We’re spending the first week of Curbed University’s fall session breaking down the inventory in the New York housing market. Today, some thoughts on the joy and pain of buying new.
We spill a lot of ink on these pages on new developments. Can you blame us? They’re shiny. And for most of this decade, they’ve been rising and selling at unprecedented rates. One-third of all sales in New York City were in new developments during the second quarter of 2008, according to Halstead Property.
There are obvious perks that come with moving into a brand new unit. For starters, everything inside is almost definitely going to be new? the appliances, the fixtures, the paint. Nobody’s going to have sullied your toilet or shower (except
maybe probably the plumber who installed them). The oven will be under warranty. The wiring won't be frayed.
Your new building may also be equipped with amenities that developers of old buildings didn’t even know existed. It’s hard to believe that there was a time when pre-installed Bang & Olufsen audio-video systems didn’t come standard, but it’s true. Same goes for roof decks, tricked out gyms, and media rooms. You may even have a say over what goes in and where.
There's also the allure of being able to say you were first. That's especially true in today's star-driven building culture. Announcing that you've closed on a triplex in the newest piece of starchitecture is a cocktail party trump card akin to declaring that your kid just got into Dalton.
Finally, as we discussed on the first day of class, most new developments are condos. That means you're not going to have deal with board approval, and you'll probably have fewer restrictions if you're thinking of packing up and moving to Long Island someday. (Of course, co-ops have their own set of advantages?Wednesday's lecture notes are online. And Long Island has its own set of problems?not to be covered this semester.)
But all of this newness doesn't come without a fresh set of challenges. First, there is the waiting. Results will vary, obviously, and a lot depends on how developed the building is when you sign on the dotted line. But you can almost always count on not moving when you thought you were moving in. That means you're going to have rent or move in with your mother or shack up at Essex House.
“The construction always takes longer," says a friend of Curbed who recently bought in Soho. "Everyone I know has had to go into temporary housing or get a rental."
Those delays won't just disrupt your sleeping habits. You're going to have to get a mortgage at some point, and only God and the general contractor know when that point really is. Got a chance to lock in a low rate through November? That's great, unless your closing gets pushed to June. Of course, you won't be the first to deal with this scenario, and you'll get a new rate, but it's going to throw your spreadsheets out of whack and may cost you a few dollars.
Once you're in, you may also become closer to the building's construction crew than you thought you might. Just because a building is move-in-ready doesn't mean that it's done. Early adopters will likely deal with some hammering in the morning and tarps in the evening. And those who don't awaken to the sound of hammering may wonder why. Our Soho buyer says her building's sponsors (sponsors own the buildilng, developers build it, marketers sell it; a three-part attack, another joy of new-development buying) lost some steam once the building had its temporary certificate of occupancy. Promised features stalled and the condo board spent hours looking for resolution.
That brings us to the strong chance that something in your apartment won't quite live up to expectations. If you came in early enough, you may have only seen the model apartment?or, worse, renderings. Computer-aided design, it's some dangerous shit. Additionally, offering plans will say things like "Sub-Zero or equivalent." You may get the Sub-Zero, but you may also have to decide just how cool you are with "equivalent."
Last but not least, there's the inevitable reality that today's new development will turn into tomorrow's old development. That may affect your cocktail-party confidence, but more importantly, it may affect your resale value. Our Soho-buying friend says she bought in her new dev with an eye toward what else was going up in the neighborhood and whether the floorplan would have lasting appeal. That's good advice here, and always.
It's Friday afternoon, and we're ready to open this lecture up for class discussion. More good advice from those who have played in this arena in the comments, please.
· Curbed University [Curbed]