Barely Missing A Beat
BEFORE the financial markets’ most recent drubbing,
These micromarkets could turn up along a particular avenue or even in a specific building, and they tended to be in what brokers describe as prime locations, in neighborhoods like Greenwich Village and Chelsea in Manhattan, and Brooklyn Heights and Park Slope in Brooklyn.
They fell into a few general categories, namely: apartments in move-in condition; family-size apartments with three or more bedrooms; apartments with unusual features like helicopter-level views of
The latest round of economic turmoil will no doubt give buyers pause and may portend a double dip for the real estate market.
“Consumers are going to look at all this economic uncertainty and they’re going to be more wary about buying,” said Jonathan J. Miller, the president of the appraisal firm Miller Samuel and a market analyst for Prudential Douglas Elliman. “It’s going to delay the recovery, which was already challenged, and it will probably take the edge off some of the areas that have already seen improvement.”
Despite this, brokers say, the types of apartments that had been getting 2007 and 2008 prices will probably continue to do so.
Shaun Osher, the chief executive of the agency CORE, said he had seen apartments in several developments that opened in 2008 and 2009 easily selling for more than the original owners paid. “The product is the product,” he said. “Even if the markets decline, the units that will continue to fare the best are the resales in new developments.” For some people, he added, “the only thing better than buying a shiny new condo is buying one that is still pretty new but has already had any problems vetted out.” He said the strong sales were helped by a lack of new inventory coming to market.
At 520 West 19th Street in Chelsea, which CORE helped sell out in 2008, a three-bedroom apartment that closed in September 2008 for $2.675 million sold this June for $3.15 million, an increase of nearly 18 percent. Similarly, Streeteasy.com shows that a two-bedroom there resold in April for $2.3 million, 10 percent more than the $2.09 million the original owner paid. The bounce clearly had not yet hit last summer, when another three-bedroom sold for $2.3 million, 13 percent below its original $2.64 million sale price.
The success of
Doug Perlson, the chief executive of the brokerage RealDirect, said strong resales were “not the rule for a lot of the developments that came on at the height of the market.” In
“There are pockets of activity in West Chelsea near the High Line that are probably going to have success in whatever market we’re in,” Mr. Perlson said. Buildings along the Avenue of the
On the same avenue at the Chelsea Stratus, a 37-story tower at
Andrew Anderson, an executive vice president of Prudential Douglas Elliman who led the sales team for the developer and has since resold dozens of units at the Stratus, said that after Lehman Brothers collapsed in September 2008 , about 20 buyers pulled out of their contracts. Those units were resold at discounts of about 15 percent in 2009, he said, but prices started to bounce back in mid-2010.
He said that the Stratus, which towers above its neighbors, was selling well “because it has something that you can’t replicate,” specifically stunning city views. “The quality has to be there and the floor plans have to work,” he said. “But it’s a building’s uniqueness more than anything else that will get the prices.”
In general,
The overall market in
Richard Grossman, the executive director of downtown sales for Halstead Property, said prices had reached previous heights only “for certain units in certain buildings.” These tend to be renovated apartments in prime locations, he said. “It’s not happening if it’s on the far East or far West Sides of town, or if it’s far from a subway stop.” Other real estate basics will also influence sales price, he added, citing an apartment’s condition and whether “it has something special about it — view, light or something unusual.” But when these apartments sell for high prices, other apartments in the same building are likely to appreciate as well.
What defines a building or an apartment as special can vary by neighborhood. In
Two months ago Richard Orenstein, an executive vice president of Halstead, sold a two-bedroom loft at
“Things in general take longer to sell now, but special apartments sell for special prices,” Mr. Orenstein said. The
In
Ms. Held said that interested buyers had been drawn by the building’s design. Unlike most postwar buildings, Butterfield House has high ceilings and bay windows.
On the Upper West Side, said Jill Sloane, an executive vice president of Halstead, apartments near either Central Park or
She recently helped Diana Lochridge sign a contract to sell her one-bedroom floor-through apartment in a brownstone on
“It was the only room that wasn’t quite done,” Ms. Lochridge said, “and I wanted a new kitchen anyway.” She spent about $16,000 to replace laminate counters and plywood cabinets and to install stainless-steel appliances. “It was money well spent,” she said. “Because I think it sold the place.”
Another broker interviewed by Ms. Lochridge suggested pricing the apartment at $700,000, even after the renovation, but Ms. Sloane put it on the market for $839,000 and it is now in contract for $830,000, a price she believes is close to market highs. She said Ms. Lochridge’s apartment merited the high price because it has nearly 1,000 square feet and is now in turnkey condition.
Marie Bianco, an agent at Prudential Douglas Elliman, said that she and some of her clients routinely used to buy and renovate apartments in the hopes of reselling them at a profit, but that the practice screeched to a halt in 2009. “Nobody could make money back then,” she said, “so they just rented them out for another year.” But investors started selling their properties again earlier this year as prices improved.
Ms. Bianco said she listed her two-bedroom apartment at the City Spire, a 72-story tower built on
In Brooklyn, Jim Cornell, a senior vice president of the Corcoran Group, said he was surprised when he reviewed sales data for Park Slope and
Three-bedroom apartments in these neighborhoods sold for an average of $1.139 million in 2007, and dropped to $1.065 million in 2009. The average price to date for 2011 is $1.226 million, Mr. Cornell said.
“When a seller comes to us,” he added, “they usually want to know if they can get as much as what their neighbor got when they sold in 2007. These numbers prove that the answer is yes, maybe even more.”
When Paula Bordelois and her husband, Michael Kamal, bought a three-bedroom in an eight-year-old building in Park Slope a few months ago, they knew they “weren’t buying cheap,” Ms. Bordelois said. Listed at $1.425 million, the apartment received five offers and sold for $1.4 million.
“A lot of our friends didn’t think it was the best financial decision,” Ms. Bordelois said. “But this was exactly what we wanted, and we were thinking we would be here for the long term, so it was the right decision.”
The duplex apartment is in an elevator building, and it has two terraces and a roof deck, none of which are easy to come by in brownstone
John Gomes, an executive vice president of Prudential Douglas Elliman, described
“It all depends on the exact location and the exact product,” Mr. Gomes said. This is why he advises customers “to buy something special — get the corner apartment, get the extra bedroom.”
Even now, in this newly uncertain market, he said, “if you make a smart choice and don’t buy the thing that anyone can buy, you’ll weather the storm.”
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