“That’s a condominium,” her mother replied. She said she spent the rest of the trip rolling the word “condominium” off her tongue.

“I think I was predestined to go into real estate,” she said. Years later, when visiting her realtor aunt in Beverly Hills, she said the interest still hadn’t flagged. All the other kids wanted to swim the pool. “I just wanted to go look at the houses,” she said.

Pamela Liebman, REBNY Honoree. (Illustration by Joao Maio Pinto)

It’s been 27 years since the University of Massachusetts, Amherst graduate walked into a small realtor’s office in Manhattan looking for a job. “You seem like the restless type,” Barbara Corcoran told her. “I don’t know if you’re going to stick it out.” But she has and then some. Ms. Liebman has helped grow the company from 30 people and two offices to a national firm with 2,200 agents and 42 offices. You can now find Corcoran signs in Palm Beach, the Hamptons, Manhattan and Brooklyn.

It’s hard to image that the busy executive with a husband and two children has room for anything else but work and family, but this year’s recipient of the REBNY Kenneth R. Gerrety Humanitarian Award makes time to help in the fight against cancer, advocates for military vets and helps open up ball fields for inner-city kids. In 2001, when a family friend’s 5-year-old son was found to have leukemia, she stepped up to help start the Wipe Out Leukemia Forever Foundation.

“It’s heartbreaking,” she said. “No family should have to go through that.” The organization has raised over a million dollars through golf outings and fund-raisers and has endowed a research lab at Colombia Presbyterian Medical Center to continue to work toward the goal of eradicating the cancer. Her friend’s son is in remission. He’s now six feet tall and plays three sports, said Ms. Liebman. “You would never know,” she said.

She has furthered her fight against the disease, recently becoming involved with the American Cancer Society’s CEOs Against Cancer. Ms. Liebman has also spent four years on the board of the Intrepid Sea, Air and Space Museum. Although she did not have a hand in bringing the space shuttle Enterprise to the deck of the aircraft carrier, she does emphasize the important work the organization does promoting awareness of the sacrifices veterans make. The museum’s Intrepid Fallen Heroes fund has raised $55 million to build a rehabilitation center at the Brooke Army Medical Center in San Antonio, Texas, to treat disabled vets.

“The attention that they bring to veterans is important to the whole world,” Ms. Liebman said.

Recently she has joined in the fight against urban obesity by helping raise money for the Randall’s Island Sports Foundation. The organization provides funds for the care and upkeep of playing fields on the island so that inner-city kids have a place to play in the summer. “Private school kids aren’t the only ones who should have a place to play,” said Ms. Liebman. “The playing fields help level the playing field.”

If all that doesn’t prove her worthiness for the Gerrety Award, her in-house charity, Corcoran Cares, should do the trick. Started six years ago, the organization consists entirely of brokers and managers who donate time and money to needy organizations in all the cities were Corcoran has offices. So far they’ve managed to raise over $1 million.

Ms. Liebman also serves on the Executive Committee of REBNY and the Board of Governors.

“[REBNY] is the single most important voice for the real estate community in New York City and New York State,” she said. “They look out for the future of what I believe is the most important city in the world.” She also touted REBNY’s Friend’s in Need Fund, an emergency fund set up to help members who have fallen on hard times. “They take care of their own people when they’re in need,” she said.

Looking ahead further into 2012 and onward, Ms. Liebman warned that there is a major shortage of residential housing stock in Manhattan. “The city is suffering from a lack of inventory due. The pipeline of construction projects dried up after Lehman,” she said. “We need the banks to loosen the purse strings.”

Always the civic booster, Ms. Liebman said she looks forward to the day that happens. “We’ve got the greatest developers in the world. We need to let them do their jobs,” she said.

What must have really bothered the brokers, this small batch in the running to have the odd honor of listing Bernie Madoff’s two-floor apartment between Park and Lexington avenues, is that they were all corralled together. “It was a strange and, frankly, slightly insulting way to handle it,” one broker there said. “Everyone in that room has pitched pretty important exclusives. I’ve never had to go on a cattle call before.”

Last year, when agents auditioned to list the late Brooke Astor’s Park Avenue duplex, they were interviewed separately in her famously lacquered library. It went relatively smoothly—even though they had to smile and nod while sitting in front of her scandal-stained son, Anthony Marshall, plus bankers from the firm that became Astor’s court-appointed guardians.

The broker meeting for the Madoff penthouse, which has been rumored to be going on the market since January, was stranger. “Everybody kind of wandered around the apartment, and they herded us into the living room,” another broker said. “I just don’t see how they can make an evaluation on who to use.”

There are a lot of options. According to three sources, brokers that have been contacted include Corcoran’s Sharon Baum (famous for her SOLD 1 license plate and its matching diamond brooch); John B. Glass and Caroline E.Y. Guthrie from the blue-blooded Edward Lee Cave division at Brown Harris Stevens; Stribling’s Alexa Lambert, who has handled sales at the Plaza; Sotheby’s top broker, Serena Boardman, and vice president Anne Corey; and Elliman’s Daniela Kunen and Sabrina Saltiel, who are listing the incarcerated Phillip Bennett’s Park Avenue duplex penthouse, plus a lesser-known colleague, Whitney Gettinger.

They came armed! Ms. Baum had Corcoran CEO Pamela Liebman with her; Ms. Lambert had her firm’s founder, Elizabeth Stribling; and Elliman CEO Dottie Herman was there along with the head of the firm’s Manhattan brokerage, Steven James. John Burger, the Brown Harris broker who told The Times this month that he’d offered to forgo a commission, was not there.

As it turned out, the meeting with the federal marshals was more of a group info session than an audition. “What they said was, ‘I wish we could give it to all of you,’” Mr. James explained. “‘Look and see what the product is; advise us on what we should do; here’s the deadline for the proposal, and may the best person win.’”

By the end of last week, brokers sent in their proposals for how they would market the place, how much they would list it for (their pitch can’t be too discouragingly low nor too misleadingly high) and what kind of commission they’d demand (which, as Mr. Burger’s offer showed, will probably be modest).

One of the agents there guessed that the penthouse is worth $8 million, but will sell for less because of its ignominy—and its condition, which, despite Mr. Madoff’s reputation for punctiliousness, is imperfect. “So not triple-mint,” an agent said. “That to me was incredibly surprising.”

“I thought it was eerie,” another said. “The place was left as if someone got out in the middle of the night. All the clothes were there, there was a note, there was a cup of coffee on, I think, his desk. The only that was gone were the photos: the picture frames had no pictures.”

mabelson@observer.com

Steve Cuozzo reports that Larry Silverstein is not buying the Governor’s plan for retail at Ground Zero.

In the Daily News, Councilmember Yassky rides herd on the Mayor for forgetting about Newtown Creek now that the Olympics aren’t coming.

The federal labor board has found a way of solving New York’s rodent infestation problem: get rid of the union rat.

Finally, Tom Tomorrow explains New York’s emergency evacuation plan to you.

The media-savvy founder of The Corcoran Group, who already pops up on the small screen regularly discussing the real estate world, is planning on making television her full-time job.

In the past few years, while still assuming a public role, Ms. Corcoran's daily responsibilities in the company have been reduced. Pamela Liebman serves are President and CEO, while the founder assumed the role as chairman in 2001. Her resignation is effective November 15, 2005.

-Michael Calderone

So when the board at 927 Fifth Avenue told him that he couldn't buy Mary Tyler Moore's 5,740-square-foot prewar co-op on the eighth floor, even with $18.5 million in hand, it must have smarted.

Soon insult was added to injury, when the board of Central Park West's San Remo co-op board told Mr. Blavatnik that he couldn't buy and combine three units into a massive aerie overlooking the park.

It's just one way the real-estate market in Manhattan is different from the rest of the country. Elsewhere, who would turn away an investor with money to burn?

These days, though, the real-estate talk in Manhattan is the same as everywhere else: It's all about the Real-Estate Bubble.

The chatter reached a summit when, on May 25, The New York Times ran a front-page news story about the bubble, followed two days later by Op-Ed columnist Paul Krugman's gloomy economic forecast. The Princeton professor jumped right into the current real-estate fray, the "final, feverish stages of a speculative bubble."

As in many other "bubble" articles, Mr. Krugman focused primarily on nationwide housing statistics.

But what plays in Peoria, Miami or Syracuse may not play here. And when it comes to watching real estate, there are only three factors to consider: location, location and location.

That, at any rate, is the story the Manhattan real-estate world is eager to tell.

They say the tendency of co-op boards-a major force in the Manhattan market as nowhere else in the country-to weed out speculative investors is a major factor. So, too, are the city's low crime rate; steady increases in population and immigration; and mounting construction costs. These factors, they say-and not the kind of speculative distance from real value-are what have been driving Manhattan's real-estate values to dizzying heights. And while it won't last forever, neither, they say, will it come crashing down on our heads like it did in the late 1980's.

The Co-op Board

One study, conducted in September 2004 by Business 360, an economic-research firm regularly hired to issue assessments for corporations and investors, confirmed something New Yorkers have long believed: that Manhattan real estate operates on a fundamentally different economy from the industry in the rest of the country.

Training its focus on Manhattan, the study found that over 80 percent of co-ops in the United States are located in New York; what's more, co-op apartments make up about 80 percent of New York's residential real-estate market.

"One thing that makes the New York market different is co-op boards," said Frederick Peters, president of Warburg Realty Partnership. "There's built-in protection in the co-op market against the kind of panic selling which is one of the byproducts of a bursting bubble."

Co-op boards don't like financial "adventurers"; prospective buyers' long-term financial security is as important as their bank balance at the time of purchase.

And the boards like it even less when investors come in to rent out or "flip" apartments-meaning they have no plans to occupy the place themselves, only to turn around and resell the place at a higher price than they paid themselves.

"The situation in New York is different in the sense that we don't have the rampant speculation, the property-flipping," said Jonathan Miller, president and chief executive of Miller Samuel, a real-estate appraisal and consulting firm. "It pales in comparison to what is going on nationally."

Unlike in other hot markets, New Yorkers are primarily buying property for personal ownership rather than to turn a quick profit.

In the heavily investor-driven South Florida market, which has been a major focus of recent coverage, Mr. Miller believes that roughly 60 to 70 percent of sales are speculative purchases.

"I know Miami is a highly speculative market," said Pamela Liebman, president and C.E.O. of the Corcoran Group. "This is not Miami. This is people who want to be here. It's not a flipper mentality in New York."

Indeed, in Manhattan, investors represent less than a quarter of apartment buyers, and most homeowners will ride the ebbs and flows of the market from the safety of their living room.

"People feel secure; they're willing to invest their money," said Michele Kleier, president of Gumley Haft Kleier. "You're buying something that, worse comes to worst, you're going to live in."

The activism of New York's co-op boards is one reason the Manhattan real-estate market seems to correlate so poorly to the stock market.

"[T]here has always been a propensity to correlate the housing market to the stock market, and they're fundamentally different," said Mr. Miller.

For one thing, real-estate transactions take significantly longer than stock transactions. Co-op boards present difficulties regardless of capital that no stockbroker would present. And devalued stocks cannot provide a roof and four walls in the event of an economic downturn.

"Real estate has intrinsic value," said Mr. Peters. "Unlike tech stocks, there is always a there there."

But the more speculative the purchases-the greater the proportion of investing in real estate to actual home buying-the more the resemblance holds up.

"Up until 2000, it was the conventional wisdom that real estate followed the market," said Mr. Peters. "Real estate really is functioning as a separate asset class which doesn't parallel the stock market."

In the past few years, many records have been shattered, especially in the high-end market, with Rupert Murdoch's $44 million purchase of Laurance Rockefeller's penthouse triplex at 834 Fifth Avenue being just the latest example.

But high demand-as long as it's coupled with a limited inventory- can create a hot market without inflating a bubble.

Indeed, one of the downsides of this booming market has been the response time granted to potential buyers, who are forced into bidding over the asking prices, in many instances without time for careful consideration. There is some speculation that this could lead to an increase in shoot-from-the-hip stock-market-style speculation in real estate.

"In a normal market, it takes four to five months to sell an apartment in New York City," said Jacky Teplitzky, executive vice president at Prudential Douglas Elliman. "In the first quarter, it used to take 24 hours. Or 48 hours."

"It's not just buying a few shares in G.E.-for the vast majority of us, it's the most significant investment you are going to make in a lifetime. Now more than ever, in this turbo-charged market, people believe they have to bid instantly," said Sylvia Shapiro, author of The New York Co-op Bible.

But even then, the feverish sell-offs that characterize a stock-market crash seem unlikely.

"It's an asset that takes, at a minimum, 60 to 90 days to trade," Ms. Liebman said. "The cycle of selling it doesn't lend itself even to be spoken of as a bubble. You don't have thousands of houses crowding the market because, one night, someone said the market crashed."

I Am an Island

Full-scale housing busts have occurred here before. But the bust of the late 1980's happened under very different circumstances.

That crash was catalyzed by excessive condominium conversions during the Koch years. When the stock market dropped by a quarter (over 500 points) in October 1987, the supply of condominiums far outweighed the demand.

In today's market, however, there is still a constrained supply.

"One of the factors that stimulates the market is supply and demand," said Daniel Douglas of the Corcoran Group. "Nobody told me about Manhattan getting enlarged. It's a limited landmass. There's a limit to the amount of things you can do."

Donald Trump's theory is a bit different.

"That was driven by tax deductions," he said of the 80's real-estate bubble. "This is driven by a market which is much safer. The late 80's was driven by tax deals, and when they ended the tax deals rather abruptly, the market came to a screeching halt. The government actually made a big mistake, because it took down a lot of banks-a lot of people went down the tubes."

But he agrees with everyone else on at least one important factor that separates Manhattan from the rest of the nation: water.

"It's a small little island surrounded by water," he said. "Anything on this island is going to become more and more valuable over time. In other places, you have stretches of land that go thousands of miles. Here, you have just a very small little island."

Unlike the housing market in Omaha, Neb., expansion must be vertical rather than horizontal. There are some areas slated for redevelopment-former factories becoming shabby-chic artists' lofts-but Manhattan doesn't offer developers miles of untapped land to build a few thousand McMansions.

"I think New York is a very unique marketplace," said Ms. Liebman. "We like to think of it as the capital of the world. It is an island. And it does not suffer from overdevelopment. We feel the demand in Manhattan is very strong and is still far outweighing the supply, which is causing the market to have a 23 percent increase in prices this year. Our company has had a record-setting sales month in March, April and now in May. All this talk of the bubble is purely fueled by the press."

But how long can the party really last? Will inventory always be in such short supply in Manhattan?

Some point to the fact that, last year, 25,208 new residential units were approved for construction granted-the most in over 30 years. Just 10 years earlier, only 4,010 were permitted. This is one area where there could be a substantial glut of new residences in the next few years, with the downtown condominium market viewed by some in the industry as a place to watch closely.

"There might be some concern down the road just because [downtown] has been the focus of development over the last five years," said Mr. Miller.

Indeed, most industry insiders agree that boutique condos, costing upwards of $2 million to $3 million, could be in jeopardy if supply begins to outweigh demand.

Recently, there has been property flipping in several new luxury-condominium developments (where savvy investors purchased sponsor units from floor plans), but that marks the exception rather than the rule.

"Because there is less financial scrutiny, [condo] buyers may have financial issues down the line," said Ms. Shapiro. "Co-ops are definitely better-protected than condos."

Slowdown Imminent

"There is no bubble! What has happened is, the incredible price escalation is a result of property being tremendously undervalued for a long period of time," said Leonard Steinberg of Prudential Douglas Elliman, a luxury property broker.

O.K., that might sound a bit crazy. But the Business 360 study concluded that the price of housing-still recovering from the early 1990's decline-is indeed undervalued. The authors of the report predict that prices will rise about 10 percent per year through 2007, followed by a 5 to 8 percent annual gain through 2010.

There's no question about it: That's a slow-down.

"The experience we are currently having is a decrease in the rate of increase. The reason that leads to price reductions [is that] sellers invariably price ahead of the marketplace," said Mr. Peters.

While brokers may have obvious reasons to dismiss the rumors of an impending housing bust, many are willing to admit that the market has slowed down, which is admittedly not such a bad thing. Continuous double-digit gains, quarter after quarter, are a strong indicator that prices are inflated, and the market could then drop significantly. And although the percentage gain may drop a few points, it must be noted that there is still a net gain: Prices may rise, albeit not as quickly as in the previous quarter.

Another broker agrees that a slight slowdown isn't the end of the world and should be expected in any market-but that, in such a case, properties would not be losing any value, only increasing in value at a slower rate.

"The market has slowed down, but what said has it slowed down from?" said Mr. Steinberg. "Has it slowed from a Ferrari to a Mercedes? Yes. It's still going pretty quickly, it's still going pretty actively, but it cannot be at full-throttle acceleration forever."

The acquisition is just the latest investment Corcoran has made in expanding its ever-growing reach. In October 2003, Corcoran gained two formidable brokerages in lucrative second-home markets when it acquired 50-year-old Hamptons powerhouse Cook Pony Farm Real Estate, including the firm's 10 offices and 160 agents on both forks of eastern Long Island, as well as Palm Beach, Fla.–based Paulette Koch Real Estate, a firm with 30 agents that has become a favorite destination for the Manhattan flotsam migrating south on the JetBlue jitney. In 2003, all three branches of the combined company totaled $6.5 billion in closed sales volume.

The acquisition of Citi Habits now signals Corcoran's efforts to corner the fast-paced rental market that draws thousands of anxious New Yorkers each year to furiously click on Craiglist.org and other rental listings, hoping to find a place to bunk. Citi Habitats' vast rental data base has become one of the company's strategic assets.

"We've never had a strong rental presence. And this acquisition cements our position as No. 1," said Pamela Liebman, Corcoran's president and chief executive. "We want customers for life. Now we can rent our customers an apartment through the time they're ready to find a bigger apartment and buy. We can find them a winter property in Palm Beach, or a summer house in the Hamptons. This is a great compliment."

The deal was consummated several months ago over breakfast at the Regency Hotel, when Ms. Liebman met with Andrew Heiberger, the president, founder and C.E.O. of Citi Habitats, who will now serve as president of the Citi Habitats division of the Corcoran Group, to discuss a possible deal.

In an industry that continues to see the major players grow, Corcoran's move ratchets up the jockeying with their biggest competitor, Prudential-backed Douglas Elliman.

"The rental market is an arm that Corcoran really needed. But I don't react to what they're doing; I focus on my own model," said Douglas Elliman chief executive Dottie Herman. "I do deals that are strategic to my company. I don't do things just to get bigger."

According to Corcoran and N.R.T. executives, consolidation in the New York brokerage market is far from complete.

"We have distanced ourselves from the pack in many ways. For us, customer service gets better rather than suffers as we get bigger," Ms. Liebman said. "People will point to us and say we've gotten too big. That's not the case. We know how to be big."

Smarty Jones may have been eclipsed by Birdstone at the Belmont Stakes in his bid to nab the famed Triple Crown, but the apartment belonging to the estate of Kay Jeffords, the late owner of the racing steed Lonesome Glory, just found a winner.

After a recent board turn-down in May, the six-bedroom apartment at the exclusive 4 East 66th Street-the tony co-op that over the years has been home to British Consul General Sir Thomas Harris, Microsoft co-founder Paul Allen, Sid and Mercedes Bass, Ace Greenberg and Veronica Hearst-landed back on the market. It didn't stay there long.

The 16-room spread just went to contract, again. The apartment carried a $16 million asking price with exclusive broker Cornelia Zagat Eland, of Stribling and Associates, who didn't return calls for comment. Back in February, on its first spin through the sales cycle, the spread went to contract for around $12.5 million, when it carried a $14 million price tag. With the bullish sales market, the Jeffords estate raised the asking price in the intervening months up to $16 million.

The apartment, on the corner of Fifth Avenue and 66th Street, had been the former home to the renowned diplomat and financier Bernard Baruch before becoming the residence of Jeffords-owner of the star-chaser Lonesome Glory-who passed away at 80 last July. Jeffords' extensive collection of horse tchotchkes and memorabilia adorned the apartment's wood-paneled walls and added to the spread's refined décor. The co-op also had a 22-foot formal dining room, a reception room, five wood-burning fireplaces and two elevators.

Now, only time will tell if the new owners make it past the co-op board's discerning eye.

"Consolidation is a continuing trend. It has happened in the rest of the country, and it's finally happening here in Manhattan," said Alan Rogers, the chairman of Douglas Elliman, which is backed by the $26 billion Prudential Company. "We're ending with two very large firms. The middle-sized firms are getting squeezed out."

But not without a fight.

Peter Marra, the president of William B. May, a storied Upper East Side company founded in 1866 that has sold properties to the Vanderbilts, Carnegies and Fricks, has come under increasing pressure in recent years to sell his 150-broker company.

"Every day, we get calls to be bought," Mr. Marra said. "The trend is clear-there are a lot less of us [independent companies], for sure. The bigger firms and the conglomerates preach that bigger is better and that they will put the rest of us out of business. I'm betting that is not going to happen. Just because you have 1,000 brokers doesn't mean you are providing a quality business relationship. When you expand to the levels that these firms have, quality has to suffer."

It's an old New York story made new again. With the Dow at a 19-month high and the economy growing at a torrid annual rate of 8.2 percent, 2003 saw a record $45 million penthouse sale at the new Time Warner Center that sent shock waves through Manhattan's luxury residential real-estate market in July, signaling that the Sept. 11 downturn may finally have ended.

From Barnes and Noble and Crate and Barrel to Wal-Mart and Starbucks, the thrust of corporate brands into almost every nook of the national economy has migrated to Manhattan real estate, once a posh enclave of old society brokers who traded listings over lunches at the Knickerbocker Club.

But the realities of today's market has shifted to favor the efficiencies of big business. The consolidation among Manhattan's residential brokerages has brought corporate tactics to a residential real-estate market that, until now, conducted so much of its high-end business in cozy, personal dealings and over modish lunches, where knowing the right broker eased the way past notoriously cagey co-op boards and owning an exclusive slice of Manhattan real estate meant more about the names on the deal, not the high-technology Web sites that national firms use to market luxury properties to prospective buyers around the world.

Indeed, many of the largest deals closed in 2003 were handled by Manhattan's largest real-estate concerns, Elliman and Corcoran. Robbie Browne, a broker with the Corcoran Group, closed on the storied $45 million Time Warner penthouse, and fellow Corcoran broker Deborah Grubman sold former Sony Records chief Tommy Mottola's East 64th Street spread for more than $13 million.

At Douglas Elliman, Dolly Lenz recently unloaded former ImClone chief Sam Waksal's 5,000-square-foot Soho loft for nearly $7 million. And in the months following the Sept. 11 attacks, broker Tristan Harper scored a high-ticket sale for $18.2 million at 515 Park Avenue, when his client bought the apartment that had formerly been owned by New Jersey Senator Jon Corzine, before he sold it for $18 million to record executive Alan Meltzer, the chief executive of Wind-Up Entertainment. At the time, the sale was the highest price paid for an apartment in the months following the Sept. 11 attacks.

Rolling In It

Both Corcoran, a division of N.R.T., and Prudential-backed Elliman posted record revenues in 2003. Corcoran will take in approximately $5 billion in revenue in 2003, according to the firm's chief executive, Pamela Liebman. The firm, founded by Barbara Corcoran in 1973 with an initial investment of $1,000, now has 810 New York brokers, an increase of 122 this year, and recently acquired 10,000 square feet at its 660 Madison Avenue headquarters, along with 2,500 square feet on the Upper West Side at 2112 Broadway, to expand its physical plant.

Ms. Liebman said the consolidation in Manhattan's residential brokerages is far from over. "It wouldn't be out of the question in the next several years to see a lot more consolidation," she said.

Matching Corcoran's moves to shore up market share, Douglas Elliman, the largest firm in Manhattan, now has 1,000 New York brokers-an increase of 200 in the past year-and the firm plans to record more than $6 billion in sales this year. In early December, Douglas Elliman signed for more than 60,000 square feet at 575 Madison Avenue, which doubled the firm's office space in the building that has been its headquarters for 30 years. Since Dottie Herman and her partner, real-estate financier Howard Lorber, bought Douglas Elliman last March for close to $72 million, it has grown from 800 New York brokers to 1,000. Related suburban and summer markets are helping: The company has more than 2,000 brokers when you include the Prudential Long Island branches now in the company's control.

And in today's national-and global-economy, a rash of buyers are entering the Manhattan market from across the country and around the world who are wholly unfamiliar with the network of old-line brokerages, firms such as Alice F. Mason and Edward L. Cave, and are instead moving towards the large, highly visible brands of Corcoran and Elliman.

"We have buyers coming from all over the country to buy in Manhattan, and we have access to brokers all over the country," said Bob Becker, the president and chief executive of N.R.T, Corcoran's parent company, a national giant with 53,800 agents and 956 offices. "The success of Corcoran is evidence of the fact that a large corporation can help these buyers. We look to acquire companies, hire more people and make them more effective." N.R.T's staff has grown by 300 percent under Mr. Becker's aggressive management and acquisition strategy.

Today, the New York market has been upended by the presence of the Parsippany, N.J.–based N.R.T, a subsidiary of the publicly traded Cendant Corporation that had $149 billion in closed sales in 2002. N.R.T. has used its operation of the Corcoran Group to boost market share in Manhattan's lucrative residential real-estate market, where the average price of a two-bedroom apartment topped $1 million for the first time in history, according to an independent report issued by Miller Samuel Inc. in October. "I think if the trend towards consolidation continues, it becomes more difficult for the smaller brokerages to compete," said Jonathan Miller, the president of Miller Samuel.

To the principals of Manhattan's top brokerages, their large size and leverage in the market are better tools to serve demanding Manhattan buyers. According to Ms. Liebman, Corcoran's Web site-launched in 1995-has been a major advantage for the firm in marketing apartments and increasing sales. The site now receives more than one million visitors a month.

"We do more business through the Web site than through print advertising. A smaller boutique firm just can't offer as many listings," Ms. Liebman said.

In this competitive climate, Corcoran and Elliman have been shadowing each other's actions. In 2002, Douglas Elliman became part of Long Island–based Prudential, and the combined firm now totals more than 2,000 agents across 50 offices in Manhattan and Long Island. To keep pace, in October the N.R.T.-backed Corcoran acquired 50-year-old Hamptons powerhouse Cook Pony Farm Real Estate, including the firm's 10 offices and 160 agents on both forks of eastern Long Island, as well as Palm Beach, Fla.–based Paulette Koch Real Estate, a firm with 30 agents in the lucrative South Florida luxury-home market.

The spate of consolidation has put continued pressure on mid-sized Manhattan brokerages, who don't have the marketing leverage and economies of scale that nationally funded Corcoran and Elliman wield in Manhattan's fast-changing marketplace. Many industry experts say that well-respected mid-sized firms with luxury-market pedigrees-companies such as Warburg Realty, Stribling and William B. May-face the biggest challenge in this new centralized market.

"In an age when it's hard to make a buck in this business, aggregation is the only way to survive," said Paul Purcell, the former president of Douglas Elliman who is now the chief executive of Braddock and Purcell, a real-estate consulting firm. "If you can dominate a region, you can be competitive. You need a large presence in this new climate to lock up market share. I think small boutique firms will remain, but mid-sized firms are the ones who will go."

But to the mid-sized brokers from firms like Warburg, William B. May and Fox Realty, the corporate titans in Manhattan's real-estate market seem undignified, as the city increasingly loses customer services they say only small firms can offer.

"New York is having the same experience in consolidation that has clearly been going on all over the country for some time," said Fred Peters, the president of Warburg Realty, a mid-sized company with 85 brokers. "But being a smaller firm gives me another point of differentiation between myself and these enormous multi-company firms. Access to people is easier at a company like Warburg. And while many people have approached me and said, 'Don't you see the handwriting on the wall?', the handwriting on the wall reads differently to me."

"I can stay involved in every deal we do," said Barbara Fox, the president and owner of Fox Realty. "Not only does a buyer or seller have their own broker at our firm, but it's a virtual impossibility with these mega-big firms to receive that kind of supervision." Ms. Fox said that her company routinely gets offers to be acquired, but that she's hesitant to sell and has instead formed referral agreements with brokerages in the Hamptons and other popular second-home markets to help boost her exposure among luxury buyers. She said her firm has doubled revenue since 2002, adding six additional brokers and recently expanding to 2,500 square feet of office space at 1015 Madison Avenue.

When the Price Is Right

Commitment to service aside, small and mid-sized brokerages are still in the business to make money. And as the market moves toward large brokerages that are becoming richer and more concentrated through consolidating market share, the buyout offers will become harder to resist.

"This company is my baby," Ms. Fox said. "But I'm sure if the right situation would present itself, I would think about selling. You would be crazy not to."

Hunt Kennedy, a former independent mid-sized firm founded in 1988, realized that the only way to survive in this current climate of consolidation was to find a corporate backer. In 1996, the firm had only $52 million in annual sales and 26 brokers-but after merging with Coldwell Banker that year, the combined company, Coldwell Banker Hunt Kennedy, expanded rapidly and now has 260 brokers and $1 billion in annual sales. In August, the firm acquired Charles Greenthal, an independent Manhattan firm.

"They were in a crunch and needed a growth plan. They were a classic midsize firm, and it was a good fit," said JoAnne Kennedy, the president of Coldwell Banker Hunt Kennedy. Her firm's aggressive expansion strategy and alignment with a national parent company helped the company shore up its position in the market.

But while the corporate parents of Corcoran and Elliman seek out their next acquisitions, the two firms now face the prospect of a market in which, as the two largest players, they have to compete with each other for exclusive listings-and talent. In November, Douglas Elliman hired former Corcoran vice president Jacky Teplitzky, a Top 25 broker at the firm who led a staff with more than $50 million in sales last year. The move signaled the increasing competition between Manhattan's residential real-estate behemoths that has peaked in the past six months, as the two firms battle for market share and primacy of the country's most competitive real-estate markets. Industry experts say that top brokers have been offered signing bonuses to switch companies, taking their extensive client roster with them. In an industry that still prides itself on its refinement, luxury real-estate brokerages generally deny that signing bonuses are a part of their recruitment strategy. But representatives of smaller brokerages claimed that such deals are common.

"My brokers are always being recruited. It's no secret that these firms are out there recruiting," Mr. Marra of William B. May said. "There will constantly be a fight and struggle for the top people. It's like baseball-this is a free agency now. There is a bidding war for people they perceive as high-profile brokers. It's unfortunate, but that's the way this business works."

Tresa Hall, an executive vice president at Corcoran who oversees recruiting, denied the claims by the smaller firms. "We absolutely, unequivocally, do not pay signing bonuses."

Karen Duncan, Elliman's executive vice president and director of sales, said her firm doesn't offer signing bonuses to entice brokers to join. "Douglas Elliman is not paying signing bonuses for brokers joining our firm. We don't have to. It's an easy way for other firms where people are leaving to justify why they are leaving, to say they are getting signing bonuses from Douglas Elliman or other firms, for that matter."

Ms. Liebman doesn't view growth in the largest firms as leading to direct competition. "We never look at what anyone else is doing. There will always be competitors in the marketplace," she said. "There are people out there who like to think of this big rivalry between Corcoran and Douglas Elliman, but it's only because we're the two largest firms."

Dottie Herman, the CEO of Douglas Elliman, said she saw the consolidation trend in the mid-1990's and has pursued a business strategy without regard to her rivals, including Corcoran. "I concentrate on running my company and doing the best job I can," Ms. Herman said. "Everyone has tried to make it a rivalry between Corcoran and me. There will always be a Corcoran, and there will always be a me. I'm just focused on making this company better than ever."

But industry experts see the national consolidation trend forever remaking the Manhattan real-estate landscape in 2004.

"Will the competition continue?" Warburg's Mr. Peters said. "Short of swallowing each other, there is nothing these two firms can do." Instead, he takes a long and unsentimental view.

"We're still a competition-oriented society," Mr. Peters said. "And that is probably good."