Young Buyers, Prepared and Fearless By CHRISTINE HAUGHNEY DANIEL AND LUCIANA HYMAN are quick to admit that they are insufferably sentimental about how they fell in love. Seated on the half-finished floor of their Midtown co-op, they relate every detail about how they met at a nightclub in Rio de Janiero, how he asked her to move to Manhattan in the sculpture garden at the Metropolitan Museum of Art and how he proposed on a trip to Paris at the Eiffel Tower — well before Tom Cruise and Katie Holmes became engaged at the same spot. But Mr. Hyman, a 27-year-old trader at Credit Suisse First Boston, and Mrs. Hyman, a 24-year-old elementary science teacher at the Grace Church School, lose all of their sentimentality when they talk about real estate. After online research into the financial state of more than 100 apartment buildings, tours of 30 condos and co-ops and analysis of minutiae like projected future maintenance payments, they recently closed on an $875,000 two-bedroom co-op in Midtown. As owners in a building with relatively lenient policies, like 10 percent down payments and flexible sublets, the Hymans talk about their apartment as a strategic investment that they someday plan to turn into cash. “We’re more comfortable with taking on debt and paying tomorrow,” Mr. Hyman said. “If the cards topple, you can rent your place out and go somewhere cheaper.” There is little talk about the apartment as a romantic nest for newlyweds, and in that they are not unusual. Brokers say that younger buyers, especially those under 30, often approach their first home with cold calculation and an appetite for risk more often associated with real estate moguls. While this approach to buying may be typical of Wall Street analysts and bankers who are used to approaching deals with extensive research, younger buyers with jobs far from financial fields — wedding photographers and advertising executives, for example — are not relying only on the advice of their brokers. In addition, they are coolly investigating the backgrounds of their developers and their buildings’ histories. They treat these purchases first as portfolio diversifiers and only second as homes. With that in mind, they are keeping their money in the bank and borrowing as much as possible. “You have a new kind of buyer today,” said Dottie Herman, the chief executive of Prudential Douglas Elliman Real Estate. “Twenty years ago, it was ‘Pay everything off in cash and have no debt.’ Ten years ago, it was ‘Have some debt.’ If they want something now, they figure out a creative way to finance it.” The mind-set of younger buyers may dominate the patterns of buying in New York City for years to come. Their liberated attitude toward borrowing is helping to keep prices stable. While buyers of the past may have coveted co-ops, younger buyers find condominiums more appealing because they allow for flexible financing and their sales don’t require board approval. At the same time, younger buyers are exposing themselves to more risk because they are taking on so much debt that if prices fell, they could be caught with no equity in their homes. “The whole attitude is different today,” said Barbara Fox, the president of the Fox Residential Group in Manhattan, who started her real estate career before these under-30 buyers were born. “These buyers have never lived through bad times.” Younger buyers have such different approaches to real estate that they are prompting developers to change the way they sell apartments. Some are hyping condominiums with the promise that buyers can eventually rent them out. Others are making sure that their prices are as close as possible to similar projects because they know younger buyers have researched every comparable condominium in the neighborhood before they walk through the door.  Real estate developers and brokers are also using this information to shape how they negotiate deals and approach future projects. Louise Phillips Forbes, a Halstead broker who represents the converters of 296 East Second Street, sent the developer the feedback she got from a potential buyer about the building’s penthouse, which was lingering on the market. The bidder, a Goldman Sachs investment banker and first-time home buyer, put together a one and a half page analysis justifying her bid, which was 11 percent lower than the asking price. She based her case on data from PropertyShark.com, an online real estate company, and interviews with brokers about how long it had taken to sell apartments in five nearby buildings. The bidder argued that she should pay less because it would be harder to resell a luxury apartment on the Lower East Side. The argument was valid enough that Ms. Forbes thought the developer might want to negotiate. Since then, Ms. Forbes has received three higher offers, and last week, the developer accepted one for the full asking price. Ms. Forbes said the experience had made her take younger buyers — and their Wall Street bonuses — far more seriously and had made the developer realize how closely younger buyers were examining prices. “He might just need to negotiate on the product,” she said. “It’s a very valid argument.” Jessica Cohen, the Prudential Douglas Elliman broker who represented the Hymans, said the two dozen text messages she received from them every day was standard for clients in that age group.  She had another couple who were interested in an apartment in a new building visit other projects by the same developer, as well as those built by the same construction company, to examine the quality of the work. One buyer who spent two years looking for an apartment kept thick files on the developers and projects that he had followed. “They tell me what the developer paid for the land before they walk into the building,” Ms. Cohen said. “My older buyers want me to feed them information. My younger buyers — as much as I give to them — they do more research.” In the case of Rovic Tomás Martínez, that research extended to all the investments made by developers, not just their real estate holdings. When he and his fiancée, Roz Silbershatz, started to look for a condominium in East Harlem, they subscribed to local real estate trade publications and researched every detail they could about the buildings. Mr. Tomás, a 24-year-old associate at Morgan Stanley, and Ms. Silbershatz, a 27-year-old publications specialist at Pfizer, visited 10 apartments on the Upper East Side and in East Harlem before they became interested in the Nina condominiums at 450 East 117th Street.  They asked the developer, Martec Development, for more information about the company. They said they were a little concerned when they found out that Martec didn’t have a long track record, but when they learned that its financial backer had stakes in two popular gyms, they felt more comfortable.  They put down a deposit for a 1,000-square-foot one-bedroom loft selling for about $500,000. Mr. Tomás said that while they would probably have bought the apartment anyway, they felt better gathering as much information as they could about their purchase. “It pretty much eases your mind knowing that someone behind the project has the financial means,” he said. Some younger buyers go beyond the financials to all of the intangibles that may determine how well an apartment will hold its value. Naomi LaHaie, a 24-year-old art director in the Connecticut office of an advertising agency, spent six months searching brokers’ Web sites for apartments. Each Sunday, she traveled from Milford, Conn., to visit as many as seven open houses. (Thanksgiving weekend was her only break.)  Even with some help from her parents in putting together a deposit, she knew she would need a roommate, so she looked at places with two similarly sized bedrooms. She ruled out buildings where she found that the doorman on duty was less than friendly, thinking that would make it less attractive to a potential roommate. She also avoided the Lower East Side and the East Village because she thought a quieter neighborhood would be more attractive for resale.  After visiting 61 Manhattan apartments, she recently put down a deposit for a two-bedroom, two-bath condo at 555 West 23rd Street, priced at $1.1 million. “It was brand-new, and it was all feng shui-ed, and there was a gym, and it was all friendly,” she said. “If the doorman is really friendly, you get a good vibe.” Nora Ariffin, the Halstead broker who helped Ms. LaHaie find her apartment, said younger buyers were often more willing to search for listings, instead of relying on her to do that. Still, she often encouraged Ms. LaHaie to let her follow up to weed out apartments with problems. Ms. Ariffin said she had not run into this situation with older buyers. “The younger buyers like Naomi will do their own research,” Ms. Ariffin said. “They’re more adventurous. Older buyers haven’t e-mailed me listings outside of what their parameters are. In general, they don’t do their research as much as Naomi was.” The Hymans, while leading a reporter on a Saturday morning through the dimly lighted rooms of their new apartment at 140 West 58th Street, peppered their talk of romance with mentions of their extensive research and of Excel spreadsheets that calculate the monthly costs of their new home. They visited two other apartments in the building to compare how those units were laid out and to determine what renovations would increase the value of their apartment. They chose a sponsor-owned co-op over the other units partly because it would allow them to put down only 10 percent and bypass board approval. They found a mortgage broker who managed to knock a quarter of a percentage point off their mortgage. After the couple spent $35,000 on a number of changes, including expanding the closet in the master bedroom and installing new floors, Mr. Hyman predicted that they could easily rent the place out and cover the mortgage. His wife is ready for any move. “His work can take us many places,” she said. “I can teach English as a second language.” While many buyers under 30 are getting financial help from their families, they are also turning to aggressive financing. Data collected by the National Association of Realtors show that nearly 65 percent of first-time home buyers finance more than 95 percent of the cost. A first-time buyer is also far more likely to have a mortgage that begins with an attractive interest rate and adjusts periodically. Because co-ops in New York often require deposits of 20 percent, younger buyers tend to look at condominiums that require only about 10 percent and allow for creative types of mortgages.  In the most extreme cases, Joseph Gallagher, a Corcoran Group broker in Brooklyn, has had clients with high credit scores finance everything, even their closing costs. He finds that some developers are willing to take down payments as low as 5 percent to fill their apartments. In the wake of the recent record Wall Street bonus season, brokers say that buyers who have made enough money to put down 20 percent are choosing to keep their money in their pockets. “Younger buyers want to retain their cash,” Mr. Gallagher said. “They don’t want to empty their bank accounts for a deposit. They want to finance 100 percent if possible.” One of his clients, Charlotte Lewis, a Brooklyn-based photographer, was more conservative than most about financing her condo. She spent six months looking at nearly two dozen apartments in Brooklyn. With her savings and help from her parents, she put down 20 percent for a $340,000 one-bedroom on the outer edges of Williamsburg that she thought was distinctive enough to retain its value, even in an area with many new buildings.  She sought help from a mortgage broker in her rental building to negotiate the best interest rate, and now pays about $1,630 a month. But even with all this thoughtful research, she rattled her family when she told them about the kind of mortgage she had chosen for what she considers a five-year investment. “My parents freaked out when I said I was doing a seven-year, interest-only ARM,” she said. “They’ve always bought properties that they’ve owned for life.” In the end, they agreed with her that it was smarter to own than to rent — they even paid for the crown moldings. Since she moved in December, Ms. Lewis has painted her walls a creamy Edgecomb gray and has framed watercolors she painted as a child. She’s feeling more comfortable with her decision every day. “I really think that real estate will not go down,” she said. “At the very least, it will stay the same. In the meantime, I need a place to live. So the worst-case scenario still isn’t that bad.” Copyright 2007 The New York Times Company