It was the first-time investors, not the Warren Buffetts, who took the stock market out of the last recession, and it may be the common man -- the erstwhile renter -- who does the same for post-bubble real estate. "In early 2000, there were multi-million-dollar properties selling every day at a new record price," says Insignia Douglas Elliman's Tristan Harper. Though he's just broken a post -- September 11 sales record with an $18.25 million Park Avenue condo, Harper credits a humbler clientele for the resiliency of Manhattan prices. "After September 11, the first-time buyers were the ones who were basically holding the market," he says.
Higher demand in January buoyed prices, and cautious one-bedroom owners -- those who haven't fled the city already -- aren't going anywhere. "Sellers are not desperate," says Corcoran's Christine Iu. "They know that if they hold out, they will get their price." Ken Altman lowered the asking on his Yorkville one-bedroom (on the market since late August) from $325,000 to just under $300,000, but he'll go no further. It's still on the market, and bids are still coming in just below ask. "I checked what other full-service apartments are going for in my area," he says. "I'm confident that we are where we should be in the marketplace."
Over the ask: Whatever the neighborhood, the rarest inventory is always the priciest. Below 125th Street, prewar one-bedrooms are prized and rarely for sale. From the Bing & Bing stalwarts in the West Village all the way up to West End Avenue in the 100s, inventory is scarce and bidding wars are par for the course -- particularly on the Upper West Side. Reversing the East-West divide of a decade ago, space here can sell for 15 percent more than the going rate east of Lex. "Some of my agents are losing buyers to the East Side," says Jeffrey Rothstein, the head of Douglas Elliman's West Side office. "Normally, they would buy in the West, but they've gotten outpriced."
The price is right: For more options, follow the inventory, all the way to the Upper East Side east of Lexington -- with abundant postwar residential space where one-bedrooms predominate (proportionately more than in any other neighborhood, according to Elliman's Harper). That's what Edmund Cape did. The week of September 11, the 32-year-old McKinsey consultant was set to close on a $320,000 Grand Street two-bedroom with a full view of the Twin Towers, but the seller refused to renegotiate. "I was initially upset, of course," says Cape. "But when I started looking around, there was clearly softening all over." He still had to fight off two other bids -- both below asking -- on a large one-bedroom fifth-floor walkup in Yorkville that he snagged for $279,000.
Farther afield: Newly gentrified neighborhoods -- the East Village, Hudson Heights, Fort Greene, and Clinton Hill -- are still the least inflated. The average Clinton Hill one-bedroom went for $148,000 last fall, according to Corcoran. And a couple of brokers, asked where they'd personally invest, name Hudson Heights, a section of Washington Heights bounded by 174th Street and Fort Tryon Park where thrifty couples like Michael Poehlman and Stephanie Nobert have been able to find spacious prewar one-bedrooms for less than $200,000. "We knew we wanted to be in this neighborhood," says Nobert, who had been renting in a Williamsburg rowhouse. "We wanted a more permanent structure."
The nest-egg effect: "There is a wealth factor that we did not experience in the last recession," says Corcoran's Cathy Blau, who sees a lot of savings in buyers' financial papers. Lauren Michaels, an associate publisher at Harper's Bazaar, didn't exactly find a steal in her $400,000 Murray Hill pad with $1,800 monthly maintenance. Michaels knew what she wanted and had the financial security to get it (at $25,000 below asking). "I've been looking for a year, on and off," she says. "The more I looked, the more I felt that everything was overpriced." Eventually -- as prices dipped -- Michaels found everything she wanted (doorman, wraparound terrace, large den) and had enough left over for a decorator. "It's just so perfect for me," says Michaels. "Immediately, I'd started wondering what I could do with it."
BY BORIS KACHKA