kitchen."

If they wanna sell it as one apartment that might get tricky.

Armen, I wonder if you can comment on appraisals. Are properties appraising below pre-pandemic levels, and if so, by how much? Thanks for your perspective.

Hi everyone,

It's hard to speak about the market as a whole now, but I can speak from direct experience with our own Jackson Heights portfolio.

Recently, most (not all) our properties traded with a 20-30k discounts in comparison where they would have traded before the pandemic. They all started listed at pre-pandemic prices. Some sellers also adjusted pricing in 20-30k range. As more properties sell and come on/off market, we will be able to tell IF we are on continuous downward trajectory OR the 20-30k range is the extent of the COVID era market correction.

Ahead of us are elections, hopefully a vaccine and what will ultimately be the post-vaccine economic report. These are all moving parts that based on outcome, will move the market needle.

Sorry, got cut off and had to repost:

Armen, I wonder if you can comment on appraisals. Are properties appraising below pre-pandemic levels, and if so, by how much? Thanks for your perspective.

Hi carrefour_ny ,

Just saw this, looks like you asked a couple of days ago. Happy to answer.

Appraisals really are divided into purchase appraisals and bank refinance appraisals. In a purchase it's a bit simpler, because in a purchase we have a contract price, which the bank appraiser must justify by comps and agree with contract price value. In refinance appraisals, the value is pulled through a "lottery" of similar comps. I find refinance appraisals to be far more conservative than purchase appraisals.

One very important point: It's important not to mistake an appraiser's price opinion for market value. Only buyers' value perception drives the actual market value of an apartment.

Since most of last 6-12 months sale closings are of units that entered contract PRE covid, those comps are very healthy and do not reflect the impact of the covid dip. As more post covid deals close, harder it will be to drum up comps as values begin to rise again.

I am wondering however, what position lenders will take on comp properties that went into contract and closed during the pandemic. If they will look at them at face value, or factor in a credit for pandemic era dip. I think that will depend on how soon we will see a rise in prices after end of the pandemic. If say pandemic ends and prices remain unchanged for another year or so, then those comps will likely be taken at face value.

Globally, for now, I can say that we don't have underappraisal concerns on properties that sell at a slight discount during covid. Those prices are easy to justify due to past 6-12 month closings.

I hope this is helpful.

Warmly,
Armen