While the Bubble Balloons-Tales of Real-Estate Mania

The Sky’s the Limit: Passion and Property in Manhattan, by Steven Gaines. Little, Brown and Company, 271 pages, $26.95.

Real-estate gossip is the fuel of dinner-party banter between obsessed Manhattanites: bidding wars and co-op boards, the clash of wealth, fame and power. Sure, today’s cocky rock star can sign autographs for private-school kids up and down Fifth Avenue, but the thoroughly unimpressed co-op board may squash his dreams of a posh aerie. Flanked by bodyguards and flunkies, the spurned star hops in his Hummer to celebrity exile in Tribeca.

With millions packed together on this island, could apartment living (and buying) ever be truly idyllic, or simply peaceful? Communal living-once verboten in high society-first gained traction around the mid-19th century. In 1879, an idealistic pamphleteer named Philip Hubert circulated a proposal for collective housing as a way to better the lives of New York’s tenement dwellers. “The original intent of the co-operative plan was actually quite utopian,” writes Steven Gaines in The Sky’s the Limit, an insider’s account of our frenzied real-estate market. Two years later, Mr. Hubert’s thinking moved in a different direction, and he began to champion a radical idea for co-existence within grand buildings, filled with modern amenities and “like-minded men.”

As in his previous book, the best-selling Philistines at the Hedgerow (1998), Mr. Gaines juxtaposes the formality of old money and the flashiness of the nouveau riche. In both the New York and East End luxury real-estate markets, the ideal residence is determined by factors other than floor plans, or whether the kitchen comes equipped with a SubZero refrigerator. Brute snobbery plays a starring role. In The Sky’s the Limit, Mr. Gaines skillfully unravels Manhattan’s rich social fabric, showing how some longstanding delineations-and prejudices-still exist, while others are melting away.

He begins with Tommy Hilfiger seeking to buy an apartment at the storied 820 Fifth Avenue. For the first 30-odd pages, the author plods through this contentious transaction that was “deciphered like some sort of a social Rosetta Stone.” Few believed the fashion magnate, a purveyor of baggy trousers, would ever breathe the rarefied air of this opulent address. Mr. Hilfiger had to prove to the board that he was an upstanding family man and a noted philanthropist, that he had persevered from humble beginnings in true Horatio Alger fashion. “The history of Fifth Avenue has always been that of new money trumped by newer money,” writes Mr. Gaines. Mr. Hilfiger had plenty of new money in the bank (and a weighty recommendation from Leonard Lauder).

The board approved the deal, and renowned Upper East Side brokers patted their sweaty, furrowed brows. But Mr. Hilfiger never moved in! Following his divorce, he flipped the apartment for a huge profit, heading downtown to Tribeca (no surprise), picking up a $3.5 million penthouse condo.

Throughout the book, Mr. Gaines relies on high-end brokers-celebrities themselves in certain circles-to show how the process of luxury buying and selling unfolds. Boutique brokers like Edward Lee Cave and Alice F. Mason represent the stodgier side, content to work hand-in-hand with the co-op boards to keep out the “wrong people.” Then there are the media-savvy “superbrokers” like Linda Stein, Dolly Lenz and Michael Shvo, who focus mostly on multimillion-dollar condominium sales, where getting inside the door depends solely on one’s bank statement.

For those clients who still lament the passing of Mrs. Astor as the end of “real society” almost a century ago and are vying for the “good buildings,” proper decorum is imperative. “I’m not selling brick. I’m selling lifestyle,” says Mr. Cave. Not surprisingly, the boutique broker shuns advertising and only reluctantly allowed for his company to start a Web site (how gauche). Ms. Mason is renowned for her salon-a succession of intimate gatherings of the cultural elite that stretches back to the 1970’s (think Woody, Norman and Mort). More recently, Bill Clinton held the attention of her guests into the early-morning hours.

Lavish condominiums-quite unlike the strict Park and Fifth Avenue buildings-keep popping up. The Time Warner Center and the Richard Meier towers downtown have attracted foreign investors and Hollywood types who care little for the co-op board game (or know they wouldn’t pass the test). This is the crowd that can’t fall asleep without their BlackBerry less than an arm’s length away. Linda Stein (“broker to the stars”) boasts celebrity clients like Bruce Willis, Steven Spielberg and Andrew Lloyd Weber. She joyfully uses “street slang,” if needed, to woo golden-toothed rappers sporting plenty of “bling-bling,” as she might say.

But though Mr. Gaines presents what at first seems like a stark dichotomy, it should be noted that boutique broker Alice Mason represented Mr. Hilfiger in passing the co-op board. So there’s a bit of flux in today’s marketplace, after all.

In addition to the profiles of high-end brokers, wealthy dowagers and some of Manhattan’s premier buildings, there’s a copious selection of juicy anecdotes, like how Sting hurriedly purchased a Brooks Brothers suit for his board interview, appearing as a straight-laced businessman (and keeping mum, surely, about tantric bliss). It’s still interesting to read about Richard Nixon’s anticipated rejection by the board at 19 East 72nd Street, or Madonna and Sean Penn getting turned down at the San Remo. (That was in 1985; it sure is hard to make gossip seem fresh 20 years later.)

Although not officially a sequel, The Sky’s the Limit sticks to the same formula as Philistines at the Hedgerow, and readers who enjoyed the Hamptons book, or click ravenously on Curbed.com throughout the day, will certainly enjoy Mr. Gaines’ latest effort. The talk in today’s real-estate world-where records are still being broken-revolves around the will-it-or-won’t-it bursting of the bubble. Property voyeurism is regularly defined as the new pornography (Mr. Gaines describes one co-op as a “vortex of desire”). In these exciting, uncertain times, Steven Gaines’ unique vantage point, deep within the luxury real-estate world, is just the ticket.

Michael Calderone writes the “Manhattan Transfers” column for The Observer.