A Cool Million

I have one client – a lawyer – who wants to spend a million, a million one, on an apartment,” says Michele Kleier, president of Gumley Haft Kleier, the New York real-estate brokerage and management firm. Recently, Kleier found a great deal (the first decent property she’d seen in a long time), but the client was in Florida for the weekend, and by the time she flew back to New York to have a look, it was too late. The apartment, five rooms at 1035 Fifth Avenue, was already under contract for $975,000, with two backup bids. $975,000? This is a deal? “She’s killing herself that she went to Florida,” says Kleier, noting that the client canceled a vacation scheduled for the following month – just in case.

Not so long ago, a million dollars bought a lot more than a medium-size apartment; in fact, ten years ago, New York State began charging a special one percent luxury tax on the sale of all residential real estate over $1 million – known as the mansion tax. But if a million no longer gets you a mansion, what will it buy?

“I’m embarrassed to tell you, I don’t know what a million dollars will buy these days,” says Edward Lee Cave, head of his eponymous real-estate brokerage. “What my clients want costs a lot more than that.” A million won’t buy a good-size three-bedroom apartment on the Upper East or West Side (above 59th Street and below 96th Street), on Sutton Place, in SoHo, in the West Village, or in Chelsea.

“A million – or $925,000 plus closing costs – will buy you a one-bedroom in the Mayfair on a low floor, or a one-bedroom on a middle floor in the Trump International Hotel and Tower,” says Sotheby’s International Realty’s Dolly Lenz. “Or you can still get a two-bedroom at the Trump World Tower (three blocks from the U.N.), because it’s two years away from being delivered.” You might be able to find a 2,000-square-foot “classic six” in the million-dollar range – two full bedrooms, a maid’s room, a kitchen, a living room, and a dining room. That is, if you’re lucky and move quickly, and, says Lenz, you’re willing to live in small rooms on a low floor in a postwar building that is closer to the East River than to Central Park. And the windows look out on a brick wall. Is this suffering? Hardly. But it’s not what you’d expect for a million dollars.

“For a million dollars, I’d expect a doorman to be there to open a door for me,” says Stuart Faber, married with one child, living on the Upper West Side, and perpetually apartment-hunting. “But when I walked by that new condominium on West 86th Street the other day, there was a hand-scribbled note taped to the door saying ring for the doorman.” Three-bedroom apartments measuring just under 2,000 square feet in that particular building, the Westbury House, are going for just over a million. “You’d think for that amount of money,” says one prospective buyer, “the floors wouldn’t squeak and the marble bathrooms wouldn’t look so generic.”

That the New York real-estate market is boiling is nothing new, but only people who have looked recently know just how hellish it is out there. Abandon all hope if you’re thinking about a three-bedroom in prime Park, Fifth, or Central Park West turf. Just the playroom could cost a million dollars – if you could even find a “family-size” apartment on those strips.

Seen lurking in the market recently: A 1,000-square-foot one-bedroom at 14 East 75th Street with a “very efficient kitchen” (code words for tiny) priced at $1.2 million. Or, for just over a million, a 1,550-square-foot two-bedroom apartment overlooking Central Park, at 65 Central Park West. Two recent listings for three-bedrooms around a million dollars – one at 465 West 23rd and another at 370 East 76th – are actually for two apartments each, which the buyers would then need to combine – probably adding at least $100,000 to the cost. “There really is almost nothing out there,” says Kleier, adding that this is the case in every price range. People are having to spend a third more than they bargained for.

For just under $1.2 million, you could snare a 2,032-square-foot three-bedroom apartment in the still-under-construction condominium at 2 Columbus Avenue. No surgery is required, but the building isn’t finished yet, and it’s one block away from being considered prime real estate. (Even so, real-estate brokers are saying it’s “a deal.”) There’s a 1,500-square-foot apartment on lower Fifth with a “vintage” bathroom (another code word, for not having aged particularly well) and a third “bedroom” (actually a space cordoned off from the hallway by two bureaus). “It feels like someone passed away there,” says one broker who saw it. That one’s going for $925,000.

“A million dollars is not as high-end as it used to be downtown, but it’s still high-end,” says Stephen Kliegerman, director of downtown sales for the Halstead Property Company. On Duane Street and Hudson, there’s an 1,850-square-foot loft with a terrace upstairs (“It’s a little quirky”), two bedrooms, and one and a half baths for $995,000. On Fourth Avenue and 11th Street, there’s a three-bed, three-bath 2,200-square-foot apartment up for grabs in a doorman building – not a bad price, says Kliegerman, but the maintenance, $2,800 a month, is “on the high side.” A more loftlike penthouse apartment in the Christodora House in the East Village – but still just a modest two-bedroom, two-bath space – recently sold for $995,000, just barely avoiding the mansion tax.

Kliegerman actually had trouble finding a million-dollar listing in the East Village; brokers say that in most of the East Village, a townhouse delivered vacant and in need of work would probably go for around $1.5 million (there aren’t any on the market right now), and a townhouse brimming with rent-stabilized tenants might go for $1 million.

Across town in the West Village, expect to pay upwards of $2 million to $3 million for a townhouse, say brokers in the area; in Chelsea, expect the same. Even buildings that include rent-stabilized apartments have gone up in price – though not quite as much. “I looked today at a townhouse on Waverly,” says Dorothy Wiggins, a broker at Prudential LBK International. “It was $1.8 million and it needs all kinds of work, and – get this – it has a rent-stabilized tenant paying $450 for a floor-through on the parlor floor.”

It’s pretty much the same story in the townhouse market uptown. According to Leslie J. Garfield, founder of his own real-estate agency, you might be able to find a townhouse for $1.5 million on the Upper West or Upper East Side, but only if you look “off the mainstream” – in the East End Avenue area in the Eighties, in Turtle Bay in the Forties, on some streets near First and Second Avenues in the Fifties, or in Murray Hill. “Two years ago,” says Garfield. “You could’ve gone $500,000 under that.” What happened? Like everyone else, Garfield says he is seeing a lot of Wall Street cash, and these young families with kids will pay a premium for the extra space.

If there is such a thing as a bargain in New York real estate, it might be on the upper Upper West Side. There are two three-bedrooms on the market on West End Avenue above 96th Street, one at 97th Street and the other at 102nd Street, listed at $915,000 and $850,000, respectively. Accessible to many of the city’s private schools, it’s a neighborhood that’s lagged behind much of the city, though it seems to be catching up fast.

The market in Brooklyn Heights has stayed in sync with upscale Manhattan neighborhoods – a 2,000-square-foot co-op, the lower two floors of a Pierrepont Street mansion overlooking a private garden, sold recently for just under a million dollars. But venture a little deeper into Brooklyn, into Park Slope, and $1.2 million will buy you a six-bedroom townhouse “in pristine condition,” says Christopher Thomas, sales director for William B. May’s Brooklyn offices (and there’s a separate garden apartment that the owner can rent out for at least $1,800 a month). Just a few years ago, Cobble Hill was Brooklyn Heights’ much cheaper next door neighbor. Now it’s catching up, although “A” locations in Cobble Hill are priced closer to “B” locations in Brooklyn Heights, says Thomas. There’s a townhouse on the market for $1.2 million that needs a little work – mostly cosmetic – on what Thomas calls a “pretty but heavily trafficked block.” Meanwhile, area residents who have been priced out of the market are looking to Carroll Gardens and Boerum Hill, where $700,000 is still enough to buy a historic townhouse in fairly decent condition.

Also, Manhattan’s Brooklyn-bound young professionals are now discovering Fort Greene, just a few stops into Brooklyn on several subway lines. The racially mixed area with a sizeable brownstone historic district has, since the seventies, drawn artists and musicians. Prices have started moving up, but not as much as in Park Slope and other neighboring communities. According to Kathryn Lilly, founder of Realty on the Greene, there is currently a beautifully restored four-story three-to-four-bedroom townhouse on a good – but not great – block for $495,000. But this year’s record for Fort Greene is Spike Lee’s 5,500-square-foot nineteenth-century townhouse, now under contract for just under a million.

Harlem has even better townhouse buys than Brooklyn. For a million, you can buy two houses on Strivers’ Row on 138th Street, according to Lana Turner, a broker with Denise Shaw, Esq. & Associates, but there aren’t any openings there right now. The most expensive townhouse sold to date went for $465,000 two and a half years ago, though Turner has a property currently under contract for just over $500,000, with four backup bids.

It’s a similar story in Queens, where in most neighborhoods prices have gone up more than 20 percent in the past two years, though you’d be hard-pressed to spend a million dollars on one house. Still, in Jamaica Estates, one of the borough’s tonier areas, there is a five-bedroom, four-bath Colonial with an asking price of $849,000. It’s been on the market since December, according to First Choice Real Estate’s relocation director, Helen Keit. A six-bedroom “contemporary split” house with a million-dollar asking price in Little Neck Hills has been on the market since July. But it’s in the $300,000 to $400,000 range that Keit is seeing the bidding wars.

In Riverdale, the Bronx pseudo-suburb with Larchmont-style houses and grassy lawns, you could buy a French Normandy stucco four-bedroom for just $1.1 million, including a master-bedroom suite, a wine cellar with climate control, a sunroom, a study, a dining room with a fireplace – plus a 24,000-square-foot yard – in the relatively expensive Fieldston section. For the same amount of money, you could also buy two townhouses (with parking spaces) or two three-bedroom apartments in one of Riverdale’s best co-ops – including river views, a concierge, and a heated pool.

For a more spottily developed crypto-suburb, there’s always Staten Island, where $1 million will buy a six-bedroom, 7,000-square-foot house in the Todt Hill section. Todt Hill, an area brimming with cartoonishly big houses and tightly packed mini-mansions, is perhaps best known as the onetime home of assassinated mobster Paul Castellano. It’s also where you’ll find the only private golf course in the city of New York at the Richmond County Country Club, says Jon Salmon, owner of Salmon Real Estate in Castleton Corners. Not that you need a million to score one of the island’s enviable views: “For $200,000, you would probably get a 50-to-60-year-old Colonial in good condition,” says Salmon. What a million dollars won’t buy you is the most expensive Staten Island house currently on the market: an 11,200-square-foot round house on the Atlantic Ocean with a private beach on an acre of land in southeast Annadale. The house is listed at $2.95 million.

Okay, forget the city. In the suburbs, a million dollars should still be able to satisfy the richest tastes, right? In Greenwich, where the average house price routinely tops $1 million, you can find something for a million or thereabouts if you’re willing to be “flexible,” say brokers, and if you look at it as an investment. “For a million dollars, you’re not going to find your dream house,” says Round Hill Partners co-owner Renee Gallagher, “but you’ll be in a market that has been a great investment for 30 years.” John Cook of Merrit Associates recently sold a fairly modest four-bedroom, two-bath colonial on less than a third of an acre for just over a million, mainly because it’s close to the train.

Buyers willing to head into back-country Greenwich will see their money go farther. Fifteen minutes from the railroad station, there’s a three-bedroom house on four acres with a pond for $875,000, says Mickey Karlan, a broker with Preferred Properties. What you won’t be able to find is a big house on a decent plot of land closer to town – not unless your starting price is $1.8 mil. There are more savings here than meet the eye, however, because income and real-estate taxes are lower in Connecticut.

Scarsdale offers a little more land for a little less money, and it’s a shorter train ride away. Plus there’s that famously competitive school system. But prices there have also risen 12 to 15 percent in the past year. You can buy a five-bedroom, three-bath house on nearly two thirds of an acre for just over a million in Scarsdale, while in nearby Pelham – even closer to the city – you can buy a renovated brick center-hall Georgian, with six bedrooms and three and a half baths (4,100 square feet of space, walking distance from train and schools) for a cool million. Scott Stiefvater, at Stiefvater Real Estate, points out that only four houses sold in Pelham for a million or more in 1998 – and three of those went for below the initial asking price (practically unheard of in Manhattan these days).

In New Jersey, the prices have risen, too, but certainly not as much as they have in Westchester. “You could get a very nice house here, or you’d think so if you weren’t coming from Atlanta or Dallas,” says Lois Schneider, a broker in Short Hills and Summit. “When those people come, they expect 5,000 square feet and they’ll probably get about 3,000 to 3,500. Right now,” adds Schneider, “I have a six-bedroom – including an au pair suite. It’s three and a half baths, on half an acre, a brick-front Colonial for $1.1 million.”

And no would-be commuter can afford to overlook Long Island. “We are seeing people who’ve given up on Westchester and Greenwich because the prices there went catastrophic,” says Charles A. Brisbane, a Locust Valley?based broker with Daniel Gale Associates. A four-bedroom, three-bath house on two acres in Cove Neck, on the North Shore of Long Island, is under contract for $849,000. But prices are rising here, too. “A million dollars three years ago could get you four acres with waterfront on Center Island,” says Brisbane. “Now that just isn’t going to happen.” To score a house on five acres, you’d have to move way out beyond the acceptable hour-and-a-half commuting range. But you can still buy raw land in towns like Mill Neck and Matinecock for under a million.

Of course, go far enough east, to the Hamptons, and you run right back into Park Avenue prices. For just under $1 million in Amagansett, says Frank Newbold, manager of Sotheby’s East Hampton office, there’s a five-bedroom, three-bath restored 1905 house with a Jacuzzi and a 40-foot heated pool on three quarters of an acre – within walking distance of the ocean and the town. “It’s in tip-top condition,” says Newbold. “You could walk in and give a cocktail party that night.” Or, for about the same price, you can buy a seven-bedroom, completely restored 5,000-square-foot Victorian in the heart of East Hampton Village on half an acre. “Three blocks over in Georgica, it would be $3 million,” says broker Joseph Horstmann, co-founder of Main Street Properties.

But here’s what a million won’t buy you in the Hamptons: a house on the ocean or one on more than an acre south of the Montauk Highway. “People have an idea they can find something on a couple of acres near the beach for around a million dollars,” says Newbold. “That just won’t cut it anymore.” But take heart: The South Fork is still less expensive than Aspen and Vail. At least for now.

A Cool Million