The Tide Turns

Photo: James Leynse/Corbis

For Elizabeth Kaiden, it’s been the seller’s market that never was. Since midsummer, when she and her husband put their co-op with two bedrooms and a den on the market for $945,000, they haven’t seen any firm bids. Price wasn’t the problem, their broker, Jan Reynolds, assured them, given the apartment’s size (1,100 square feet) and pedigree (charming Upper West Side prewar). “One of the reasons we decided to do this”—she’s pregnant and could’ve easily forgone the hassle of moving—“is, it’s supposed to be a seller’s market,” says Kaiden. “I thought a fly could sell an apartment, it’s so hot.”

Apparently not. For the past few months, brokers protested a bit too much when anyone talked about a slump. But now that last quarter’s reports show an 11 percent drop in average prices from the second to the third quarter of this year—a bigger dip than in 2004, says Greg Heym, chief economist for Brown Harris Stevens and Halstead—some agents, especially those who’ve only ridden a rocket-fueled market, are scrambling to learn how to do business in a “challenging” market. Already, dozens of Bellmarc agents have signed up for a seminar later this month on “Succeeding in a Changing Market.” (Lesson No. 1: Don’t be afraid. You’ll still make money.) JC DeNiro’s managing partner, Christopher Mathieson, says he’s already held meetings with brokers on the new approach to pricing. (Hint: Be realistic.) Brown Harris Stevens president Hall Willkie, like many people, is putting the best possible face on the situation: “It’s not a declining market, it’s a normalizing one. No market can sustain the increases we’ve been seeing, and that may be a good thing.”

Welcome or not, the shift has caused a maelstrom for brokers, and for sellers like Kaiden, who may find their properties sitting longer than in the recent past. Especially since buyers may have grown pessimistic in what has often been a disenchanting marketplace. Until recently, many agents courted sellers, from whom a commission was virtually guaranteed, and ignored buyers, where commissions were a lot less of a sure thing. “For a long time, buyers were throwaways,” confides one industry source. Still, Mathieson predicts activity will heat up again, thanks to the big spenders on Wall Street. “Bonuses are supposed to be even bigger than they were last year!” he says brightly. Perhaps a little too brightly.

Geffen Gets In
Having lost an awkward public fight to keep the rabble from traipsing to the beach through his Malibu property, David Geffen has gained entry into 810 Fifth Avenue. The building’s notoriously selective co-op board has reportedly approved his application for the twelve-room duplex he wants to buy, for slightly more than $31 million, from health-care tycoon John H. Foster. Formerly home to Nelson Rockefeller, the penthouse overlooking Central Park was initially priced at $39 million, more than double what Foster paid for it in 2000. Sources say the board stalled for months before interviewing Geffen, whose combative reputation may have made the building’s gatekeepers leery. A few blocks over, at 1035 Park Avenue, art appraiser Andree Dean, mother of DNC chairman Howard Dean, is reportedly in contract to sell her seven-room apartment for around $2.5 million. It’s listed on Prudential Douglas Elliman broker Belinda Brackenridge’s Website as a “great place to raise a family”—no surprise, since Howard himself grew up there. Reached for comment, Brackenridge refused to discuss the property.

Courtesy of City Connections Realty.

Triple Assessment
101 West 23rd Street, Apartment 4J
950-square-foot, one-bedroom co-op with dining alcove.
Asking Price: $499,000.
Maintenance: $1,746 per month.
Broker: Avi Lasri, City Connections Realty. There aren’t many true bargains left in Chelsea, or anywhere in Manhattan, for that matter, but this co-op sure looks like one. Despite its drawbacks—high maintenance, few amenities—our panelists still say the seller is forgoing more than $200,000. For the record, the owner says she wants a quick sale—and is likely to get one.

Michele Matilla, Bellmarc: “It’s a steal!” pronounces Matilla. She has a theory about the lowball price: It may be an attempt to address the building’s “reputation among brokers as a difficult [one] in which to sell,” despite the friendly board.
Her assessment: $760,000.

Gregory Leveridge, JC DeNiro: The building pays rent for the land on which it sits, “an additional cost buyers have to carry in the maintenance. A good deal would be $1 per square foot [per month], and this is almost double,” notes Leveridge. “All things considered, though,‘priced to sell’ is an understatement.”
His assessment: $725,000.

Yael Dunsky, Benjamin James: Dunsky was “dumbfounded”—but not blinded—by the price: “Whoever buys it would need to gut the kitchen.” Besides, “the lobby looks like the children’s wing of a hospital—too whimsical.”
Her assessment: $800,000.

The Tide Turns