Co-op Vs Condo: The Smackdown Part I

Pro Coop:The Heroes of Housing Just Say No [NYTimes] 8/9/2006
"In California, more than 25 percent of new mortgages this year have been option ARM’s, up from about 5 percent in 2004, according to LoanPerformance, a mortgage data firm.

The main point of these innovations has been to sustain the housing boom by allowing a family that can’t really afford a house to buy it anyway. But clearly, this can’t last. Already, it has raised the risk of a sharp housing downturn and, eventually, of a recession. The Federal Reserve acknowledged as much yesterday by halting its campaign of interest rate increases.

So the housing industry is going to have to find a new business plan. Fortunately, there is one small sliver of the market — here in New York, as a matter of fact — that has kept its wits and can serve as a model. The trouble is that it’s not usually considered to be a model for anything. Indeed, it may be the most hated institution in New York."

Bottomline: Co-ops guard against buyers being overleveraged!

V.S.

Pro Condo: Secret Plan Feared to Tax Mortgages on Co-op Homes [NYSUN] 8/1/2006

"The new state law requiring public disclosure of the sale prices of coop apartments, signed by Governor Pataki last week, may be part of a secret plan to raise taxes a billion dollars a year by extending the mortgage recording tax to co-ops."

Bottomline: Buying a Co-op may soon be getting a lot more expensive in New York State!