Property Not Sri Thinker

If only Sidney Poitier could save the day.

The cliché of real estate was location, location, location. In the suburbs it is location, location, school district.

It appears the latter is becoming more prevalent in Manhattan as stated in this NYT article.

FOR some young families who bought during the housing boom, having it all meant an affordable brood-sized apartment in possession of a good public school zone. But other parents in pursuit of real estate never even thought about schools. They assumed they would send their children to private school, often because they too had followed that route.

That was before the economic crisis. Now, as many would-be private school parents scramble for a good public school, there is a despairing recognition that in this respect, geography is destiny: With odds of being accepted into a popular school in another zone slimmer than ever, they either live in a neighborhood with a decent elementary or they don’t.

Renters and first-time buyers are in the best position to light out for better school zones with their young offspring. Meanwhile, landlocked owners — unable or unwilling to sell in a down market or to spend around $33,000 a year to send their child to private school — are panicking.

Trapped by their real estate, these parents are swallowing a bitter pill: had they sold their apartments a year ago, their profits might have financed an entire private school education.

Some parents are considering renting an apartment in a desirable zone — at least for the time it takes to prove residency. And some otherwise law-abiding parents plan to flout the system by establishing a fake residency in their school zone of choice.
“I can tell you I hear it all the time on the playground — whether you’re moving or ‘moving,’ ” said Claudia Knafo, 47, a concert pianist and music professor who lives with her husband, Alexander Yagupsky, 44, and 4-year-old son, Joshua, on West 110th Street and Riverside Drive.

She says her family’s situation is common in her neighborhood.
“We bought our apartment in 2004,” she said, “and like most new parents we never even thought about the public school zoning issues. We just assumed our son would go to private school.”

But when it came time to apply last fall, she and her husband, a music teacher, felt they could no longer commit to the expense because of the change in the economic climate. They applied to three private schools asking for financial aid, even though they were advised by other parents that this would undermine their son’s chances. He was turned down by one and put on the waiting list at the others.

It all comes down to money or lack thereof. People do not have the liquidity they once had or they assumed they would and now they are between the proverbial rock and hard place. And they are looking at all their options.

Their anxiety mounting, Ms. Knafo and her husband are considering selling their two-bedroom co-op and moving into a zone with a more desirable school.
“We actually had a Realtor come to our home, because I was completely hysterical about what to do with this smart kid I can’t seem to find the right school for,” Ms. Knafo said. “We bought it for $570,000 in 2004 and she said we’re back at 2004 prices, so we might not necessarily lose money on it.”

Plan B, she said, is to sublet the apartment and rent elsewhere. A schools consultant, Robin Aronow of School Search NYC, advised her that by historical standards her son’s chances of being admitted to P.S. 87 were good if the family established residency in the zone by June 1. Given the waiting lists disclosed by a growing number of schools, Ms. Aronow now strongly recommends calling the school before moving.

But Ms. Knafo worries that the rent from their apartment won’t cover the cost of a new one. The median asking price for a two-bedroom rental in the P.S. 87 zone is $4,200 a month; in P.S. 199’s zone, it’s $5,450, according to Streeteasy.com.
“Basically,” Ms. Knafo said, “it’s like playing Russian roulette — are we going to have to pay for two apartments to get our child into the correct zone? There are lots of people who are borrowing addresses or moving in with family. I personally am not comfortable with that.”

As order ot qualify for residency so their children will be accepted to a better school even if there is no need for a second apartment.

And there will be more people borrowing addresses or moving in with family. In fact that is a very common practice in the suburbs. I knew one kid from my town whose family ended up moving to the Bronx while he was in high school. Rather than transfer him to another school, they borrowed an address from someone who lived in one of the the town’s apartment building to establish a residence. On paper the family were part of the community despite the fact he commuted from the Bronx everyday.

It was a well-known fact amongst his friends regarding this arrangement but no one ever ratted him out or perhapsno one cared. From what I know about the Bronx, I believe Bronx Science is one of the top schools in the area however it is more of the exception than the rule. Next door to Bronx Science is Lincoln high school, which is an institution that is more indicative of the Bronx school system. It is a well-known fact that Lincoln students will go shopping after school by preying upon Bronx Science students.

Why would any parent subject their kids to that type of environment? Why risk their kid’s future by having him take a test for a school that he may not get into? He had just 4 years to go so his parents probably figured it was best to create the façade of residency rather than deal with the trauma of starting over again.

What the family of a friend of mine did was to sawp the house. What happened was that one family moved in, established roots, then another set of relatives moved in, then the previous familywould leave and sell the house to the second set of relatives.

Some brokers say they’ve noticed a surge of interest in public schools from couples who don’t have kids yet and from childless people who are concerned about resale value.

“For the last 10 years people have made an extraordinary amount of money, so they have the cash to buy an apartment now, even with the setback from the stock market.” said Daniela Kunen, a managing director at Prudential Douglas Elliman, whose two listings on Park Avenue in the P.S. 6 zone are drawing significantly more traffic than comparable ones just north and south of the school zone. “However, they would prefer to get into an apartment that will provide their children with a free education so they can limit their expenses because they’re uncertain about the future.”

Karen Advocate-Connolly, a senior vice president at Prudential Douglas Elliman, said she had noticed a spillover from the highly regarded but pricey P.S. 6 zone. “It used to be very much P.S. 6, and now people are willing to broaden their horizons, like P.S. 290 and P.S 183. The buyers now are just very savvy, and they’ve done their research on the different schools out there. They at least want a public school backup — they’re looking for the option.”

Noah Bilenker and his wife, Valerie Abitbol, recently went into contract on a two-bedroom apartment costing around $1 million on Third Avenue near East 81st Street in the P.S. 290 zone. The couple — both lawyers who do not yet have children — chose that apartment over another on East 95th Street and Third Avenue solely because of the school.

“I think the change in the economy made us look for things in more established neighborhoods,” Mr. Bilenker said, citing a significant number of new condominium buildings in the more northern neighborhood.

The apartment they are buying is in an area with deeper roots, he said. “I think there would be more established parent-teacher and community groups, and if the city has budget problems and there are cutbacks among teachers, the more established schools with strong networks among parent and alumni groups will be able to weather the storm better.”

I will be honest with you. In real estate families can be a pain in the ass due to higher taxes and the fact that some kids can be really noisy and annoying. Their presence can radically change a neighborhood usually for the beter, but change it nonetheless. This is why families are the kryptonite of gay communities. All you have to do is look at Chelsea. It used to be a haven for the gay community and now the gay and lesbian populations have made way for the stroller set.

Even if I had no kids, I would still consider buying in a neighborhood with a strong school district. Even if I do not have kids or my kids go to private school, it would be to my advantage to own an apartment that area because there will be always someone who is willing to rent or buy it from me.

Real estate is all about added value. What makes one apartment more valuable than another? It usually comes down to the external obsolesce, whether the apartment is in a bad school district or near a gas station.

It doesn’t matter how much Italian marble you have or how much money you put into the kitchen. Sometimes buyers only care about how high the SAT scores are in that school district.

I don’t fault parents who take these extreme measures. It is a f**kin street fight out there and every parents wants their kid to be prepared the best they can to face the world.

Brian over at Propertyshark sent me the following links that give a more descriptive view of foreclosures in Manhattan and Queens.

These two maps point out the new foreclosures in these two boroughs and it is pretty f**king insane.

Here is Manhattan.

Here is Queens

The difference is night and day.

Here is additional information that was provided to me.

Key Takeaways:

-New foreclosures in New York City (869) were down 5% compared to Q1 2008 (918) and up 14% over Q4 2008 (764).
-Queens comprised 66% of foreclosures in New York City.
-Brooklyn saw a significant drop in new foreclosures, declining 74% compared to Q1 2008 and down 55% from Q4 2008.
-Staten Island had the highest rate of foreclosures per household in Q1 2009, with one in every 1,187 homes scheduled for auction, followed by Queens with one in every 1,343 homes scheduled for auction. The rate in Manhattan was the lowest, with one for every 43,059 homes scheduled for auction

What this says to me is that if you are a bargain hunter you will find many a deal in the Queens and Staten Island. However if you want have a Blue Chip state of mind, you will stick with Manhattan. You might have to pay a higher premium but just from this information alone it appears that the Island of Manhattan is a much safer bet.

Property Not Sri Thinker

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