With concern furrowing their brows, buyers often ask how many apartments are on the market in a building in which they are mulling a purchase.
I suppose it is a fair question, but the problem is how to assess the answer. How many is too many?
The short answer is that there is no short answer.
Is 1 percent a lot? 5 percent? 10 percent?
The only rational way to analyze the proportion is to consider the following:
- The state of the housing market. If it is stagnant, of course the percentage will be high as those homeowners who need to sell keep trying to do so. How does the number of available units compare with other buildings?
- Issues in the building. A knowledgeable broker can be helpful. Some of the most reliable information possibly may be unearthed in board minutes.
- False information. If someone saw a bedbug vehicle nearby, that development could send forth a flurry of possibly unfounded rumors.
- True information. There may have been a scourge of varmints long since successfully obliterated.
- A difficult co-op board that keeps turning down prospective purchasers for questionable reasons, including a desire to maintain unrealistically high price.
- A contentious or lazy board that is riven with dispute or taking a laissez-faire approach to its responsibilities.
- Poor property management.
- Excessive maintenance fees or common charges.
- Incompetent brokers who fail to price units, market them well or both.
- Obstinate sellers, who insist on irrationally high pricing.
The list is not exhaustive.
Virtually none of the foregoing applies to new developments, which have their own issues, especially for a buyer who needs financing. That’s because lenders demand minimum percentages of owner-occupied units.
Otherwise, you get the idea: There is no rule of thumb, no firm answers about how many available condos or co-ops are too many.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022