Co-op boards are rejecting buyers with increasing frequency, and according to New York Magazine that may have something to do with the bargain prices on apartments during the downturn.
Though there’s no formal tracker of board rejections, there were 53 broken co-op contracts in September, 70 percent more than in August and the highest monthly total this year, Streeteasy.com data shows. In fact, there have been “remarkable” year-over-year increases according to New York Magazine. On the other hand, 19 condominium contracts were broken in September.
While there’s no proof that the broken contracts are directly connected to price — an earlier investigation into the Dakota alleged race was a deciding factor — insiders note that co-op boards have become increasingly concerned with “dollars per share” appraisals, which are based on recent sales, and pricing minimums meant to ensure apartment values, also largely deduced from comparable sales within the building, are kept at a certain height.
“No board will ever confirm it, but I do believe that I’ve seen cases where deals were rejected because the price was not high enough,” said Barak Realty President Barak Dunayer. “If the price is too low, that becomes a comparable.” [NY Mag]
