About the US real estate market in an interview “RBK-Real Estate” tells the managing partner of EVANS Anna Levitova.
What is the main feature of the New York real estate market?
The real estate market in New York is significantly different from the Moscow one in complexity, a wide variety of types of real estate and an abundance of rights and encumbrances, which are associated with a particular property. The buying process itself is organized differently. – in each transaction, in addition to agents on the part of the buyer and the seller, lawyers are involved, specialized in real estate transactions.
New York City buildings are divided into three main types. Most are cooperatives – non-profit organizations, which are made to own and manage houses. In such houses, apartment owners register ownership of it., and own shares, the number of which corresponds to the size of the apartment. Depending on the share of shares, the costs of maintaining the building and votes are allocated to solve the main issues of life at home. To buy these shares, you need to present a number of documents, US tax returns, and also openly and in detail about yourself. To join the co-op, or, as it is usually abbreviated, coop (cm. link to “New York Realtor's Dictionary” at the bottom of the page. – RBC Real Estate), you must have income in the United States. Moreover, high demands are placed on future tenants – cooperatives can refuse any person, who is applying. AND, although New York has very strict anti-discrimination laws, if your neighbors don't like you, you can never join a cooperative. The path to these buildings is practically closed to foreign investors. Moreover, local investors also cannot buy apartments in cooperatives – in most of these buildings it is allowed to rent out apartments only after two to three years of own residence.
Another type of buildings – townhouses, three to five storey buildings without an elevator, but with beautiful facades, which were previously used for the life of one family with a servant, and then they were mainly divided into several apartments, occupying a whole floor or half a floor. Sometimes these buildings are sold entirely. Depending on the location, they can cost from 5 to 20 million dollars or more in more prestigious areas.
In addition to the above, the difference between the real estate market in New York and Moscow is associated with the cost of apartments. For example, in Manhattan (because, when we talk about New York, we mean it), prices for a one-bedroom apartment here start around 550 thousand. dollars. Moreover, it is enough to have 50% the required amount in cash – the rest of the funds can be obtained as a mortgage loan. It's easy enough for an investor to get financing.
Why are you only talking about Manhattan? In other parts of the city, Russians do not buy real estate at all?
Of course, buy. Just if we are talking about investments, then people are interested in the possibility of easily and guaranteed rent, what did they buy, and receive income. This also applies to residential, and commercial real estate. And most often it's about Manhattan, because it is popular and prestigious.
Regions of interest for Russians – it's mostly New York, California and Florida. In other regions of the United States, Russians buy real estate due to some private interests. there is, eg, some number of "oil Russians", who work in Houston and buy real estate there.
you said, that the American market is incomparably open compared to the Russian. Information. In Russia, let's, it is impossible to understand, what a person owns and where he lives. How our compatriots react, when faced with such openness?
Very painful, do not want to tell anything about themselves. If a Russian has the opportunity to buy real estate for cash and there is no need to disclose significant information about himself, the, usually, he buys real estate in the name of the company and provides a minimum of information about himself.
And other categories of clients come from agencies from Russia? People, who are interested in other real estate, not so expensive?
Less than half a million dollars is hard to talk about. We have a number of people, who are considering small Brooklyn apartments for their own residence and do not intend to rent them. There is a small category of clients – people, who get something for 100-200 thousand. dollars in Florida. There, for this amount, you can buy an apartment in a new house on the ocean, but there are a lot of such apartments. Supply exceeds demand many times over, most apartments are resold by banks or borrowers, who can no longer pay on the loan. All this, usually, big risks. You risk, that neighbors will not be able or will not be able to pay the bills for the maintenance of the house, and you have to pay for them, that the building will not have enough money to pay for its own maintenance: elevator operation, garbage collection, etc.. Florida – still a dangerous place.
How much do real estate services cost for Russians?
The USA has a very effective system of organizing the brokerage market: the seller pays the broker's fee, and this reward is split in half between the buyer's agent and the seller's agent. Standard remuneration – 6%. I.e, Russians will start paying their realtors only then, when faced with the need to sell their property. In the case of a purchase, you only need to pay for the services of a lawyer. In New York City, eg, you cannot buy real estate without a lawyer, and in Texas – can. But we do not recommend that people buy real estate without a lawyer and tax advisor anyway..
What are the requirements for Russians to real estate in the United States??
Russians in New York, as in Moscow, prefer new buildings to old ones. Talking to a native New Yorker, then he will say: “I want to live in a pre-war house with high ceilings”. It's like living in Moscow in a pre-revolutionary house with wooden beams., without underground garage, but with real stucco, with a beautiful facade. These are the houses that real New Yorkers want to live in.. And Russians in New York prefer new buildings with a marble staircase, with underground garage, with pool and services. That is, Russians want something new, do not appreciate the historical interior, building history, very rarely interested in, what was there before, but appreciate design, view and location.
Is there a reverse demand for real estate?
There is a reverse demand, but he is exclusively Russian. Lives in New York 800 thousand. immigrants from the Soviet Union. Among them are Muscovites – Russians, who have some real estate left in Russia. These people need to inherit, to manage, sell, rent your property, that's why they turn to our specialists. On demand among Americans without Russian roots… Potential tenants came to us for consultation several times, considering the possibility of moving to Moscow, and not once – potential buyers. Due to the growing risks in the Moscow real estate market and high prices, when for a million dollars you can buy an apartment of the same area in Moscow, and in New York, most people choose New York as an investment destination. But those foreigners, who still buy apartments in Moscow, are not real foreign buyers. These are the people, who have been living and working in Moscow for a long time (from 1992-1993 years), and it is already difficult to call them foreigners in the full sense of the word – Moscow is their place and center of life.
Interviewed by Ignat Bushukhin
RBC Real Estate
A source: prian.ru