(Photo: James Leynse/Corbis)

Gramercy Park, Murray Hill, and Midtown East
Say what you will about this area—it’s boring, it’s achingly unhip—but if the market takes a dive, its residents may have the last laugh. Sutton Place attracts older, richer buyers (often Park Avenue overflow) who are generally unaffected by recessions, and co-op boards here are tough, so there aren’t many defaults. Ditto for Gramercy Park, especially for apartments with those magic keys to the private greenery. (Warburg’s Judith Thorn, who’s specialized in the area for fifteen years, says every apartment she’s sold and resold there has gone for a higher price, “no matter what’s going on.”) Eternal underdog Murray Hill is surprisingly steady because it’s still undervalued. Families, often a stabilizing force, have discovered the area, lured by good deals and the excellent P.S. 116, says Bellmarcj’s Julie Friedman. But beware: New developments in the area, and in Gramercy, have tried to push the price ceiling past $1,000 per square foot, and if you bought into one of them pre-construction to get in on the ground floor, take a hard look at what you have. Though most recent projects are well built, some are Trojan horses that one broker calls “tiny boxes with cheap finishes.” (One 1,100-square-foot unit built in 2002 has been sitting on the market for five months, its asking price cut from $1.29 million to scarcely over a million. Its owners will barely break even—and this in a sizzling market.) If you had to rationalize your purchase —“it’s a bad layout but it has a big terrace,” or “it’s small and dark but it’s got marble baths”—then get ready for a dousing.

Risk Factor: 4.0