It’s no secret that condo sales have soared in recent years, while co-op sales have sagged. A century after it was founded in Brooklyn’s Sunset Park, is the non-profit housing cooperative movement ready for its obituary?
The numbers certainly suggest that it is. Since 2000, according to the Real Deal, a mere 75 co-op plans have been filed in New York City, compared to more than 6,000 condo plans. Co-op conversions have become so rare that a recent one in Queens made the New York Times. And the difference in values is staggering: in the past decade, median co-op prices have inched upward by 12 percent, to $755,000, while median condo prices have mushroomed by 52 percent to $1.5 million.
A handful of co-ops have turned into condominiums, and a few have dissolved their corporations and sold their buildings. Most real estate buyers today prefer to avoid the scrutiny of co-op boards while enjoying the ownership of real property and the freedoms afforded by condos, especially when subletting or selling. Indeed, one in five condos are now sold to investors.
“We are seeing a great shift in what home-buyers want,” Kirk Henckels of the brokerage Stribling and Associates tells Forbes. “Condos allow for a more immediate buying process, and many of these ground-up new developments and conversions are full-service buildings with elaborate gyms, high-tech amenities, and on-site daycare and spa services. Co-ops are finding it harder and harder to compete.”
And yet, the disparity in price between co-ops and condos may be the very reason why it’s premature to write the co-op movement’s obituary.
“On average, co-ops are a more affordable option than their newer condo counterparts,” says Elizabeth Ann Stribling-Kivlan of Stribling and Associates. “The path to buying in a co-op building can be more arduous, but the value might be worth the wait if buyers are willing to make a commitment. However, times are changing, and co-ops will need to find ways to change as well, but they’re certainly not passé.”
True. Despite their recent decline, co-ops still account for 70 percent of Manhattan’s owned housing units.
Thinking of buying a co-op or condo? Already bought, and not sure how co-op/condo life and rules work? Learn all about purchasing a place and living in your new community. It's not like renting, and its not like owning a house. What's it like?