New buildings have kept on rising -- along with the rents required to live in them. But is the bull market finally hitting a marble wall?
Over the past two years, 15,000 to 20,000 new apartments have been built in New York, and, appropriately enough for these boom times, almost all are for the well-off. But now brokers are warning that we might have too many fancy pads. "Nobody's building for the middle market," says Citi Habitats owner Andrew Hiberger. "And even though that's where the demand is, nobody's planning to."
A recent City Council survey pointed out that one in three city residents say they can't afford to live here. "There's no room for middle-income people, unless they have artificial rent regulations or bought their apartments years ago," declares Barbara Corcoran of the Corcoran Group. The other option is to change the definition of affordable. "There are plenty of affordable apartments," says Douglas Wagner of Benjamin James, "in the range of $3,000 for a one-bedroom." It's gotten to the point where Eviction Intervention Services reports a brisk business at its East 62nd Street location.
Meanwhile, Manhattan's freshly built apartments are renting at $60 or more per square foot. All those new towers on Sixth Avenue in the Twenties (pictured) only look cheap. D. G. Neary Realty's David Goldsmith says that since construction costs have doubled since the eighties, developers are offering perks like marble baths and free cable as a way to raise rents.
There are some signs that the luxury-only building boom has left the city oversupplied: Hiberger points to examples like a 2,400-square-foot Village duplex that had to drop its asking rent from $16,000 to $10,500 and a three-bedroom on 21st Street that rented for $10,000 this summer and now can't get half that. The usual fall drop-off in rental prices seems to be twice what it usually is, he notes, adding, "There are a lot of people who may have been priced out, but if they hang on, they're going to find themselves priced right back in."
On the Move: Quelle Bargain!
Mon Dieu! It looks like the Lycée Français, which in August put the six Upper East Side robber-baron palazzi it occupies on the market for about $100 million so it could move to more modern quarters, has found itself a buyer: Band-Aid heiress Libbet Johnson. Johnson recently put the 20,000-square-foot triplex she'd assembled at 1 Central Park West on the market for $62.3 million, apparently at the request of her hairdresser boyfriend Frédéric Fekkai, who didn't like it. Sources say Johnson, who made an abortive $27 million run on two connectable places at 820 Fifth before deciding to move to 1 C.P.W., wants to live in the finest of the six houses, the Beaux-Arts Sloane mansion at 9 East 72nd Street. To get it, she's considering buying all six (at a discount), with the intention of reselling five so the school has enough money to move. A school spokesperson said there are "a number of offers for the buildings," but "the word I have is that no deal is struck or close."
205 East 22nd Street
4-bedroom, 2-bath, 2,100-square-foot condo. Ask: $1.195 million. Sell: $1.125 million. Fourteen weeks on market.
With a live-in nanny, a baby, and maybe more on the way, this couple couldn't squeeze into their prewar two-bedroom penthouse, says their broker, Corcoran's Ruth Samuels. She showed them TriBeCa lofts that caught their interest, but when the prices weren't right they ended up downstairs in the same building they were living on top of, the Gramercy Park Habitat. The building dates from 1896 and went condo in 1984. The new, four-bedroom place has beamed ceilings and a fireplace.
415 East 52nd Street
3-bedroom, 3 and 1/2-bath, 2,400-square-foot co-op. Ask: $1.35 million. Sell: $1.15 million. Three months on market.
"It had to be over 2,000 square feet, had to have a large terrace, had to have great views, had to allow dogs, had to be in a good neighborhood, had to be a good price," says William B. May broker Toby Gamsu about this high-powered couple's very particular shopping list. Most of all, "they wanted it to be in perfect condition -- they have no time to do work." So what did they get? Everything -- except that they're gut-renovating the whole place. "It just wasn't their taste. It was modernized, and they didn't want that." The seller, a single man, was represented by Edward Lee Cave's Elese Reid.