Making Do With Less
With single-family house prices on the rise, more home buyers find co-ops and condos are worthy options
BYLINE: By Laura Koss-Feder. Laura Koss-Feder is a frequent contributor to Newsday.
SECTION: REAL ESTATE; Pg. C06
January 31, 2003 Friday ALL EDITIONS
This is the first of two articles focusing on the co-operative and condominium market on Long Island and in Queens.
Gary and Elizabeth Yuen were determined to buy a home in an area that had good schools for their daughter, Emily, 4, who will be starting kindergarten next year.
The Yuens were living in a one-bedroom apartment in Elmhurst, renting for $895 a month. Gary Yuen, 45, a chemist with the U.S. Department of Agriculture, and Elizabeth, 39, a supervisor with a doctor's office, had spent three years looking at both single-family houses and condominiums.
Finally last March, they put a binder down on a town-house condominium in East Setauket. It was still in the preconstruction phase, but they didn't want to take a chance - the market was competitive.
To get the school district they wanted at a price they felt comfortable with, the Yuens ended up purchasing a $326,000 two-bedroom, 2 1/2-bath town house with den and fireplace at the 44-home Willow Wood development. They moved into their new home in November.
"It's always better to own your own home than to rent, and buying a condo offered us lower property taxes than a single-family house would have," said Gary Yuen, who works in Jamaica. "Also, there was no maintenance on the home, since you don't have to shovel snow or do gardening."
For the Yuens and thousands of other families on Long Island and in Queens, the high prices of single-family homes have made condominiums and co-operative housing an attractive alternative.
There were 2,276 condos and co-ops sold in both Nassau and Suffolk counties in 2002, compared to 1,185 in 2001 - a 92 percent increase, according to the Multiple Listing Service of Long Island. In Queens, 1,573 co-ops and condos were sold in 2002 - a stunning 137 percent rise from the 665 apartments sold a year earlier.
"The co-op and condo market will pretty much track the sales of single-family houses, which will all stay pretty consistent - especially with today's low interest rates," said Joseph Mottola, chief executive of the Long Island Board of Realtors Inc.
While many newly constructed condos and co-op developments can command healthy prices - from $300,000 to $400,000-plus - they are still often less than single-family houses in the same
Prices for existing condos and co-ops, too, are substantially less than for existing single-family housing in the region.
In Nassau County, the median sales price for co-ops and condos last year was $195,000, compared to $350,000 for single-family houses, according to MLS figures. In Suffolk, median co-op/condo prices were $180,000 last year, compared to $282,750 for single-family houses. And in Queens, the median co-op/condo price was $117,500 last year, compared to $294,500 for single-family residences.
At the same time, price appreciation for co-ops and condos have closely tracked single-family homes. In Nassau, median co-op/condo prices last year increased 21.1 percent over 2001 (12.9 percent for single-family houses); 21.2 percent in Suffolk (21.8 percent for single-family houses); and 17.5 percent in Queens (20.2 percent for single- family houses).
Buyers and real estate experts also note that while "handyman special" houses can easily start in the $300,000s, condo complexes tend to be newer construction and require minimal, if any, renovations.
"Other than painting, there are no renovations that I need for my co-op," said Anthony Piro Jr., 38, an information services manager who moved from a one-bedroom rental in Midwood to a $100,000 co-op in West Babylon in December. "I looked at single-family houses priced from $200,000 to $290,000 that were real fixer-uppers. I would have preferred a small house, but the prices were too high."
Piro was in the market for six months before finding his co-op. Along the way, he discovered that some condo town-house complexes, with an array of amenities, could be as expensive as single-family houses.
"I just kept looking," Piro said. "I was determined to own something."
Co-ops and condos also are in great demand because of their limited supply, especially on Long Island. Zoning restrictions have made it difficult to build high-rise buildings in many areas, resulting in a dearth of supply, noted Robert Campbell, professor of real estate and finance at Hofstra University.
At the same time, there is increasing demand, he said, from empty-nesters who want to move into smaller homes and the "echo boom" generation in their 20s and early 30s - the children of the baby boomers.
"The empty-nesters don't want their houses anymore," Campbell said, "and the young folks without kids don't yet need the space of a house and don't have that much saved up yet to be able to afford one."
Earlier this month, The Beechwood Organization, a Jericho-based developer, found that it had a waiting list of 800 families for a condo development of 137 townhouses in Kings Park - and it hadn't even begun to market it, said Beechwood partner Michael Dubb.
"The market is as strong as ever for condos," Dubb said. Although sales prices for condos have gone up by 20 percent in the past year, that doesn't seem to have deterred demand, he added.
Real estate agents also say that while low interest rates have helped boost the entire housing sector, continuing worries about the stagnant economy have helped co-op and condo sales in particular.
"Some of those who have jobs may be working harder than ever - doing the work of several people because of those who were laid off - and they don't want the burden and extra work that goes along with maintaining a single-family house," said Frank DellAccio, president of Century 21 AA Realty in Lindenhurst.
In DellAccio's area, condo sales were up by 15 percent last year and co-ops sold about 10 percent more than 2001. One- and two-bedroom co-ops sold between $80,000 and $120,000, he said. Two-bedroom, two-bath condos had price tags between $240,000 and $320,000. Three-bedroom, two-bath condos started at $350,000.
Condo town-home communities, which feature amenities like pools and tennis courts, were in the $400,000 range and higher.
"Young couples like the social aspect of a planned condo community, and they'll forgo the big back yard of a single-family house that requires so much time and effort to maintain," said Hal Knopf, president of Hal Knopf Realty in Oceanside.
Sales are so strong now that one-bedroom co-ops which went for $30,000 just three years ago are now being grabbed up at nearly $150,000, noted Marie Costello, president of Marie Costello Real Estate in Glen Head.
"Instead of renting, people are figuring that if they have to pay $2,000 a month, they're better off buying a co-op," Costello said.
Wanting to get more for his money and the desire to have a tax write-off were important factors in Dennis Shawah's decision to buy a Belle Harbor co-op.
"We had no choice; we were just paying too much in taxes," said Shawah, 53, a senior court officer in Manhattan who got married last year and plans to move from a Bay Ridge rental into his new home next month.
The newlyweds bought the two-bedroom, two-bath oceanfront co-op after seeing the apartment at an open house. Shawah said the market was competitive and the two wound up paying $30,000 more than they had originally planned. The couple had seen three other apartments, but felt they were too overpriced, given their overall condition.
Sales in the Rockaways, where the Shawahs bought their co-op, doubled in 2002 from 2001, said Annie Graves, president of Annie Graves Realty in Belle Harbor. Oceanfront two-bedroom co-ops have been selling from the mid-$200,000s to nearly $300,000. These apartments have monthly maintenance fees of about $1,000, with an additional monthly parking charge of $100. But this is still less pricey than the single-family homes in the close-knit community, which have been selling for up to $1 million, Graves said.
"People from Manhattan and Brooklyn want to be in this area on the water, and a co-op is a more affordable way to make that move," Graves said. "They're grabbing whatever such units are available."
In other parts of Queens, less expensive co-ops have sold well and continue bringing in buyers, said Walter Messina, owner-broker of Glenjay Realty in Forest Hills.
Co-ops selling between $90,000 and $110,000 have been particularly popular, while those in the $400,000 to $800,000 range have seen somewhat of a slowdown in the past two months, Messina added. Buyers in Queens also were looking for renovated apartments, and parking spaces.
"You have to put 20 percent down and some people may not have that kind of money these days for the more expensive co-ops on the market," Messina said.
But whatever the price tag - moderate or steep - the co-op and condo market seems poised to remain strong for the near term, experts say.
Says Steven Klar, president of The Klar Organization in East Meadow, which developed Willow Wood in East Setauket, "There is no reason to believe that it won't stay this way."
Laura Koss-Feder is a frequent contributor to Newsday. She may be reached via e-mail at email@example.com
NEXT WEEK: Handling conflicts at your co-op or condo
Prices on the Rise
Here is a coparison of median sale prices of existing co-ops and condominiums versus single-family houses.
2001 2002 Percent Increas
Co-ops/condos $100,000 $117,500 17.5
Houses $245,000 $294,500 20.2
Co-ops/condos $174,000 $195,000 12.1
Houses $310,000 $335,000 12.9
Co-ops/condos $148,500 $180,000 21.2
Houses $232,000 $282,750 21.8
Copyright 2003 Newsday, Inc. Reprinted with permission.