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Thread: What Can a Million Buy in Manhattan? Something Average

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    Default What Can a Million Buy in Manhattan? Something Average

    October 15, 2003

    What Can a Million Buy in Manhattan? Something Average

    By DENNIS HEVESI


    SUNLIGHT - Sha Dinour, right, showing an apartment to Brad Caracciolo on the fifth floor at 153 Bowery, on the corner of Broome Street.

    The Census Bureau says that the typical American household made $42,409 last year. At that rate, this family could buy an average-priced Manhattan apartment after just a little more than 21 years, if luxuries like food and clothing were skipped and entire incomes were forked over. And then there's the maintenance.

    The average price for an apartment in Manhattan was $919,959 in the third quarter of this year another record high according to the Douglas Elliman Manhattan Market Report, one of the most comprehensive real estate surveys.

    In part because so many of the sales in Manhattan are in the seven-figure range, the average is skewed upward.

    The median price of an apartment in Manhattan for the third quarter of 2003, the exact middle of all the sales, was $575,000, the Elliman survey found still no bargain for the typical American family.

    This was the first time the average price cracked the $900,000 threshold. Buyers in Manhattan apparently shrugged at concerns about the economy; that $916,959 average surpassed the previous high of $894,617 set in the second quarter of 2001.

    This record represents a rebound for Manhattan apartments. During the weakest period in the last five years the first quarter of 2002 the average price was $788,256.

    "There are few places in the country where it might make sense to pay such prices," said Dr. James. W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. "If you're in the middle of a cornfield in the Midwest, you're going to have a hard time finding someone to resell to. The rich are only willing to buy and live in a few select locations and obviously Manhattan is one of them."

    Those who have never experienced the cold shower of looking for a home in Manhattan might think that $900,000 would buy a fancy five-bedroom apartment with gold-plated faucets, free maid service and one of those concierges who gets you tickets to "The Producers."

    Well, here's the cold shower. Do a quick search of The New York Times on the Web's current sales listings and look for places in the same areas the survey covered: below West 116th Street and below East 96th Street. Yesterday you would have found a dozen apartments for sale for $900,000. There is one three-bedroom apartment, eight two-bedrooms, two one-bedrooms and one place where the new owners will have to build their own bedroom walls.

    To be sure, these are very fancy one-bedroom apartments. One of the units listed for sale, a condominium on West 37th Street, was designed by its Italian architect/owner. Another, on East 73rd Street, has two fireplaces and really high ceilings.

    So how come there are so many people willing to pay that much for a box in the sky? Real estate professionals say there has been a continuing crunch in the number of available apartments and a significant bounce in the luxury market ("luxury" here, of course, is defined as amounts resembling the G.D.P.'s of small Caribbean nations).

    "All this occurred despite lingering trepidation over local, national and international economic conditions," said Jonathan Miller, president of the Miller Samuel appraisal company, which prepared the Elliman report.

    Even billionaires feel bear markets.

    "Clearly, Manhattan is linked to the health of the stock market," Dr. Hughes said. "And so, the stock market rally of the last six months has certainly improved the financial wherewithal of many affluent households."

    The record price of $919,959 was an 8 percent jump from the $849,013 the average apartment sold for in the third quarter of 2002.

    That median price of $575,000 for a Manhattan apartment was unchanged from the previous quarter, but up by 10.8 percent over the median price of $519,000 during the third quarter of last year.

    The report is based on 2,324 co-op and condominium sales collected from many listing agencies. Those totals represented an increase of 13.1 percent over the 2,055 sales recorded in the second quarter of this year, and 3.7 percent above the 2,241 sales in the third quarter of 2002.

    The stock market provided more buyers, but sellers were scarce. By the end of the third quarter, the number of available apartments had dropped to 5,224, 17.7 percent lower than the 6,346 units on the market in March.

    Those sellers who did cash out almost all did well. The average price for studio apartments was $303,895, up by 17.4 percent from the $258,826 price in the same period last year. One-bedrooms sold for an average of $471,531, an increase of 12.6 percent above $418,607 in the third quarter last year.

    In two-bedrooms, the average price was $1,073,966 (this doesn't make that $919,959 look so bad, right?). This was an increase of 6.2 percent over the average two-bedroom's price of $1,011,790 last year.

    The only sellers who did not hit the jackpot were those peddling three-bedrooms. There, the average price was $2,468,286, down by 3.3 percent from $2,553,537 last year.

    For the lucky people in a cramped borough with an apartment that has at least four bedrooms, they got an average price of $5,698,266, up by 4.6 percent over 2002's $5,445,396.

    The study also calculated changes in the luxury market defined as the top 10 percent of all co-op and condominium prices. In the third quarter of this year, that meant an average price of $3,461,532; a 10.6 percent gain over last year's $3,128,424.

    Kirk Henckels, director of Stribling Private Brokerage, the luxury division of the brokerage firm Stribling & Associates, said that the most expensive co-op sale in the first half of this year was about $20 million. "That's versus the highest sale of about $13 million in 2002," he said.

    And the party appears to be continuing. Mr. Henckels said that 2003 stood to rival 2000 for big-ticket sales at least 18 sales of $10 million or more. "It would appear," he said, "that we are about to equal the peak of the luxury market."


    LOFTY ASPIRATIONS - A condo for living and working on West 37th Street, with designs and renovations done by the owner, an Italian architect.


    OPEN CITY VIEWS - A renovated condo with two bedrooms and two baths (both in marble), on the 20th floor at Bristol Plaza on East 65th Street.

    Copyright 2003 The New York Times Company

  2. #2

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    I saw that article. The prices of apartments in New York are ridiculous. Not only is the average one bedroom apartment about $475,000, but on top of that, the monthly common charge and tax payment is about another $900 to $1,500 per month.

  3. #3
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    Getting positively absurd. And the prices just keep going up... :roll:

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    Does it say anything about how much it would cost to rent these apartments? Or the price of a brownstone in, say, Greenwich Village?

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    Location, location, location.

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    NYC Aficionado from Oz Merry's Avatar
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    Corcoran.com have a new feature allowing searches of apartment buildings by name and, after trying a few, I came across this:

    http://www.corcoran.com/property/pro...amp;Ld1=676161

    This is the Langham apartments on CPW.

    Gobsmacked I was when I saw that rent! Now I know it's on CPW and next door to the Dakota (location, location, location) but I didn't think the Langham itself was that remarkable. I've seen rents in the high thousands (and for better and more prestigious properties) but never this high. Although not privileged to have the choice, I can't imagine even the filthy richest person wasting that much money on rent...but, as I say, I wouldn't know....

  7. #7
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    My doctor's office is in the Langham.

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    32K is almost normal for real "trophy" properties. Remember, these are the same folks that rent houses in the Hamptons for $250K per month!

  9. #9

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    My sister lives in Manhattan's West Side, and she tells me that monthly rents on her one-room apartment are going up all the time. I haven't asked her for cold hard numbers yet, but I fully expect her to not be happy about saying them at all. She only manages to stay there because of her well-paying job as a paralegal in Midtown.

  10. #10

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    Although prices to buy real estate have not fallen in Manhattan, rents have actually come down quite a bit. When I returned to Manhattan in June of 2001, the average one bedroom rented for $3,000. I would guess that it's now $2,500. Also, in certain areas, you can find them for $1,700, although for that price it would be in a gritty building and on a gritty street.

  11. #11
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    For the most part, yes. But I'm continually surprised by the good deals people tell me they got - and I'm not talking about rent control. It takes some networking, the luxury of time, and definitely luck, but there are still some good deals out there.

  12. #12

  13. #13

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    January 15, 2004

    TURF

    One Bedroom, Many Bids

    By MOTOKO RICH

    FOR around $470,000, recent listings show, you could buy a four-bedroom, four-bathroom traditional house in Dallas with granite kitchen countertops and vaulted living room ceilings. In Columbus, Ohio, you could buy a sprawling four-bedroom house with two fireplaces, a whirlpool and a ravine outside your front door.

    Or you could buy a one-bedroom apartment in Manhattan.

    Buyers paid an average of $469,960 in the final quarter of 2003 for one-bedroom apartments in Manhattan below 96th Street on the East Side and below 112th Street on the West Side, according to the Douglas Elliman Manhattan Market Overview, one of the most comprehensive surveys of the real estate market in that area.

    Despite such high prices, demand heated up: though two-bedrooms still represented the highest proportion of sales 43 percent one-bedrooms grew from 32 percent of all sales in the last quarter of 2002 to 39 percent in 2003, according to Miller Samuel Inc., the real estate appraisal company that compiles the report.

    The average price of one-bedroom co-ops vaulted, to an average of $444,373, up 7.2 percent from the previous quarter.

    "There's just not enough inventory out there," said Sheila Lokitz, an agent with the Corcoran Group in Manhattan. "And what comes on just absolutely flies off the market." Condos, a much smaller part of the one-bedroom market, fell to $536,634, from $574,580 in the third quarter.

    Buyers could take some relief from the fact that the average price of all co-ops and condos a measure strongly affected by extremes at either the high or the low end was down 1.5 percent, to $903,259, compared with $916,959 in the previous quarter. But the third-quarter figure was inflated by the record-setting $45 million sale of a penthouse at the Time Warner Center.

    Basically, said Jonathan Miller, president of Miller Samuel, "all the indicators are up," as low interest rates, a rebound on Wall Street and a growth of confidence in the economy prompted more New Yorkers to pour money into a dwindling supply of apartments.

    The number of apartments on the market dropped 7.3 percent, to 4,843 at the end of the fourth quarter, from 5,224 at the end of the third the first time in seven quarters that inventories fell below 5,000. "All of our brokers are scrounging around and fighting over the same number of listings," said Steven James, director of sales at Douglas Elliman, one of the city's largest brokerage firms.

    One of his firm's chief rivals, Corcoran, will also release figures today, showing that the average price of condos and co-ops rose nearly 9 percent, to $854,000 in the fourth quarter, compared with $784,000 the quarter before. Corcoran's figures cover Manhattan sales below West 125th Street and East 96th Street.

    "I think the story of the year was coulda, shoulda, woulda," said Pamela Liebman, chief executive of the Corcoran Group. "If you didn't buy in the first half of the year, you spent a lot more money in the second half for the same type of apartment."

    Buyers of one-bedroom co-ops certainly were learning that lesson all year. With mortgage rates low, the monthly cost of buying an apartment was often close to the cost of renting one, or even lower, even though rents dropped by nearly 30 percent, said Neil Binder, a principal at the Bellmarc Companies, a real estate firm in Manhattan.

    "Based on the monthly carrying costs, for the one-bedroom buyer it became a very exciting alternative," Mr. Binder said.

    Then, toward the end of the year, apartment buyers started to panic at the prospect that interest rates might increase or that the improving economy would draw out even more buyers. As a result, bidding wars were common, and those who hesitated or made lowball offers suddenly found themselves priced out of the market.

    For sellers, who just a few years ago were worrying that one-bedrooms were not a good investment, the buying boom has turned into a boon. In September, when MaryJo Palumbo, an agent at Douglas Elliman, took on a listing for a one-bedroom co-op apartment in Chelsea, she advised the seller to price it at $399,000. But the seller decided to ask $425,000.

    At first, offers trickled in: $385,000, $395,000, $400,000. The seller turned them all down.

    Then, in the first week of December, Ms. Palumbo said, four buyers offered the asking price, and one raised it by $11,000. The seller accepted an offer at the asking price, Ms. Palumbo said.

    "People who have been on the fence about buying one-bedrooms are looking at the economy improving and believe that prices and interest rates are going to go up this spring," Ms. Palumbo said. "So they're buying right this second, before anything happens."

    The trend appears to be continuing. Ms. Lokitz of Corcoran said she was supposed to take a client to an open house for a "charming and quaint" co-op on the Upper West Side on Sunday. But with the temperatures icy, the client, who was feeling ill, decided to wait. When Ms. Lokitz called the seller's broker on Monday to arrange a visit, "they already had four offers," she said.

    According to the Elliman Market Overview, the average size of an apartment sold in Manhattan last quarter shrank to 1,280 square feet, from 1,302 in the third quarter and 1,437 square feet in the fourth quarter of 2000.

    "People realize they have to be more receptive to things that normally they might not have been able to accept before," Ms. Lokitz said. "A few years ago, if you said to somebody that you had a one-bedroom for 600 square feet, they were appalled and said, `I can't live in that amount of space.' "

    At the other end of the market, the shrinking supply of two- and three-bedroom apartments hurt buyers hoping to upgrade from their one- or two-bedroom homes.

    The average price of a two-bedroom rose 9 percent in the fourth quarter, to $1,140,377, from $1,045,648 a year earlier.

    In the condo market, the price increases for larger places were even more striking. The average for a two-bedroom apartment rose 7.2 percent, to $1,450,640 in the fourth quarter, from $1,353,520 in the third quarter. A three-bedroom condo averaged $3,278,823 in the fourth quarter, up 13.2 percent from $2,895,705 in the quarter before.

    Amanda Brainerd, an agent at Warburg Realty, said condo prices were driven in part by the fact that the supply was limited, but also by an increase in demand from relatively young buyers who were finding it difficult to meet the financial requirements of co-op boards.

    "Let's say there's some 38-year-old guy on Wall Street who makes $1.2 million a year in salary, has three kids and wants to buy a $5 million condo," Ms. Brainerd said. To qualify for a co-op, she said, the buyer would probably have to show that he had $10 million to $15 million in liquid assets. "He hasn't had enough time to sock away $10 million or $15 million in cash," she said. "But if you're buying a condo, you just need enough money for a down payment and to be able to pay your monthly mortgage. The higher the prices get, the higher the stakes are with the co-op boards."

    Sales of two- and three-bedroom condos picked up in the last quarter of the year. For example, Robert E. Doernberg, director of condominium sales at Warburg Realty, said that at Bridge Tower Place, a 38-story skyscraper at 401 East 60th Street, five three-bedroom apartments sold in the fourth quarter, with price rises of more than 10 percent within just three months.

    "Some of them were languishing on the market, and all of a sudden boom, boom, boom! they sold in the fourth quarter," Mr. Doernberg said. He said one sold for $1.85 million at the beginning of the quarter, and an identical unit on a different floor sold for $2.1 million in December.

    Although brokers have been exchanging hyperbolic anecdotes about the return of the "super luxury" category above $3 million the Elliman Market Overview showed that in the fourth quarter the average sale price of luxury apartments fell 7.8 percent, to $3.19 million, from the prior quarter. But that might have been in part because buyers were having to make do with slightly smaller apartments: the average square footage of a luxury apartment dropped to 2,516 square feet, from 2,702.

    That's almost an incentive to move to Dallas. That four-bedroom, four-bathroom house with granite countertops and vaulted ceilings, for $470,000? It's 3,189 square feet.



    Copyright 2004 The New York Times Company

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    April 15, 2004

    Apartments Going Up, to an Average of $1 Million

    By MOTOKO RICH

    The average sales price for an apartment in most of Manhattan rose to $998,905 in the first three months of 2004, surpassing the previous record of $919,959, set in the third quarter of last year.

    At a time when economists and homebuyers have been wondering whether a housing bubble is on the verge of popping, the average sales price climbed to a record high, according to the Douglas Elliman Manhattan Market Overview, one of the most comprehensive surveys of the real estate market below 96th Street on the East Side and below 112th Street on the West Side.

    According to Miller Samuel, the appraisal firm that prepared the Elliman report, the median price - the exact middle of all apartment sales - in Manhattan during the first quarter was $625,000. But even that was a record, up 21 percent from the same period a year earlier.

    Figures from the Corcoran Group, one of the largest real estate brokers in Manhattan, showed that average prices breached the psychological barrier of $1 million in the first quarter of this year, rising 32 percent, to $1,001,000, from $760,000 in the same period last year.

    The high averages posted last quarter have all been skewed by high-priced sales as more people have bought bigger and more expensive apartments than at the same time last year. Many of the price increases were driven by bidding wars and buyers offering well over asking prices. According to Corcoran, the number of deals that closed over the asking price was 57 percent in the first quarter, up from just 23 percent in the same period last year.

    Dottie Herman, president of Prudential Douglas Elliman Real Estate, said the increase was simply a case of supply and demand. "There really is no supply," she said. Indeed, according to the firm's market overview, inventories of available apartments for sale continued to fall in the first quarter to 4,299 apartments, down 32 percent from 6,349 a year ago.

    In the fourth quarter of last year, prices dipped slightly, to $903,259. That was in comparison to a third-quarter figure that had been inflated by the record-setting $45 million sale of a penthouse at the Time Warner Center. The increase in prices in the first quarter of this year has delighted brokers, but also discouraged buyers.

    Ms. Herman said that the lack of available apartments had incited bidding wars, and that she believed the market was now even more frenzied than during the hot market of 1999 and 2000.

    Such numbers have meant sticker shock for a lot of buyers. Ann McIndoo, a 50-year-old speechwriter for authors who is trying to move to Manhattan from Orange County, California, thought that with $1 million, she would be able to find a spacious two-bedroom apartment here.

    But when she started seeing what her money could buy in Manhattan, she was stunned, and began raising her offering price from $1 million, gradually hitting $1.8 million. She also scaled back the list of demands she gave her broker: "When I first gave him my list, I said, 'I want two bedrooms, lots of light, closets, a window in the kitchen.' But when I started looking at things, I found that just isn't available here. Or you need three or four million to do it."

    Bill Billitzer, the Douglas Elliman broker who is working with Ms. McIndoo, said: "For people that have been in their homes for some time, $1.5 million is a lot of money. You can't just tell them 'no, you've got to increase your budget by 30 to 40 percent.' " He said he had several clients who had given up on buying for now and were renting instead.

    The crazy state of the market, though, makes some buyers wonder whether they will see a repeat of the late 1980's and early 1990's, when prices hit record highs and then plunged. With so much home buying driven by historically low mortgage rates, economists are watching for the impact of a probable rise in interest rates as early as this summer.

    "The biggest danger to the market is that rates will go up," said Karl E. Case, a professor of economics at Wellesley College and a partner in Fiserv CSW, a real estate research firm. Still, he said, most people regarded real estate as a better investment than stocks or bonds, a factor that would likely keep prices from collapsing altogether.

    Pamela Liebman, chief executive of the Corcoran Group, said rising interest rates would at first prompt even more people to enter the market. "When people start to see interest rates picking up, they're going to try even harder to get in before they go even higher," she said. "It's like a battle cry."

    Even if prices do come down, said Hall F. Willkie, president of Brown Harris Stevens, a real estate brokerage firm in Manhattan, housing will remain a good investment. "The only people in my entire career that I've ever seen lose money are those that by circumstance buy in a high market and then they are forced by circumstance to sell at a low," he said. "Barring that, if you look over time, even where there are dips in values, the value of real estate over time continues to go up."

    The bidding wars have become a particular problem, said Chuck Sage, a broker with Douglas Elliman, because buyers were having trouble securing mortgages when bankers appraised the apartments for less than the purchase price. "If somebody is buying something for several thousand dollars more than what the apartment is actually worth, then the buyer may not get the amount of money that you need to finance the apartment," Mr. Sage said.

    Despite such worrying trends, Jonathan Miller, president of Miller Samuel, said he did not believe the market was approaching the troubled waters of the early 1990's. The difference, he said, was that in the late 1980's, a boom in co-op conversions and condo development flooded the market with supply for which there was no demand. This time around, supply is in check and low interest rates are keeping demand high.

    That is not much comfort for the buyers who are struggling to find an apartment. Ms. McIndoo, the relocating speechwriter, said she would keep looking. But, she said, "I'll probably have to spend more money."



    Copyright 2004 The New York Times Company

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