Or Foreclosures, Either
What jumped out at me reading “It’ Buildings of the Other Boroughs” in The NY Times was the high (financial) bar for entry:
“Mortgages are allowed, but only for half the purchase price, brokers familiar with the building said.”
“A recent sale in the building, which requires a 25 percent down payment . . .”
“The Kennedy House requires a 33 percent down payment. Buyers must also provide appraisals of certain declared assets, like jewelry or second homes.”
Besides character, location, and amenities, what makes each of the buildings discussed in the article a hot ticket is their reputation for being a good investment: when prospective Buyers have to be vetted by picky co-op boards and plunk down 25% or even 50% in cash, there’s little chance of value-eroding foreclosures popping up.
To be sure, there’s a bit of a virtuous circle operating: the buildings are in demand because they have high standards, and they can afford to have high standards because they’re in demand.
However, the implications for housing elsewhere couldn’t be clearer.
Namely, higher down payments = financial cushion = housing stability.
In fact, there appears to be a consensus growing among policymakers to hike down payments — albeit gradually — as part of any solution to the Fannie Mae/Freddie Mac morass.