Real Estate

Lonely at the Top

Super-luxury buyers slam on the brakes—at least for a moment.

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By S.Jhoanna Robledo
Published Nov 9, 2008

(Photo: Lucas Jackson/Reuters/Corbis)

Until about a month ago, the New York real-estate market was split in two. As properties below $5 million stayed longer on the market, the big-ticket sales just kept on coming. Multi-million-dollar sales—at the Plaza (pictured), 15 Central Park West, and up and down Fifth and Park Avenues—grabbed headlines all summer.

What a difference a bailout makes. “What happened was Black Monday No. 2,” says Prudential Douglas Elliman’s Darren Sukenik, talking about the stock-market crash on October 10. “Right after, we saw a decidedly slower pace.” Veteran broker Rick Wohlfarth: “The psychological impact of what’s happening is enormous. [High-end] buyers don’t have the confidence they used to have. The phones aren’t ringing.”

As of last week, a Streeteasy.com search of the 847 Manhattan listings priced over $5 million reveals that about 24 percent of them have been marked down by at least 5 percent—145 of them in the past two months. Even marquee projects are seeing some of their gloss wear off, if only a little. At 15 Central Park West, eleven apartments are for sale; five of them have had their prices cut. Twelve more are now for rent. Over at the Plaza, 24 sellers are seeking buyers, 9 of them having offered markdowns. (None is in contract.) And a $27 million townhouse deal is said to have stalled just a week before closing, when the buyer demanded to renegotiate the agreed-upon price.

Since people this rich aren’t mortgage-dependent, and they aren’t living simply on bonuses, why are they staying away? “Every time you picked up the paper this October, there was a piece of bad news,” says Corcoran’s Sharon Baum. “The wealthy have the money to buy, but they don’t really have to buy.” Too many uncertainties—over the presidential choice, and about how much help the bailout’s going to be—are making people wary. Now that at least one of those questions has been settled, brokers are openly hoping that the market will start percolating again. “I’m optimistic that by January people will have more confidence, and we have one decision made now—the president,” says Baum. “So we’ll get on with it.”