They line up outside brokers’ offices, hoping to close a deal during a single seven-minute appointment. They arrive at JFK to make a 10:30 p.m. showing in Manhattan because that’s the only time slot available. They settle for pungent, dark spaces on the second floor with views of nothing, because all the other apartments are taken or cost more.
It’s not a joke. The $2 million luxury apartment is quickly becoming extinct. “If people showed at midnight, I could be out there at midnight showing apartments,” says Michele Kleier, president of Gumley Haft Kleier Realty. “If you’re not there the first hour of the first day of a sale, you very well might not get the apartment at all.”
“There has been a radical shift in terms of availability,” says William B. May’s Edward C. Ferris. “There’s a very low vacancy rate—there’s just not that much to convert anymore.” Nearly every warehouse and factory in prime areas of Manhattan has been converted, which means lofts in Tribeca and the far West Village are now more expensive than ever—yes, even worse than in the insanity that was 2000. “The $2 million market now is the million-and-three-quarters market of last year,” says Barrie Mandel of the Corcoran Group. “The market has got a lot of juice in it. People have this sense of, Eek! If we don’t buy now, we’ll miss the train!”
Two million bucks now represents the base of what brokers call the luxury apartment market. Last year, buyers were getting 2,500-square-foot completed lofts in prime West Chelsea doorman buildings for just under $2.5 million. Today, that idea would be laughable; spaces that large at that price typically require renovation or a move from the center to the fringe of a hot neighborhood.
Adding to the madness, the notion of buying an entire house in Manhattan below Harlem for $2 million is now almost completely unrealistic. Townhouses in that once-regal price range can now be wrecks, unless, Ferris says, you shoot for remote climes like the far east Twenties or west Thirties, and even those specimens may not offer outdoor space. The situation, in other words, is looking grim.
What’s a family with a mere $2 million supposed to do? Worry not—there are a few well-honed strategies brokers recommend. A series of dichotomies exists within the $2 million market: close to the Park versus not, upper floors versus lower, prewar versus postwar—the list goes on, and if you’re willing to compromise, you may find a place you thought only a Trump could afford.
The distinction between co-ops and condos is also significant. Co-op residents tend to pay less for more space in better locations. The difference, says Stacey Gero-Kanbar of William B. May, could be between paying $2 million for a three-bedroom postwar co-op between Park and Fifth Avenues and a newish two-bedroom condo east of Lexington. (Naturally, that’s contingent on passing the board.)
Of course, you could always move to Brooklyn, where townhouses seem to sprout spontaneously from the ground. It’s not uncommon to find decent $2 million-ish houses in Kings County, although there, too, a wave of inflation is swooping in from the river. “We’re in a situation where virtually every sale sets a new record,” says Christopher Thomas, who heads William B. May’s Brooklyn offices. The price increases extend to Cobble Hill, where a four-story townhouse topped $2.3 million late last year, and to Park Slope, where houses as far down as Sixth Avenue routinely fetch Heights prices.
As you’d expect, there are bigger, cheaper townhouses in parts of Brooklyn where buyers who don’t have a visceral reaction to words like Gowanus can find happiness. In Clinton Hill, the area west of Bedford-Stuyvesant that surrounds the Pratt Institute, a mansion built for the Pfizer family recently hit the market at $1.8 million. Similar prices can be found in Carroll Gardens, Fort Greene, Bay Ridge, and Williamsburg, though the spotlight in the 11211 is currently on huge, deluxe conversions near the Williamsburg Bridge, like the Gretsch Building.
Alice does, at some point, stop tumbling down the rabbit hole, and some speculate that the change may come after November’s election. Only then, says William B. May’s Thomas, will Fed chairman Alan Greenspan start inching up interest rates, which could bring about the first true cooling of the market in over ten years. Then again, if you find your 2005 apartment for a 2001 price, you may be too blissed-out to care.
90 Franklin Street. Three-bedroom loft. $1.75 million.
This 2,633-square-foot loft offers every amenity short of a Jetsons-style robot, and an enormous great room provides the buyers (a software developer, a designer, and their young son) with room to breathe.
1 Fifth Avenue. Three-bedroom combined apartment. $2.7 million.
After these two apartments are reconfigured, Paul Gigante and Madeline Vaz will have neighbors like Tim Burton and Brian De Palma. It’s “a little more Establishment” than their old digs at 9th Street and Avenue B, Gigante says. He sounds okay with that.
20 East 20th Street. Two-bedroom loft. $1.98 million.
For this enormous open space, a price war wasn’t enough—the chaos went to sealed bids. At 3,200 square feet with sixteen-foot ceilings and a pair of skylights, it’s “one of the last true lofts in Gramercy,” says Elliman’s Maria Mainieri.
33 Willow Place. Single-family townhouse. $2.3 million.
Something of a bargain because of its shallow footprint (25 by 38 feet). But, says Marty Ellman of Marilyn A. Donahue Real Estate, it has “nice detail, beautiful floors, fabulous garden.”
Warren Street near Court Street. Three-unit townhouse. $2.3 million.
Brownstone buyers, running for cover from pricey Brooklyn Heights, are finding Cobble Hill houses like this one, which has a two-car garage and a big backyard. The buyers are converting it to one-family use.
60 Broadway. Three-bedroom loft. Approx. $2 million.
Sharon Held, a Corcoran broker, started scouting this area years ago. Now she’s moving there, to the Gretsch Building, a onetime guitar factory. Her apartment will have terrace views from East Broadway to the U.N. “What’s happening there is terribly exciting,” says Held. “It’s a total one-eighty for me.”