A High Rise in Manhattan Apartments
With a little optimistic measuring, the new listing on East 59th Street can be seen as slightly above average, in one respect, for apartments being sold these days in much of Manhattan: If you count the narrow “planting balcony,” and perhaps part of the hallway, the two-bedroom unit overlooking the East River may be a sliver larger than the 1,366-square-foot average size of the condos and co-ops that change hands nowadays.
But in another respect, that apartment, which was placed on the market last week, is a tad below average: The asking price is a mere $995,000.
That’s just under the $998,905 average price for apartments sold in the more select neighborhoods of Manhattan during the first quarter of 2004, according to a newly released survey.
That average sales price represents a 28.2% jump from the same period a year ago, when the average unit went for $779,112. It’s also a sizable increase over the last quarter of 2003, when selling prices averaged $903,329.
It’s higher even than the third quarter last year, when the average was skewed upward by a single headline-grabbing sale -- a penthouse for $45 million.
And while the record average does not quite break the magic $1-million barrier, “We came within a couple of thousand,” said Jonathan Miller, who compiled the survey at his Miller Samuel appraisal firm. “And I think for all intents and purposes, the psychological threshold has been breached.”
Expressing amazement at housing costs is a longtime sport here, much as it is in Los Angeles, where a survey released last week found that selling prices for the first quarter of 2004 had jumped a similar 29% from a year earlier, lifting the median price of a home to a record $375,000.
The New York statistic, which is in a report that Miller compiled for the Douglas Elliman real estate company, does not cover all the city. It reflects sales only in Manhattan, the most expensive of the five boroughs, and even there only units below 96th Street on the East Side and below 112th Street on the West Side, meaning that neighborhoods on the northern end -- such as Harlem and East Harlem -- were excluded.
In addition, the average price is driven up by the multimillion-dollar price tags for luxury condos and co-ops (in which residents own shares in the building) with the most elite addresses on the likes of Fifth and Park avenues. The median price for all sales was considerably lower, a comparatively modest $625,000.
But as home shoppers followed the Sunday ritual of touring open houses, the talk was of the higher number -- the average price -- and how it had edged up to the brink of $1 million.
The question was: What could you get for that average price?
At the two-bedroom unit on the East Side, the two brokers from Douglas Elliman emphasized the view not only of the river, but of the 59th Street Bridge, and the fact that the building was a “condop,” a co-op with condo rules, meaning “there’s no board approval” -- no panel with veto power over your sale.
At another two-bedroom unit priced almost exactly at the average, but on the Upper West Side, brokers from another of the leading real estate firms here, the Corcoran Group, promoted the building’s swimming pool and their fifth-floor listing’s 1,000-square-foot terrace.
The catch was that the terrace appeared to be slightly larger than the apartment, which had no room for much more than a bed in the second bedroom. And don’t count on getting much closet space for its $999,000 asking price, much less room for a washer and dryer.
“The building doesn’t allow them,” Scott Moore dutifully informed the first couple to attend his noon open house at the unit at 275 W. 96th St., just off Broadway. The couple, Cynthia and Calvin Tsang, rent but are expecting their first child, so they are looking to buy -- and had the same reaction to the discovery that a $1-million investment would leave them trudging to the basement to do their laundry.
“Ridiculous,” said Cynthia Tsang, who is an art director, “but it’s something we can’t do anything about.”
A few minutes after they left, in came Valentina Sapritsky, who has been “looking and looking” for eight months. But with her, too, it was more a case of sticker shock than love at first sight.
“This apartment for a million is ridiculous,” said Sapritsky, who was hoping to buy her first place after raising three children with her scientist husband, who exports medicines to Russia, their home country. “Do you look at the ceiling?” she asked. “Very low.”
The market clearly is not suited for overly hesitant buyers. There’s not an abundance of units for sale, and those available sell relatively quickly -- an average of 98 days so far this year, down from 133 days the quarter before.
“They sold one on the second floor for $10,000 under a million,” doorman Richard Giaimis reported as Sapritsky left the high-rise building. “Thirteen years ago, we’d have 20 apartments vacant. No more.”
Like the real estate agents, the doorman is a talk-it-up type, telling another couple looking for the open house, “This is an ‘A’ building. 24-hour security. All-union help. Everyone’s trained.”
The new pair are Edina and Ian Silver, a fashion editor and English-born investment banker in their 30s, who have been married a year and rent an apartment a block north. The $1-million average is “what everybody’s talking about,” Edina says.
The Silvers know they could “go to Jersey” and get a big house with land. But “we’re trying to convince ourselves it’s worth it,” she said, “so we can stay here.”
They also know that many disbelieving shoppers keep talking about “the bubble,” and how prices must tumble. But “it hasn’t happened,” Ian said.
Real estate executives echo that buy-now notion amid speculation that interest rates could rise later this year, increasing the cost of borrowing money -- thus undercutting perhaps the leading factor fueling the current bull market.
“We don’t hear the word ‘bubble’ much any more,” says Scott Durkin, chief operating officer of the Corcoran Group. “People who were talking about a bubble last year are calling themselves fools this year. Prices have gone up 30%. They were not buying and now regret it.”
The open house is an hour old at the $999,000 Upper West Side apartment when the doors open for the same ritual at the $995,000 unit on the Upper East Side, the place with the river view and narrow planting balcony but more living space. The living room there is 18 by 17 and the “master chamber” 17 by 13, and it has a whirlpool tub to boot. The brokers also note that the high-rise building at 418 E. 59th St. has only two apartments per floor and is “full-service.”
But they also acknowledge some surprise at how the sort of two-bedroom unit that would have sold for under $350,000 in the late 1980s carries nearly a $1-million price.
Howard Margolis and Bruce Solomon, the two Elliman partners, said they stopped doubting the trend, however, when they recently listed a one-bedroom, 625-square-foot fixer-upper. “Three weeks ago Sunday, we had 125 people at its first open house,” Solomon recalled. “And on Monday we had six offers. We were asking 495 and went to contract at 540,” meaning $540,000.
“Of course it was a 40th-floor apartment,” he added. “It did have wonderful views.”
