CLICK THE MENU ITEM ABOVE FOR A MORE COMPLETE HISTORY OF THE FOLLOWING AREAS:
THE WEST VILLAGE: There is no neighborhood like the West Village (Greenwich
Village, the village). Its a diverse neighborhood that has a life of itself,
flowing with artists and musicians, and actors.
In the mid-19th century, however, as the city spread north of 14th Street,
the Village became the province of immigrants, bohemians, and students (New
York University [NYU], today the nation's largest private university, was
planted next to Washington Square in 1831). Its politics were radical and
its attitudes tolerant, which is one reason it became a home to such a large
lesbian and gay community.
ABOUT SOHO: Starting at Houston (pronounced how-ston) Street, walk south down Broadway, stopping to browse the stores and vendor stands between Houston and Prince streets. The sole remaining museum on the block is the New Museum of Contemporary Art, devoted exclusively to living artists. Within the Prada store at 575 Broadway, Dutch architect Rem Koolhaas has created a high-tech setting for the Italian house of fashion. Several art galleries share these blocks as well, most notably at 568 Broadway, which houses 10 galleries, and the trendy Armani Exchange store on the ground level.
ABOUT CHELSEA: As Broadway marches north and west across Manhattan it Chelseaforms a series of squares beginning with Union Square at 14th Street. The square itself hosts a popular Greenmarket, and before Christmas, a crafts market. In this neighborhood are some of the city's trendiest restaurants lining Park Avenue South up to 23rd Street. Madison Square, the site of the original Madison Square Garden, is dominated by the Metropolitan Life Insurance Tower and the Flatiron Building (20-stories and triangular). It was once the end of "ladies mile," the city's most fashionable shopping district along Broadway and Sixth Avenue; this area still has great shopping. To its east is Gramercy Park, a small, fenced park acessible only to residents of its surrounding townhouses. Theodore Roosevelt was born in this neighborhood.
Buyers lose deals, brokers scramble
Although real estate brokers aren't calling this a crisis, there's certainly some evidence of nerves. Stories abound of lenders who changed terms abruptly, canceled previous commitments or made final-day calls on loans that they had offered only two weeks previous.
"It's an absolute moving target, and you need to pay really close attention to every detail of the programs they are offering," said Mindy Feldman, a senior vice president at Halstead Property.
In one case, a bank changed its loan-to-value ratio (LTV), or the loan amount to capital down, on a commitment for an apartment seeker from 75 percent to 60 percent in just two weeks, said Feldman.
Two weeks ago, Feldman got a quote for a 30-year fixed loan for 8 percent,
to close in 60 days. "Then yesterday, they announced they are discontinuing
the program tomorrow," she said late last month. "Clients and customers
need to
be working with mortgage brokers who come highly recommended."
Klara Madlin, president of Klara Madlin Real Estate and the incoming 2008 president of the Manhattan Association of Realtors, said she had a client who made an offer on a property worth more than $1 million when they could get mortgage rates in the mid-6 percent range. But when they went back with a counter bid, the rate had gone above 7 percent. "They left it on the table," said Madlin.
But Madlin says the tightened credit market does not seem to be affecting sales prices in Manhattan, a view echoed by many real estate brokers who said prices are stronger than ever, with bidding wars still a frequent occurrence.
But lenders are taking a harder look at credit scores for prospective buyers. Acceptable FICO (Fair Isaac Credit Organization) qualifying scores for a plain vanilla 30-year fixed loan have risen from a qualifying 680 to 700 or 710 in some cases, brokers said.
Acceptable credit scores were increased for almost every single product being offered, and when buyers didn't make the cut, lenders and brokers said the loans got more expensive.
Steve Kliegerman, executive director of development marketing at Halstead, said he still has clients getting 90 percent financing if they have FICO scores of 670 or better, however, and he hasn't yet seen any deals falling apart because of poor financing.
The ratio of debt to income is also expected to be much smaller. A seven-year adjustable-rate, 30-year loan -- which adjusts after seven years to a higher rate -- for a well-qualified applicant is coming in at about 3 percent over the 10-year Treasury, or about 7.5 to 8 percent.
Banks are expecting 20 percent down, and customers "are being penalized 1.5 basis points to go above 80 percent [financing]," said Ladesou.
One client who came to Moskowitz for a loan on a $535,000 house had a low 600 FICO score and put $15,000 down. The bank offered the buyer an 11 percent rate, making the payments too expensive. "He could lose his deposit," said Moskowitz.