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Manhattan Housing Crisis Claims People With Millions In Cash, No Need For Mortgage As Victims

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In recent times, when one spoke of housing crises and victims, it was generally in reference to those who'd found themselves homeless due to foreclosure proceedings; those who'd seen the value of their homes cut in half; and those who were not in default but nevertheless had a lock put on their front door, all their earthly possessions confiscated, and their best friends kidnapped due to a trigger-happy bank that, for the record, never apologized for setting off a chain of events that resulted in a person needing to be prescribed anxiety medication for emotional distress.

These people, with all due respect, have no fucking clue what it means to suffer.

In fact, they got off easy compared to the group profiled by Bloomberg today. A group of apartment-seekers who, despite being armed with loads of cash, have seen door after door after door slammed in their collective face. A group whose story shines a light on what it really means to feel real pain.

They are the multi-millionaires of Manhattan, many of whom already own homes and are simply seeking second or "weekday" pads, and this is their story.

With $1 million to spend and no need for a mortgage, Laiyan Wong expected to be able to easily buy a two-bedroom apartment on Manhattan’s Upper West Side. What she didn’t anticipate was how much competition she’d have. Wong viewed more than 10 apartments in two months, gradually increasing her budget to $1.5 million as it became clear that others were looking for similar properties amid a plummeting supply of homes in her price range. “I made four bids and was outbid each time,” said Wong, a trader at an investment bank, who eventually got a mortgage and paid $1.6 million for a condo that was about to go under contract to someone else. “You have to be willing to make a decision in a few minutes and overpay the asking price.”

Manhattanites with budgets that would buy mansions in most of America are discovering it’s tough to find even a two-bedroom apartment in New York as the inventory of homes shrinks. The number of available units for less than $3 million -- those generally considered nonluxury -- has plunged by the most on record, creating a shortage that’s unlikely to be alleviated any time soon as developers focus on ultra high-end condos that have set price records by wealthy investors. The lack of supply is encouraging homebuyers to seek out properties in Brooklyn, driving prices in the neighboring borough to a record in the second quarter. It’s also spurring bidding wars in Manhattan that particularly hurt those dependent on a mortgage, according to Jacky Teplitzky, a broker at Douglas Elliman Real Estate. Fast-rising home values mean the appraisals that lenders rely on to finance a deal are always out of date, she said. Some purchasers are agreeing to complete a deal even if they can’t get financing. When she represents sellers, Teplitzky requires buyers who waive a mortgage contingency to prove that they can handle the full cost in cash.

Wong, the bank trader, was among those who agreed to waive a mortgage contingency in addition to boosting her price range. She began looking in April for a two-bedroom apartment with room for an office, seeking to find a weekday apartment closer to the Upper West Side high school her son will attend in September. After four unsuccessful bids, her fifth try was for a three-bedroom condo on West 98th Street near Riverside Park, listed at $1.4 million. The seller had already accepted an offer and sent a contract to the potential buyer. Wong won the unit by bidding $1.6 million and pledged to sign a contract within a week and complete the deal in a month. She closed in June.

Really puts things into perspective, doesn't it?

Manhattan Homes Under $3 Million Never Harder to Buy [Bloomberg via Heidi Moore]