Certain buyers are drawn to certain homes. And some properties are more universally appealing, being a bit more generic, like 1-bedrooms or Studio units.
In some cases, having a limited audience can be quite challenging when it’s time to sell. I am seeing 5- and 6-room apartments have an increasingly limited audience. But in this case, rather than causing an oversupply, there seems to be an abundance of pied-a-terre and empty nesters filling them. In some ways, this is terrific, but in other ways it is somewhat concerning for sellers now and in the future.
300 Riverside Drive, a Perfect Pied-a-Terre
First, let’s make sure we’re clear on what 5-room or 6-room means. These are the apartments that are 2-bedrooms plus dining room, or 2-bedrooms, plus dining room AND a maid’s room.
They are generally 1200-1800 square feet, and have two full baths. Once they are of this size, their building charges are generally over $2000/month, and with 6-room apartments, can easily get to $3000/month.
It’s easy to see why they would appeal to a couple without any full-time little ones in the house. These apartments provide enough space for two, two baths, with room to entertain.
But looking at the details, things can get complicated quickly and buyers can get turned off just as quickly. Is the second bath inside the maid’s room? Is the second bath off the kitchen? Does the building allow washers/dryers (see this month’s video)? Is the maintenance above $3000/month? What are the views from the apartment? Does the building allow pets?
This profile of buyer wants a washer/dryer in the apartment. They are often coming from either a bigger apartment which allowed them as they were raising a family, or from a house which definitely had a washer/dryer. They want the comforts to which they were accustomed in that house. They want to bring the dog. They want to have the entertaining space, and room to breath with their significant other around. They want the monthlies not to be exorbitant, and some light as well.
If there’s something quirky with the apartment, if there’s something missing, this audience, which is incredibly qualified and excited to begin a chapter of life in this new apartment in the city, will simply pass on it and move to something more appropriate.
And this is where the situation really worsens and where my concerns land. If pied-a-terre or empty nesters don’t want the apartment, it’s not clear who else wants to buy it. $3000/month maintenance feels expensive to a younger family looking to buy an efficient 3-bedroom. If the apartment is not in mint condition set up with a formal dining room, a 5-room apartment may do for them, where they can take the dining room and convert it to a third bedroom. But then the question remains about the location of baths and the size of the living space. If a family is looking to have two children, an apartment this size, the 5-room, that is- could get too small relatively quickly, if the parents want their kids to have separate rooms, and don’t want both bathrooms to be in the bedrooms, for entertaining purposes.
The 6-room apartments are a slightly different story. I’m seeing fewer buyers getting excited at the prospect of the maid’s room, usually off the kitchen, serving as a third bedroom. Parents feel it may be too small for little Johnny or Janie, and not well-located. And with the monthlies creeping up to $3000/month as I mentioned, many buyers get scared off. So it’s a matter of finding that balancing act of size, layout, and all the details lining up. It’s a tight-wire act, to be sure, or a real chance to lose one’s audience.
So, what to do? The obvious suggestion is to reduce prices. I don’t know that this is the simple solution, though.
Tastes are changing away from Pre-war layouts in many cases, while condo pricing is still well-above that of most buyers. This may leave many 5- and 6-room sellers holding the bag, or achieving prices that don’t make them very happy. It’s an interesting dilemma. I’m hoping that it gets clear in the coming years.