Co-ops Are Losing Their Luster to Condos. Here's Why.

This is an edited version of an article that originally appeared in U.S. News & World Report. Rebecca Blacker is a broker at Coldwell Banker Warburg.

As a New York City real estate professional for over 14 years, representing both buyers and sellers, I have seen a decided shift in the landscape over the past few years as condos have become increasingly more desirable than cooperatives.

This is because a majority of today’s generation of successful and motivated buyers have neither the patience nor interest in going through the onerous co-op board approval requirements and lengthy process. They are also unwilling to comply with extensive building rules and restrictions, including demands for high levels of liquidity, limits on mortgage financing, restrictions on renovations, and rules on everything from sublets to the size of pets.

Today, these co-op rules and restrictions, originally implemented to maintain property value, have become antiquated, and as a result, co-op values have steadily declined compared with condos. In Manhattan, the average price per square foot for condos in October 2024 was $1,891 per square foot; for co-ops it was $1,045 per square foot, according to Coldwell Banker Warburg’s Manhattan Market Trend Report.

I recently represented the seller for a co-op that had not been updated in 30-plus years. It sat on the market for months. After a price cut, I eventually found a qualified buyer who met all financial requirements. However, the building permitted one dog under 35 pounds per apartment, and the well-qualified buyer had two small dogs. When the board refused to permit them, she walked away. The property then sat for even longer and eventually sold for a significantly lower price.

The outlook for co-ops doesn’t have to be doom and gloom. In fact, I live in a co-op and I sit on the co-op board. We have changed the building’s rules to make purchasing easier and more attractive. We raised the amount of permitted financing from 50% to 75%; we now allow in-unit washer-dryers; and we’ve removed any rules restricting pets. The result: Our building is thriving, full of young families, and apartments have maintained their values.

If co-ops want to compete with the ever-expanding inventory of condos across New York City, they need to revise their rules to meet the demands of today’s buyers. Not only will this increase the value of the building as a whole, but it will breathe new life into an aging system that was designed for a different time.