View Full Version : The Price of Luxury Is Stirring Again

December 26th, 2003, 12:21 AM
I do like the mention of people moving from the burbs and people upgrading and NOT moving to the burbs...

NY Times:


Published: December 25, 2003

O you thought you could give the apartment hunt a rest this week?

Think again.

In past years, the New York real estate market basically shut down for the holiday season. But this year brokers are reporting a shopping frenzy, with buyers fighting over apartments as if they were the last Hokey Pokey Elmo at Toys "R" Us.

"I figured it was going to be dead because it always is," said Michele Kleier, president of Gumley Haft Kleier, a real estate firm specializing in luxury properties. But she has been unnaturally busy with apartment showings this season. "I've had to change my haircut three times," she said. "Every time I go to make an appointment, I have to cancel it."

All over the city, brokers are trumpeting the return of apartment prices that in many cities would sound like the annual parks budget. Although low interest rates have kept the market for apartments under $1 million buzzing throughout the recession, the market for higher-priced places starting at, say, $1.7 million has until recently been softer. But now, with the economy improving, even multimillion-dollar apartments are being snapped up.

Ms. Kleier said that just before Thanksgiving she advised the seller of a prewar co-op on the Upper East Side that had been on the market for 14 months to accept an offer below her asking price of about $6 million. She said she told the seller, "Nothing is going to happen until after Christmas, and let's just sign the contract." Then, all of sudden, buyers were clamoring to see it. Last week, one buyer offered the asking price, Ms. Kleier said, and the seller has signed a contract on that bid.

Facing a Dow above 10,000 and expectations of sweet Wall Street bonuses, New York home buyers find themselves chasing a dwindling supply of apartments.

Among those competing for the increasingly rare two- and three-bedroom units in the best buildings are suburbanites who want back into the city action and families with three and even four children who have decided to stay instead of fleeing to Westchester. Add to that couples having their first child and families who think it's time for an upgrade, and it's a cutthroat world out there.

Even the shrewdest buyers are struggling. Alexis Hilton Mintz, a 29-year-old sales agent at Fox Realty in Manhattan, and her husband, a real estate financier, have been looking for a classic seven- or eight-room apartment on the Upper East Side for several months for themselves and their daughter, born nearly three months ago. They hoped to find a "fixer upper," and were willing to pay up to $2 million.

This month, Ms. Mintz said, they bid on a seven-room apartment that was in "terrible condition," badly in need of kitchen and bathroom renovations. But it was within their price range. Although the sellers initially accepted the offer, she said, they later got a higher one.

"Things seem better, so people are going to go spend," said Amanda Brainerd, a sales agent at Warburg Realty in Manhattan. "Most of my customers are in the $3 million to $5 million range and are finding nothing. That's a lot of money. Hello?"

Earlier this year, many buyers were anticipating a market collapse that would let them jump in. Suddenly, "people are thinking, `If I don't buy now, I'm going to end up paying more money,' " said Pamela Liebman, chief executive of the Corcoran Group, one of the largest real estate firms in New York. In recent weeks, she said, a $10 million apartment incited a bidding war, and a $13 million town house sold to the first buyer who walked through.

Developers of 43 West 64th, a new 32-unit luxury condominium project near Lincoln Center, say sales have picked up markedly in the last three months. The condos went on sale in July last year, but in a little over a year only 10 sold. Since Labor Day, the developer has sold 16 units, including 3 penthouses, one for $10 million. "A lot of people who were waiting for a correction in the market now can't afford to wait," said Bret Bobo, senior vice president for sales and marketing at the Athena Group, the developer.

Prices for luxury apartments have been creeping up since summer. Miller Samuel, a New York real estate appraiser, said the average price of Manhattan co-ops and condos that sold for $2 million or more increased 13.6 percent in the third quarter of 2003, to $3,461,532, from $3,047,690 in the second quarter. The buoyancy on Wall Street "has a tremendous implication on the real estate market," said Jonathan Miller, the firm's president.

All the new activity means that buyers are once again suffering sticker shock. When Donna Olshan, a broker in Manhattan, recently showed a seven-room apartment on the Upper East Side, one buyer nearly burst into tears upon hearing that the asking price was $2,495,000. "These units were going for $2 million or $2.1 million earlier this year," Ms. Olshan said. "She missed it."

The trend is not limited to Manhattan. In Bronxville, N.Y., in Westchester, sales of more than $2 million are up 64 percent 18 this year, as against 11 last year said Susan Kelty Law, an agent with Houlihan Lawrence there. And in Brooklyn Heights, where the highest price for a town house was just under $3 million last year, a comparable five-story town house sold for $3.7 million this year, said Christopher Thomas, president of William B. May of Brooklyn. Three town houses are now on the market at more than $3 million, he said.

Brokers and buyers alike are taken aback at the pace of the market. Cyrilla Layland, a sales agent at Stribling & Associates in Manhattan, said she had tried to sell a seven-room Park Avenue apartment for six months. "I must have shown it 150 times," she said. "I thought I would scream." But in the space of two weeks in October, she said, "I was inundated with four of the most superb bids I couldn't believe it." A buyer signed a contract last month, just under the asking price.

Many buyers have had to adjust their price ranges. Aimee and Sam Goldenberg, who have three children and a five-bedroom, five-bathroom house in Wayside, N.J., are looking for a three-bedroom apartment, preferably on the Upper West Side. They want a place in the city because their youngest daughter, Jodi, 12, wants to become a professional singer, and she and her mother have to shuttle in and out up to three times a week for vocal lessons and meetings with Jodi's manager, lawyers and producers.

When the couple began their search about four months ago, they thought they would spend $800,000 to buy a place that needed lots of work. Mrs. Goldenberg quickly realized that they would have to pay more. But for $1 million, she said, "I thought I was going to have everything I wanted." she said. No way. They offered $1.55 million for a three-bedroom, three-bathroom apartment with an asking price of $1.7 million. It sold to another bidder.

After a while, even though the couple kept raising their price range, it seemed that "whatever number you say, `O.K., we're going to look at it,' by the time I got to that number, it didn't satisfy our needs," Mrs. Goldenberg said.

Antonio Cosentino, a Corcoran broker who is helping with their search, said the family is taking a break from looking over the holidays, but only because "there is nothing to show them."

The lack of two- and three-bedroom apartments has forced many buyers to spend more than they had planned even in neighborhoods they had not previously considered. When Frederik and Ann Marie Aase decided to move with their two children to Manhattan from Dobbs Ferry, in Westchester, they spent nearly nine months looking, and recently bought a new $1.66 million three-bedroom condo in Chelsea. They couldn't find anything they liked in their price range on the Upper East or the Upper West Sides, but even in Chelsea, Mr. Aase said, "we ended up spending an extra 20 to 25 percent above our price range."

Ever the Manhattan real estate agent, Maverick Scott, the Halstead Property agent who worked with the Aases, said they have made a wise investment. If they immediately resold the condo, which they bought just this month, he said, "it would sell for $2 million or $2.1 million."

There is no sign of a pause in the upward march of real estate prices. Amy Katcher, a broker at Brown Harris Stevens in Manhattan, said brokers have already been told about apartments that will go on the market in January, and "we see the prices are already up."

December 29th, 2003, 10:31 AM
Well thats just peachy.

-Disgruntled Co-Op/Condo shopper.

February 20th, 2004, 05:58 AM
February 20, 2004


Prestigious Co-ops Nearing Price Peaks of 4 Years Ago


Amid a surge of interest from Wall Street buyers, the price of a prestigious Park Avenue address is now approaching levels not seen since the real estate market peaked four years ago and then tumbled along with a declining stock market, brokers say.

A study of the most expensive co-ops in the city, typically large prewar apartments on the Upper East Side and Central Park with grand views, found that average prices of high-end apartments, defined as those costing more than $4 million, surged nearly 15 percent last year, to $7.2 million. That figure was 5 percent below the peak of the market in 2000.

The study's author, Kirk Henckels, director of private brokerage at Stribling & Associates, said the sales of these luxury homes accelerated throughout the fall, with prices rising further in agreements reached in the last few weeks in exclusive Fifth Avenue and Park Avenue buildings.

The study identified 91 luxury co-ops that sold for more than $4 million last year, a number that included 15 higher-priced trophy homes selling for more than $10 million each. There were more sales in the last half of 2003 than during the first half of 2000, when the market hit a peak, Mr. Henckels said. "In co-ops the pressure has continued," he said. "We have some outstanding town houses available, but in co-ops there is precious little left to sell."

This finding is supported by other brokers, who say that a surge of buyers, buoyed by end-of-year Wall Street bonuses, entered the market intent on taking advantage of extraordinarily low interest rates. Interest rates have long been credited with driving up demand for lower-priced housing across the city and the country, but the link to the luxury housing market has traditionally been more tenuous.

This resulted in frequent bidding wars, little in evidence in the luxury market for several years, and a decline in the inventory of available apartments.

Kathleen M. Sloane, a vice president and director at Brown Harris Stevens, said that the market came to a halt last spring at the time of the Iraq war, and that the peak spring selling season was delayed until July.

But for the last few months, she has regularly worked 12-hour days to keep up with the demand for apartments. "Since mid-December we have been engaged in bidding wars in every single transaction," she said.

Frederick W. Peters, president of Warburg Realty, said the luxury market had "turned 180 degrees in 12 months."

"By the early fall,'' he said, "there were bidding wars, with both bidders below the asking price. Later in the year, the winning bidder would typically be at the asking price. Now the winner is over the asking price.''

The study by Mr. Henckels also found that sales of single-family town houses were strong, with prices and sales up, and with 46 sales over $4 million, with an average sale price of $7.7 million. That was just below the peak year of 1999, when the average price was $7.9 million. That surge produced a glut of listings above market prices that took several years to work through, brokers said.

Stephen Kotler, an executive vice president at Douglas Elliman, said that he recently marketed an apartment at 700 Park Avenue at 59th Street, which, unlike the prime East Side apartments, had only two bedrooms and was in a postwar building. The asking price was nearly $3.5 million. "The response was tremendous, we had 50 inquires in the first week," he said. A sale agreement is pending.

Sales of high-end condominiums were also reported strong last year at a number of new luxury buildings and were being aided by the strong market this winter as well, the brokers said.

The most expensive residential sale ever recorded in Manhattan was last year's purchase at $42.5 million, plus transfer taxes, of a 12,000-square-foot loft, plus terrace, in the Time Warner Center on Columbus Circle. Last year's peak co-op sale was a $20.5 million duplex on a high floor on Park Avenue in the 70's.

Asked about the state of the upscale condo market, Louise Sunshine, a marketing consultant to many of New York's newest condominium projects, including the Time Warner Center, said: "We had four sales of more than $10 million in the last 10 days at Time Warner. The market is exceedingly strong."

Copyright 2004 The New York Times Company