Manhattan apartment: the price of a car?

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By SARAH RYLEY

NEW YORK CITY -- Amongst a handful of onlookers huddled around an auctioneer in the rotunda of the New York State Supreme Courthouse last month, a real estate investor placed the winning bid on an alcove studio for what seemed like the deal of the century.

The price: $28,000.

Yes, that's right, $28,000 for an apartment in a pristine Upper West Side co-op building across from the Museum of Natural History.

By comparison, a similar studio in the 100 West 81st St. building sold for $460,000 in 2005, the most recent comparable sale.

The shockingly low sale price -- more on par with a car than a Manhattan home -- was just $600 more than the amount owed on the apartment. In foreclosure auctions, banks generally set the starting bid, or "upset price," at the outstanding amount on the mortgage. The owner keeps any additional cash raised beyond that.

Keith Sheppard, the studio's owner, purchased the unit in 1982. He had only $27,400 left on his 30-year mortgage with Citibank when he fell behind on his bills, after being diagnosed with cancer, and the bank foreclosed, confirmed his attorney, Ron Hollander.

The auction not only illustrates how deeply Manhattan apartments can be discounted when sold at public auction, it also exposes the vulnerability of Manhattan's most prevalent housing type, co-ops, which generally aren't included in foreclosure statistics.

Of the 103 housing units in Manhattan scheduled for auction during the first three quarters of last year, 87 were co-ops, according to PropertyShark.

Unlike other types of residential property, co-ops don't go through the court when they fall into foreclosure because the unit owners are actually shareholders in the building, rather than property titleholders. Instead, the auctions usually take place on the courthouse steps or in the rotunda.

Also, the road to auction is significantly shorter for co-ops: Owners can sometimes receive as little as 30 days' notice that their shares are scheduled for auction, after just one missed payment, the state Banking Department confirmed. The foreclosure process generally lasts one or two years for other homeowners. ...CONTINUED

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