Location: ‘The worst is yet to come; there is a blood bath coming,’ the organizer of Corcoran’s housing market report said recently. Are you prepared for a bad 2009?
Ms. Del Nunzio: Well, I don’t know what crystal ball he has. But we’re always prepared for anything that happens. That’s our job.
Last May you said in an interview that sales and prices were ‘still strong,’ and in September you said, ‘Everyone continues to keep their appointments.’ What’s life like now?
The thing is always supply and demand. And if you talk about the upper end of the townhouse segment, you have very limited supply, and you always seem to have a greater demand. For example, if you wanted a 20-foot renovated house between Fifth and Madison, you have three choices.
But several of the most expensive properties on the market, from 1020 Fifth Avenue, the Mark and Trump Park Avenue to 15 Central Park West or mansions like 22 East 71st, have been sitting around for maybe a year or more.
Well, if you talk about properties that have been on the market for years, the most amazing example of something that sold—after 19 years!—was 603 Park, which sold for $31.5 million [in July] to the one person that wanted what it was.
For over a year you’ve marketed a duplex at River House for $35 million, but its owner, former WorldCom director Francesco Galesi, actually first listed it in 2005 for $50 million. Do you tell clients to get realistic, especially now?
Clients that put an unusually high price on a property and leave it there are not that concerned about whether or not they sell it. It’s sitting there; it’s available to someone who might see it for the treasure that it is, or who might want its assets; in that case, it has 50 windows.
As recently as last May, the Russian nickel magnate Oleg Baibakov paid $13.5 million, $500,000 over your asking price, at the Time Warner Center. Are you starting to miss wealthy foreign buyers?
What they are, perhaps, is less frequent; but they are nevertheless there. … Look, just in December, at 15 Central Park West, 38A sold for $27 million, which represented $9,480 a square foot. What do you take that as, an anomaly?
Yes, because there’s a duplex in the building that’s been quietly asking $90 million, and a neighbor who may want $75 million. And neither condo has sold.
But those apartments that you’ve mentioned are, one could say, vanity prices.
You made what is still the biggest-ever residential deal in New York City, selling the $53 million Harkness Mansion to billionaire J. Christopher Flowers in 2006. In retrospect, were mega-deals like that slightly absurd, something out of a dream?
If you look at that, I think the price paid per square foot was something like $2,650. We just talked about an apartment fetching almost $9,500 a foot. He has 20,000 feet in that building! What is that ultimately going to be worth?
So in retrospect, now that you’re almost three years removed, it doesn’t seem absurd?
You can’t look back on the past and say it was absurd. It was the going rate at that time. If he hadn’t done that, somebody else would.
In August 2007, you told The Observer, ‘I do think that the $100 million house is next.’ Do you still think so?
If you take a house that’s got 20,000 feet, and if it were $5,000 a foot, there’s your $100 million.
You’re saying that, deep down in your heart, you think that’s still a possibility?
I’m saying that if you look at real estate over time in New York, especially houses, they have, over time, appreciated in value.
Powerful high-end New York agents used to justify sales like Harkness by comparing real estate to art. (For example, ‘Architect Rosario Candela is our Picasso.’) Ironically, art prices turned out to be inflated as well.
There’s one difference. Buying a piece of art is a discretionary purchase. Buying a residence is something you need. It’s going to rain; you have to go inside. If you don’t want water on your head, you have to buy a residence of some sort. And, yes, some of these great apartments and houses are masterpieces created by architects in the past who did a certain kind of construction which would apparently not be producible today.