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I Know What You Paid Last Summer

The boom is over, having created new neighborhoods, new fortunes, a whole new city. So what are the new rules of real estate? Ask your broker. Then ask yourself if you believe her.

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The apartment is in the tenement on St. Marks Place where punk pioneer Legs McNeil shelters his pallid limbs. It's the kind of building that, in the last few years, has become home to the new East Villager -- symbolic analysts in their twenties with a not-too-risky hipness.

But maybe the punks will have their revenge on the salarymen yet. When a potential buyer and her broker walked into the $300,000 one-bedroom last month, they found the guy who was living there sitting in his home office in the dark, his shades pulled down. He was wearing a dot-com T-shirt and surrounded by derelict computers. "He was drinking wine in the dark at like two in the afternoon," says the alarmed apartment-hunter.

In the last few years of the Clinton economic good times, the city has changed profoundly. But now that boom seems to be self-immolating with the same sudden furiousness as the ex-president's reputation. (Were they made of the same frothy stuff?)

Big nylon ads for out-of-business tech companies are still stretched across the sides of buildings. Entire demographics seem to be out of work. The NASDAQ just isn't cooperating. Since the fall, New York's lost some of its feeling of go-go inevitability.

So what's going to happen to that most onerous, and obsessed-over, index of our financial status and self-worth, real estate?

It's certainly not where it was this time a year ago. Brokers seem to agree that prices have retreated around 8 percent, though others say the real change is just that there is more negotiating room. Certainly, things have slowed down a lot.

"There's a transfer of power going on," spins Corcoran COO's Scott Durkin. "The buyers are taking the lead."

Brokers want it both ways: The market's not crashing, but maybe you can find what you want now.

"Yes, there will be a slight cor-rect-tion," enunciates Amy Tucker Meltzer of Sloane Square Realty. "I'm personally, as a broker, looking forward to this market."

But what happened to the old market? Brokers, who chaperoned this wild party and spiked the punch, are already feeling nostalgic -- and a bit hung-over. "It was this incredible, euphoric time," says Douglas Elliman's Dolly Lenz, one of the most successful and effective brokers of the boom. "I'd been through it before, at the end of the eighties, but this was stronger. Everybody had to have what their friends had. People said, I have two apartments, can you get me the others on the floor? I'd literally make money picking up the phone."

"The real-estate market in its boom was completely inflated," says another broker -- sounding smug after socking away hundreds of thousands of dollars in commissions over the last few years.

The bubble machine always seemed to be churning away at realty-megabrand Barbara Corcoran's cheerful, clearly expensive office atop Barneys at 660 Madison. She's reminiscing: "There were no questions asked during the last five years," she says from the head of a table, surrounded by blond wood and happy, framed art. "Only recently are people asking what the maintenance is."

And even the master marketer herself is surprised at how the city has been reimagined in order to sell real estate. "How did second and third floors become 'town-house floors?' " she asks. "How did Carnegie Hill come to be so far from Harlem?" (She dropped $3.5 million for a co-op there herself last year.)

The city's been in the thrall of this boosterishness, and the effect has been the steady transformation of where we're willing to live and how much we're willing to pay to live there. With crime down and the economy up, the Boom-Über-Alles was rolling: $18 million for a co-op at 820 Fifth Avenue; $9 million for a condo in TriBeCa; $1 million for a townhouse just blocks from the projects in Clinton Hill, Brooklyn. And if you couldn't afford anything close to that? Well, then to Astoria with you, or Bushwick or Inwood or Kensington. Or somewhere at the other end of a commute. Just as the city expanded steadily in the nineteenth century from its original settlements across a speculator's grid of empty lots drawn over the farmland, the last five years have seen a new matrix of hype and bargain-hunting feverishness as people tried to stake their claim before the wave overcame them.

In the process, New York intensified -- Manhattan values seem to have permeated every neighborhood and made them all somehow the same. "They all erode, one into another, anchored by a Gap and Starbucks," says Halstead Property Company's Robin Horowitz. "The Village used to be heavily defined by one thing, and now . . . "

And the brokerages expanded to sell off this homogenized product. Corcoran almost tripled in size in five years, and Douglas Elliman and Brown Harris Stevens became huge, too, subsuming rival firms and adding offices everywhere.

Now, they're all in the same big boat, watching the eerily calm seas for signs of danger. "Here's one, 285 Lafayette, 4E" says another broker, trolling his computer for discounted lofts in late February. "It came on at $3.9 in January, and it's down to $3.48. Everyone's fishin'. "

Brokers agree there was a stomach-churning dip in activity at the end of last year but that things picked up again by February. But something's not quite right. "I have people who are scared," admits Horowitz. "I have a unit that went on five months ago for $1.35 million and he didn't want to sell. And now it's on at $1.2 million and he's motivated."

Last year, owning real estate was like being Emma: You got to choose your suitor deliberately, often with sealed bids, and then, sometimes, just change your mind before the deal was done.


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