One common questions asked by our investor clients about
property is the price decline during the past recession.
Strict Coop Board Reviews
About 70 percent of property in
are cooperative buildings which means buyers have to undergo board
reviews. These boards only approve if
the buyer shows financial strength, among a list of other things. The coop board review process hence make it
less likely for a highly leveraged buyer using teaser mortgage rates to
purchase an apartment. A lot of
foreclosures in the U.S.
were driven by borrowers who used mortgages with low teaser rates and who would
not have been able to afford the property once the teaser rate period ends.
High income, high credit
Given the median price of around $850,000 back in 2009,
is about 4.5X the price of the median U.S.
single family home. Buyers able to afford in Manhattan
hence have higher income and usually higher credit scores, which the banking
industry define as prime borrowers and hence lower likelihood of default.