(Photo: James Leynse/Corbis)

Chelsea, Clinton, and Hell’s Kitchen
In the mid-nineties, New York real estate’s unofficial Dark Ages, mortgage broker Paul Cole and his wife, Kelly, bought a one-bedroom in a full-service building in the West Thirties for $72,000. Its owners had paid more than $110,000 many years before but couldn’t afford to wait for prices to bounce back. And it’s likely that the Coles weren’t the only ones who found a fire sale: From 1989 to 1993, prices here fell a shocking 43 percent. But it was a different neighborhood then. The area’s no longer fringe, for which you can thank the gentrification gods (or demons) and even perhaps the glow of Time Warner Center, which bootstrapped prices in the West Fifties. Chelsea’s the most luxurious pocket, and the most stable. Even its heavily industrial western edge will likely ride out a recession: “It’s embraced by the river and is in the middle of an established market,” says veteran Elliman broker Leonard Steinberg. And with all types of housing, from tenements to townhouses, “that market’s exposed to a wider swath of owners,” says Jonathan Miller, president of Miller Samuel, an appraisal firm. In other words, the diversified portfolio of residents and businesses—restaurants and grocery stores, schools and churches, art and commerce, and a whole lot of committed gentrifiers who paid top dollar—add stability. The biggest question mark is the new “luxury” towers that have sprouted all over the West Forties, one with lovely views of the Port Authority Bus Terminal. Though they’re larded with condo goodies (gym, screening room), the area’s a long way from being established, which could mean a big dip.

Risk Factor: 6.0