Much less sensitive to lower interest rates (most pay cash, don't you know), the city's wealthy were the last to jump back into the market. Since January, though, the market has rebounded and brokers are now complaining about the lack of inventory. While not up to the "pay anything" levels of the market's peak, prices are solid and may even be rising. The universe of ultra-luxe apartments is tiny, so once a few places sell -- like the four prewar co-ops on the Upper East Side ranging from $5 million to $7 million that sold in the first two weeks of February -- not a lot comes in to pick up the slack. There's even been a return of bidding wars. Alexa Lambert of Stribling reports that she had a back-and-forth battle between two couples for a $7.3 million co-op on the Upper East Side last month that cost the winner more than half a million.
The price is right: There is still more room for negotiation downtown than uptown. Brenda and Gene DeRose moved into their $3.25 million, four-bedroom penthouse atop the Fischer Mills conversion in West TriBeCa last July. Wanting a bigger place for their second child, they've customized the 3,000-square-foot interior to be more kid-friendly -- including converting a breakfast bar to a kitchen playroom and putting a sandbox on the 1,000-square-foot terrace. Their agent, Stribling's Sean Murphy Turner, says it would go today for about $3.8 million.
Over the ask: Like Burberry, the Upper East Side has regained its standard-bearer status. After flirting with downtown or even the West Side, a whole new generation has learned to appreciate the long-held value Park and Fifth Avenues offer. "Especially if they have school-age children or younger," says Robert Bland, a director at Brown Harris Stevens. Last November, practically nobody was interested in looking at an $8.5 million, 3,200-square-foot condo at prestigious 515 Park Avenue, despite the ten-foot ceilings, four bedrooms, and four baths. By the end of February, things had definitely changed, and potential buyers were trooping through the top-of-the-line kitchen with custom cherry cabinets.
Medium Rare: What's hot now among the hunt-country set? Anything mint. Blue-chip real estate is a good place to park a small fortune when the outlook for bond and equity investing remains hazy. Consequently, prices for the very best condos never really bottomed out, even as volume fell last year. "These condos are almost like a commodity, like a pink diamond. If you have a rare, exceptional pink diamond, it doesn't matter what the market does. There will always be someone who wants it," says Stribling's Robin Rothman.
Coming Attractions: "The condo market at this end is always about the latest building, like driving a car off the showroom floor," Kirk Henckels of Stribling says. And this year, the buzz is about AOL Time Warner's towers at Columbus Circle, scheduled to be ready for occupancy in fall 2003. Almost 200 units have been available since late August, with more than 60 sold. The biggest property to download so far: an 8,400-square-foot penthouse with a private security station and "airplane views," which sold for more than $30 million. Downtown, developers are still planning on very expensive penthouses for new loft conversions, including the Sugar Warehouse at 79 Laight Street and Tower 270 near City Hall, which is offering two penthouses for $8.5 million and $10.5 million. But with financing harder to come by for developers, there will be fewer of these high-end downtown properties coming online in 2002 and 2003 than in years past.
The trouble with townhouses is that there aren't enough to go around. Right now, Murray Hill and Harlem offer the most opportunities for would-be lords of the manor.
BY ABBY TEGNELIA
At least the screaming matches are over. A couple of years ago, Manhattan houses were selling much as dot-com stocks were, as speculators competed for properties in order to flip them for profit. This year, townhouse shoppers are acting almost civilized. "No one's throwing down sealed envelopes to make a bid anymore," says Stribling's Linda Melnick.
The typical buyers are now mostly families looking to buy a single-family home. Ask Marilyn and Arthur Penn, who are trying to find an institution or embassy to purchase their seven-story, $13 million house on East 74th Street near Fifth Avenue. It's been on the market for a year, because it's too large for a family. "We had a contract, and it just fizzled after September 11," Marilyn says of the building, which also does duty as Arthur's office.
Inventory is down only slightly from last year, and prices are off about 10 to 15 percent, except on the Upper West Side, which brokers say has been immune to the recession. A number of houses that are on the market are there to stay. "In late '99 and early '00, there was a feeding frenzy," Melnick says. "Now, if something's priced correctly, it's gone. If it's priced for the early months of 2000, it sits."
The price is right: "Murray Hill is a secret pocket of opportunities," says Corcoran's Anne Snee. The quiet area is a short walk from midtown offices, and houses start at $2 million. "There's no huge difference between living on 60th Street or 30th Street," insists Kathleen Hoffman of William B. May. A few residents complain that it's not the best place for families, because there are few parks, and the tunnel traffic is noisy.
Harlem also draws bargain hunters. "If you want a beautiful single-family house and will do a little bit of looking, Harlem is the place," says Stribling's Bruce Ehrmann. Houses on Strivers' Row and Hamilton Terrace are sought-after, and the $1 million -- and -- less price tags are the lowest in Manhattan. (Prices on less well-known blocks are unbeatable, but many of those streets are far from gentrified, and security is still a real concern.) "We couldn't afford $4 million for a lovely townhouse," says architect Nicholas Bunning, who moved into his 5,000-square-footer in August. "But here, we're near the express subway stop in a wonderful, integrated neighborhood." The house, at Convent Avenue and 147th Street, has serious paneling and a dressing room with a marble sink. Bunning paid $425,000 for the house and is spending $280,000 on renovations, mostly on tech additions like networked plasma TVs. "I just like living in Manhattan, and I didn't want to feel like I was moving to the suburbs, like I would've if I moved to Brooklyn." Unlike Bunning, though, many buyers aren't looking to renovate.
Over the ask: "It used to be that if you couldn't buy on the East Side, you bought on the West Side," says Lewis Kaye of LBK. "Now some of the west areas -- like the Seventies off Central Park West -- are more expensive." There's not much available on Central Park West, Riverside Drive, and West End, and what's there starts at $3 million. "On the Upper West Side, the blocks are a mix of hotels and tall buildings, so your backyard isn't an unobstructed view," says financier Michael Au, 33. He ended up with a four-story, $4.8 million house on East 64th Street. "I wanted a wide house, and I wanted a garden, and you get that on the East Side." Houses near Sutton Place are also getting top dollar, Kaye says. Some small ones on Sutton Square and Riverview Terrace are priced at more than $10 million.
Farther afield: Inventory is down a lot more in brownstone Brooklyn, and buyers are scrambling. "The sellers of a single-family house in Carroll Gardens asked $1.25 million -- on the high end of their broker's recommendation," says William B. May's Christopher Thomas. "Within two days they had four offers, and they sold at more than the asking price." Overall, prices in Brooklyn Heights, Carroll Gardens, Cobble Hill, and Park Slope have fallen modestly. "At the higher end, the market has certainly retreated," Thomas says. "But at the lower end, there's been a slight increase."
For the first time in a decade, it's a renter's market. Are you paying too much? Try Chelsea, Hell's Kitchen, or Yorkville, where landlords are ready to strike a deal.
BY JADA YUAN
If the sales market has more or less remained like Weakest Link, wherein buyers weather a barrage of insults and are left wondering where their money went, the rental market has become Millionaire, in which landlords throw a free month's rent, new stoves, and other lifelines at contestants who can't seem to get past the $32,000 question. "I've been doing this for almost ten years in Manhattan," says DJ Knight's Brian Kelly, "and in sales, I can tell you that things are building daily. But on the rental side, I'm seeing apartments that used to rent for $2,800 going for $2,300 on a great block in Chelsea, and they still have vacancies in the building."
Truth or Scare? Contrary to rumors, the whole rental market hasn't gone to pot; it's just growing soft around the middle. Prices are down 8 to 12 percent citywide, but keep your expectations low for deals on studios and large two-bedrooms. Harder hit have been the one-bedrooms and junior fours typically sought by young, well-financed dot-com, media, and banking professionals. The retreat of this particular cohort has coincided with an ongoing development boom that has introduced more than 3,000 units into the downtown market alone in the past five years. The effect -- especially in overbuilt areas like Chelsea, Hell's Kitchen, and Yorkville, or downtown areas that tenants have left in droves -- has been a quadrupling of vacancy rates, and prices that hark back to 1999.
The price is right: With its tree-lined streets and excellent subway access, Chelsea has the city's best deals. Six relatively new towers now occupy Sixth Avenue between 19th and 26th Streets, many offering up to 10 percent reductions (the Caroline, at Sixth and 23rd, is also throwing in a year's membership at New York Health & Racquet Club). And you can find even more deals west of Ninth Avenue and north of 25th Street. Richard Higgs, a manager at currency brokerage Prebon Yamane in Jersey City, found a newly renovated, 1,400-square-foot, key-elevator, two-bedroom loft at 521 West 23rd Street that had been on the market since late June. The original price was $7,000, but by the time Corcoran's Laura Wagner showed it to Higgs in November, the price had dropped to $5,500, largely because of the construction of yet more high-rises across the street. Though the place had a wall of ten-foot windows, a view of the river, a washer and dryer, and a great location near Gallery Row, Higgs managed to wrangle a $1,000 break on the rent, and then another $1,000 break for every month of construction.
Farther afield: Want character? Brownstone owners facing weaker demand in Brooklyn Heights and Park Slope are ready to talk. "Because they're so directly impacted by the loss of revenue, families are much more motivated to move quickly on the downside," says Victoria Negron of Corcoran's Brooklyn Heights office. Some owners have even begun to barter. "They'll throw in a fresh paint job, abandon their no-pets policy -- anything that can cause the deal to close," says Negron.
Buck Stops Here: In prime areas like SoHo, Greenwich Village, Gramercy Park, and Park and Fifth Avenues, one-bedrooms still rent for $2,600 a month, simply because current residents aren't leaving. Even more in demand are areas where the rents are already relatively cheap, like the South Street Seaport, Harlem, and Alphabet City. Not only have the newly frugal flocked to these neighborhoods, keeping demand high, but prices are so low to begin with that there isn't much wiggle room.
The outlook: Douglas Wagner, president of Benjamin James Real Estate, says that many management companies' offers to pay part of the broker's fee will end in March. Already, renters like Ethan Morris, a 27-year-old media supervisor for a direct-marketing company, are complaining about the ones that got away. "There was one other I liked more," says Morris, who just moved from his mom's place on the Upper West Side to a 1,000-square-foot one-bedroom that had been marked down from $2,300 to $2,000 on Remsen Street in Brooklyn Heights. He has a giant bay window, a fifteen-foot cathedral ceiling, an original fireplace, a new refrigerator, and six closets. But . . . "It's just that the other place was a two-bedroom and it had an elevator," he explains. "If that place was a 10, this place is a 9.5."