15 PERCENT INCREASE IN PRICE, BUT 55 PERCENT SALES DROP The city’s three largest residential real-estate brokerages have finally agreed on something: The luxury co-op market has seriously downshifted.
According to second-quarter and mid-year reports by the three companies–Brown Harris Stevens, the Corcoran Group and Douglas Elliman, which together handle roughly 70 percent of the city’s residential real-estate transactions–the number of sales of co-ops on Fifth Avenue, Park Avenue and Central Park West has decreased significantly since April.
“There hasn’t been an influx of new product,” said Pamela Liebman, president and chief executive of the Corcoran Group. Comparing this year’s numbers to last year’s, she added: “Last year, we had tremendous Wall Street money and the perception of more to come.”
Of course, the three companies don’t agree on how to measure the market, but they all acknowledge that the luxury co-op sliver of the pie–fewer than 5 percent of all co-op sales, with an average price in the millions–needs analyzing. According to Douglas Elliman’s report, which attempts to survey the entire market, 23 luxury co-ops–defined as apartments on Fifth Avenue, Central Park West and Park Avenue with two or more bedrooms–sold in the second quarter of 2001 (April through June). Elliman said that figure represents a 55 percent drop in the number of sales compared to the same period last year.
The Corcoran Group’s “Mid Year 2001″ report, which also measures the entire market, shows 131 closings on Fifth Avenue, Central Park West and Park Avenue in the first six months of this year–only 29 percent of the 458 closings Corcoran reported on those avenues for all of last year. (Corcoran measures one-bedroom apartments as well.)
And while Brown Harris Stevens does not compile any data based on the number of sales–”I tend to distrust volume as an indicator,” said Lawrence Sicular, executive director of appraisal and consulting for Brown Harris Stevens–the company acknowledges that there have been far fewer transactions on Fifth Avenue, Central Park West and Park Avenue lately. Mr. Sicular said this portion of the market had shown a “definite” downward turn. Comparing the second quarter of this year to the first quarter, Mr. Sicular said, both the number of transactions and the dollar value of those transactions are lower.
U2 singer Bono Vox’s purchase of a co-op on the 16th floor of the Eldorado, 300 Central Park West, for $3.4 million was one of the sales included in the data. Under his given name, Paul Hewson, Bono bought the three-bedroom, four-bath apartment in April.
Despite a lower number of luxury co-op sales, said all three firms, the average price in this little sector of the market continues to escalate. Brown Harris Stevens reports that “the overall average cooperative price, to date for 2001, is slightly lower than last year’s average,” but that prices for 2001 are “generally higher than for 2000” in Manhattan’s most expensive neighborhoods. The exception is co-ops of nine rooms or more, where average prices have fallen from $6.3 million last year to $5.4 million so far this year, according to Brown Harris Stevens.
Elliman, however, reports a 15 percent rise in price in the luxury co-op market over the second quarter last year, but a 25 percent drop since the first quarter of 2001.
After recession anxiety, most buyers agree that pricing–or overpricing–at the highest end of the co-op market has been the biggest obstacle in getting deals to close this year. “Sellers are still unrealistic in their pricing,” said Kathy Steinberg of Edward Lee Cave Realty. “And in August, it is almost a standstill–I don’t feel it has picked up at all.”
“All year long, there were instances of people putting property on the market with exceedingly high asking prices,” said Roger Erickson of William B. May. “Absolutely absurd asking prices. If they are priced correctly, they will sell.”
Corcoran, for one, has taken measures to get brokers working harder in this sector. “Starting six months ago, we started giving seminars to our brokers in terms of how to deal with this market,” said Ms. Liebman. “And one thing we started to look at was price reductions and proper pricing. The market has been rising so rapidly that everyone has been pricing ahead of the line, and so when the market starts receding and you’ve priced it ahead of the line, all of a sudden it’s way overpriced.”
Brokers may have a hard time convincing sellers of that. The Elliman report also shows that sellers have been holding firm to their prices, at the risk of having their property languish on the market. The report showed a sharp increase in the amount of time Upper East Side luxury co-ops remain on the market: 153 days, up from 128 days–an increase of a little more than 16 percent.
UPPER EAST SIDE
THE FINAL CHAPTER FOR 9 EAST 64TH STREET? If you’ve walked down 64th Street lately headed toward Central Park, you may have noticed that the gargantuan townhouse with a large gold No. 9 above the double doors is still under renovation. Over most of late July and early August, the doors have been flung open, revealing a new marble foyer and a construction crew in surgical-scrub booties sloshing around on it.
In fact, the house has been under construction for years. It has changed hands four times in the last decade–from David Geffen to labor lawyer Theodore Kheel to a Greenwich, Conn., developer to Sony Music chief executive Tommy Mottola and an investment banker. Mr. Mottola bought a condo in the building for $13.3 million in 1999, and his neighbor reportedly bought the top floor for almost $4 million.
A construction worker at the house in mid-August said that Mr. Mottola’s renovation to his 11,456-square-foot portion of the 35-foot-wide, five-story house–which includes a basement and cellar–was scheduled to be completed by Aug. 20. Then he added, “If they don’t change their minds.”
The house has been plagued with change. Mr. Geffen wanted a mansion for himself; Mr. Kheel envisioned a geothermally heated nonprofit called Foundation House topped by high-end rental apartments; but finally, the most profitable option was high-priced condos.
And finally, it seems, the place will be inhabited. Patricia Kiel, senior vice president of corporate communications at Sony Music, said that Mr. Mottola and his wife, the Spanish singer Thalia, “are just moving in.”
Part of their elongated and elaborate renovation had to do with a great deal of marble. “The bathtubs started as blocks of marble the size of cars,” said one worker. “The
only thing from Home Depot in here is the two-by-fours; everything else is handcrafted.”
Mr. Mottola hired decorating firm Pembroke and Ives and plans to install a high-tech security system on the first floor. The pièce de résistance , however, is the fact that the city’s building departments granted Mr. Mottola’s contractor, Rocco Construction, permits to add a curb cut, so Mr. Mottola can slip from his car to his doorway without much fuss–a major luxury for an Upper East Side townhouse. Michael Jackson once decided against buying an Upper East Side mansion because he couldn’t get such a permit.
UPPER WEST SIDE
KID STAR HAYLEY MILLS MAKES IT IN MANHATTAN London-born Hayley Mills, the leading little lady in Disney’s Pollyanna and The Parent Trap , saw the dark side of life in New York in April 2000, when the now-55-year-old actress was offered a role in an Off Broadway production of the Noël Coward play Suite in Two Keys . The show was shuttered the day after it opened. But it seems all is good with the city again.
In June, Ms. Mills bought a two-bedroom apartment in a prewar building at 320 Riverside Drive, at 104th Street. The sellers were asking $795,000 for the place, but a bidding war ensued and Ms. Mills eventually bought it for well over $800,000.
Ms. Mills was one of the first people to see the apartment when it came on the market in April. In fact, she saw it twice in the first three days and then made a bid even before the broker, Mary M. Stock of Douglas Elliman, had a chance to show it at an open house. But there were other interested buyers, and Ms. Mills had to up her offer considerably in order to get it. Still, by the time the apartment showed up on Douglas Elliman’s Web site, it had sold. Apparently, it was worth it: Sources say the apartment is in great condition, with prewar detail like herringbone floors and beamed ceilings, and lots of light. Like Broadway!
25 Sutton Place South
Two-bed, two-bath, 1,350-square-foot co-op.
Asking: $1.15 million. Selling: $1.14 million.
Charges: $1,113; 48 percent tax-deductible.
Time on the market: one and a half years.
WHAT THEY DON’T TELL YOU ON PARK AVENUE Large and glamorous Park Avenue apartments aren’t always the most desirable. The couple that bought this two-bedroom apartment between 56th and 57th streets left their sizable space on the Gold Coast because they wanted something–gasp–smaller. They weren’t determined to leave Park or Fifth. “We looked everywhere,” said their broker, Eileen Mintz of Douglas Elliman. But they soon found that Sutton Place–and specifically this building–suited all their needs. “This building had everything they wanted: a garage, a gym, and the apartment was beautifully renovated,” said Ms. Mintz. The apartment has river views from the living room and master bedroom which you can’t get from Park Avenue, but even more important was the access to a garage. “When they lived in a prewar apartment on Park Avenue, they had to walk a few blocks to get to a garage,” said Ms. Mintz. “Now it is right in the building.”
62 West 11th Street
One-bed, one-and-a-half bath, 950-square-foot co-op.
Asking: $895,000. Selling: $875,000.
Charges: $935; 65 percent tax-deductible.
Time on the market: seven months.
SINGLE MOM JACKS UP THE PRICE TO LURE BIG SPENDER For months this apartment, the parlor floor of a brownstone, languished on the market with an asking price of $825,000. One might have thought that the reason was its eccentric design. Sure, it had 14-foot ceilings, lots of moldings and other design elements worthy of notice in a few design magazines–including just one wall in the whole place, separating the bedroom from the living area. (The bathroom opens right into the bedroom.) But the trouble, as it turned out, was that the asking price was too low. After six months, the seller–a woman who’d recently had a baby–was getting desperate for more space and decided to try a new broker. Enter Jerry Senter of the Corcoran Group, who immediately jacked up the price by $70,000. “They weren’t bringing in the right kind of person” at $825,000, said Mr. Senter. Less than a month later, someone wandered in looking for something “dramatic and fun.” The trick worked.
39 Fifth Avenue
One-bed, one-bath, 850-square-foot co-op.
Asking: $725,000. Selling: $725,000.
Charges: $1,090.85; 47 percent tax-deductible.
Time on the market: three weeks.
DÉJÀ VU Most buyers dream of spending a night or two in a home before they write the check. The woman who bought this apartment actually got to, sort of. The apartment directly upstairs belonged to a friend, and she used to crash there
before moving to New York. The building–one of the smaller ones designed by apartment architects Bing and Bing–has four apartments per floor, a nice lobby and a great location, between 10th and 11th streets. When she came to the city permanently, the woman found nothing she liked as much as her friend’s place. Then she heard about an apartment in the building being on the market. She checked with the elevator man, who pointed her in the direction of listing broker Rochelle Bass of Bellmarc Realty. The fact that the apartment had a large fireplace–”really like a hearth,” said Ms. Bass–and was newly renovated only made it more desirable. It now has a top-of-the-line white kitchen with marble floors and countertops, a beige marble bathroom and restored brass and crystal doorknobs. She quickly outbid the others interested in the place–finally agreeing to pay the asking price–and passed the board with no problem.