The Average Condo Common Charges in NYC Are Increasing. Why?
Apr 18, 2023 brooklyn,Brooklyn Buyers,Brooklyn Buyers Agent,brooklyn real estate,brooklyn realty,buying a condo,Buying in Brooklyn,condos,finances,purchase property
Buying a condo in Brooklyn is an exciting time as the area keeps growing in popularity. We have said time and time again to expect the unexpected fees when you are buying in New York City. Realty Collective is here to give you the rundown on the average condo common charges in NYC that could affect your purchase in our wonderful Brooklyn neighborhoods.
What are Condo Common Charges?
Condo common charges cover many aspects of your living in a condo in Brooklyn. These fees include operating expenses like staff, repairs, amenities, property management, and insurance, which are mainly due to the cost of doing business in NYC. Experts are now warning that there are higher fees to come.
What’s causing Condo Fees to increase?
Experts say condo fees in NYC are increasing from as low as 4-6 percent to as high as 20-30 percent There are many factors increasing condo fees in NYC. There are three top culprits: inflation, energy, and complacency costs.
Heating oil costs are increasing significantly. For every 100 units that use number 4 fuel oil, the average cost was around $72,000 last year and has doubled this year to $150,000.
Repair costs are up too. Roof or HVAC units are seeing, in some cases, a 100 to 150 percent increase in the cost of the component and more in the cost of labor.
There are also new compliance costs from lenders and the state of New York that affect condo fees as well. A new lending compliance guideline set by Sally Mae and Freddie Mac states that condos are now required to establish a reserve fund for future repairs equal to 10 percent of the operating budget. Another factor is the green energy requirements of NYC local law 97. Costs add up when electrifying the building and replacing the boiler.
Condo Common Charges Are Increasing In Brooklyn – But Not As Much As in Manhattan
The good news, condo common charges may be increasing in Brooklyn but Manhattan is still more expensive. Brooklyn common charges are three times less, with an average of $0.56 per square foot compared to manhattan’s $1.49.
Why is this happening?
Experts suggest that Manhattan took advantage of tax abatements from the city, requiring them to employ a certain number of unionized members, like a doorman, while in Brooklyn, they are working with more modernized technologies like a virtual doorman system. This brings up another point: Manhattan’s buildings are older and require more repairs, while buildings in Brooklyn are newer and don’t require as much maintenance.
Another reason to #lovebrooklyn as much as we do 🙂
Finding Low Average Condo Common Charges
There are a few ways to find the lower average condo common charges. Our first tip would be to set filters on the monthly fees when searching online. You can do this on our Listings page. If you click more filters, you can put in a maximum monthly expense you’re willing to pay at the bottom. Another way to get lower condo fees is to live in a bigger building. With more units, costs become more spread out over time. Fewer amenities will lower the costs as well.
Our final suggestion is to get as many details as possible before closing on a property so you don’t get a surprise fee post-closing. Check to see if the building is following all guidelines, including local law 97 and lending compliances. Nothing is worse than finding out your building is on Fannie Mae’s “unavailable” blacklist. Unfortunately, as of August 2022, there are 25 NYC condos on the list.
Having a dedicated Buyer’s Agent can help you understand the full financial picture before getting to the closing table. Get in touch if you want some advice!
If you’re interested in learning more about the buying process, download our free Buying Into Brooklyn Ebook. We share a ton of valuable resources to demystify the buying process and help you become a Brooklyn home-owner.