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REBNY Honors Warburg Realty's Frederick W. Peters at 114th Annual Banquet Posted By Susan Piperato, 01/22/10 NEW YORK, NY—Frederick W. Peters, President of Warburg Realty Partnership, was honored by…... Read more >

REBNY Honors Warburg Realty's Frederick W. Peters at 114th Annual Banquet

Posted By Susan Piperato, 01/22/10

NEW YORK, NY—Frederick W. Peters, President of Warburg Realty Partnership, was honored by the Real Estate Board of New York (REBNY) at the organization’s 114th Annual Banquet on January 21, 2010 at the New York Hilton. Peters received The Kenneth R. Gerrety Humanitarian Award, to recognize meritorious service to the community by a REBNY member.

Peters and his family have a long history of service in the New York community, and beyond. Frederick Warburg Peters is President of Warburg Realty Partnership, one of the oldest and most respected luxury residential brokerage firms in Manhattan. A graduate of Yale College with a Masters and extensive pre-doctoral work in music, Peters entered the real estate business as a residential agent in 1980. After working as a Manager at Albert B. Ashforth for a number of years in the late 80s, he acquired and renamed the 95-year-old firm in 1991.

During the past 15 years, Peters has expanded the company from 60 to 150 brokers and from one to three locations. Peters maintains a reputation as one of the most-quoted experts in the Manhattan residential real estate industry, whose dedication to the industry includes his involvement in The Real Estate Board of New York's Board of Directors - Residential Division, and as a member of the Executive Committee of REBNY's Board of Governors. This year, he was appointed Vice President, Residential Brokerage Division for REBNY’s 2010 Executive Committee. In 1996, he was the recipient of REBNY’s Henry Forster Award, a lifetime achievement and contribution-to-the-industry award.

Peters and his wife Alexandra have supported many diverse organizations, but the primary focus of their philanthropy has been humanitarian aid and music. During the 1980s and 1990s, when their own children were younger, several times a year they hosted children whose mothers were incarcerated at the Bedford Hills maximum security women's prison to ensure the children could spend time each day with their mothers. Later, their support of the humanitarian relief efforts of the International Rescue Committee, led them to open their home to Burmese refugees, some of whom today remain personal friends. Since 1980, Peters has served on the Board of the Caravan Institute, a small nonprofit organization dedicated to Italian language and the promotion of culture; he is now the Executive Secretary and Treasurer.
 
Between 1983 and 1989 he served on the Board of the Opera Ensemble of New York, a small opera company dedicated to the production of new American work. For the last four of those years he was Chairman. From 1991 until 2007 he served on the Board of the Glimmerglass Opera, the highly regarded company in Cooperstown, New York. He participated actively on two committees, Music Policy and Nominating, the latter as chair. Finally, and dearest to his heart, he has since 1993 been Board Chair of Meet the Composer, the largest composer and new music advocacy organization in the country. In this capacity he has been an ambassador for the organization at events around the country, worked with funders, and supported composers and recordings.

The Kenneth R. Gerrety Humanitarian Award celebrates the memory of Kenneth Gerrety who served with distinction as REBNY’s executive vice president for many years and gave valuable community service to his hometown of Garden City, NY.

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LAST NIGHT AT REBNY… There was no bitter cold, no biting wind, and no planes steering into the Hudson yesterday. We only hope this portends a better year for the real estate industry, which was all…... Read more >

LAST NIGHT AT REBNY…

There was no bitter cold, no biting wind, and no planes steering into the Hudson yesterday. We only hope this portends a better year for the real estate industry, which was all about survival in ’09. What we heard from many of the 2,000 attendees at REBNY’s 114th annual banquet last night were glimmers of hope in an uncertain market.
 
The packed—and quite noisy—Grand Ballroom. Last night’s honorees were Kramer Levin’s Sandy Lindenbaum (The Harry B. Helmsley Distinguished New Yorker Award); Vornado’s David Greenbaum (The Bernard H. Mendik Lifetime Leadership in Real Estate Award); Massey Knakal’s Bob Knakal (The Louis Smadbeck Broker Recognition Award); Paramount Group’s Ralph DiRuggiero (The George M. Brooker Management Executive of the Year Award); Warburg Realty Partnership’s Frederick Peters (The Kenneth R. Gerrety Humanitarian Award); and Swig Equities’ Todd Korren (The Young Real Estate Man of the Year Award).
 

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Fred Peters on bisnow.com We also met with Warburg Realty Partnership president Frederick Peters, who's receiving the Kenneth R. Gerrety Humanitarian Award. Did you know that before real estate, Fred…... Read more >

Fred Peters on bisnow.com

We also met with Warburg Realty Partnership president Frederick Peters, who's receiving the Kenneth R. Gerrety Humanitarian Award. Did you know that before real estate, Fred was a composer going for his doctorate in music composition? He’s been promoting the creation of new music for the past three decades and chairs Meet The Composer, an advocacy organization that creates opportunities and residencies for composers. On the real estate side, Warburg’s been focusing on next gen marketing, using social networking and blogs versus print advertising—tools that have been effectively increasing traffic for the firm, he says.
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Real Estate Weekly Would-be baseball stars, composers and star-crossed lovers ... People in the real estate industry are aware of the challenging deals under their belts, they know which boards they serve…... Read more >

Real Estate Weekly

Would-be baseball stars, composers and star-crossed lovers ...

People in the real estate industry are aware of the challenging deals under their belts, they know which boards they serve on, which charities they support, but Real Estate Weekly is pleased to offer the following little known anecdotes about the 2010 REBNY honorees.

For example, did you know the real estate industry has its own Andy Pettitte? From the pitcher’s mound to the sales pitches, Massey Knakal Realty Services chairman Bob Knakal nearly had a career in the major leagues. A coveted baseball player at Hackensack High School, in New Jersey, he received an invitation to try out for both the Philadelphia Phillies and Cincinnati Reds. Knakal ultimately landed in college, where he became an All-Ivy League pitcher at the University of Pennsylvania. Despite the institution’s storied baseball history – which dates back to 1867 – Knakal continues to hold the fourth best ranking on Penn’s all-time low ERA list. Knakal is receiving REBNY’s Louis Smadbeck Broker Recognition Award.

And while Knakal was impressing scouts on the pitcher’s mound, Warburg Realty’s Frederick Peters hit his own high notes with dreams of a career in music composition.

With his training as a composer, Peters was pursuing a PhD in music when he became a real estate agent in 1980. In his 20s with one child (and a second on the way) he entered the business to make some extra money on the side. But real estate consumed his life and though just shy of a dissertation, Peters put the doctoral program aside and, as he puts it, “unsuspectingly morphed from artist to business person.” Peters is receiving REBNY’s Kenneth R. Gerrety Humanitarian Award.

For honoree Ralph J. DiRuggiero, vice president of property management at Paramount Group, one might call him a bit of a historian. An avid reader, he immerses himself in historical fiction and history literature spanning New York City and San Francisco.

Other little known facts about DiRuggiero? His a California wine aficionado; he spends a great deal of time raising scholarship funds for his alma mater, the University of Scranton; and his favorite getaway with wife Susan and daughter Caitlin is the beaches of Deleware. He’s receiving REBNY’s George M. Brooker Management Executive of the Year Award.

And speaking of wives …
Kramer Levin Naftalis & Frankel counsel Samuel H. Lindenbaum – who will receive REBNY’s Harry B. Helmsley Distinguished New Yorker Award – has an interesting tale about how he met his. As a 17 year old counselor at a co-ed camp, Lindenbaum’s bunk was positioned next to the infirmary office. One day, another counselor asked him to call a doctor on the microphone because a girl had been hit in the head with a baseball. Letting curiosity get the best of him, he walked over to the bunk and there lay a “cute little blonde chick” in his bed. Said Lindenbaum, “So when people ask me how I met my wife of 52 years, Linda, I say: ‘she was in my bed.’

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GlobeStreet.com The Real Estate Board of New York, which will honor six of the industry’s leading figures at its annual banquet Thursday evening, has named three new members to its commercial board…... Read more >

GlobeStreet.com

The Real Estate Board of New York, which will honor six of the industry’s leading figures at its annual banquet Thursday evening, has named three new members to its commercial board of directors, which oversees the commercial brokerage division for REBNY. In separate elections, REBNY also appointed three new members to the commercial board.

The new board members include: Nicola M. Heryet, senior managing director with Colliers ABR, now part of Cassidy Turley; Augustus B. Field IV, EVP at Cushman & Wakefield; and Simon Ziff, president of Ackman-Ziff Real Estate Group. William Montana, senior managing director at Studley, is remaining as the chairman of the commercial board. Robert A. Nager, executive managing director for Murray Hill Properties’ retail leasing division, will similarly begin his second year as the vice chairman of the commercial board.

"Each of our new appointees will bring invaluable experience and knowledge, and we are pleased to have them join us on the board," says REBNY president Steven Spinola in a release. He adds that Montana and Nager have been "valuable assets" in their leadership capacities on the commercial board of last year.

On REBNY’s residential board of directors, new members include: Rebecca M. Mason, executive director of Caran Properties, Jeffrey Weisbord, principal of Jeffrey Weisbord Real Estate; and Hall Willkie, president of Brown Harris Stevens. Tresa Hall, EVP of the Corcoran Group, was elected member at large.

At its 114h annual banquet Thursday evening at the New York Hilton, REBNY will present David R. Greenbaum, president of Vornado Realty Trust’s New York office division, with its Bernard H. Mendik Lifetime Leadership in Real Estate Award. Other honorees include Samuel H. Lindenbaum, counsel at Kramer Levin Naftalis & Frankel LLP, who will receive the Harry B. Helmsley Distinguished New Yorker Award; Robert A. Knakal, chairman of Massey Knakal Realty Services and GlobeSt.com blogger, who will receive the Louis Smadbeck Broker Recognition Award; the Paramount Group’s Ralph K. DiRuggiero, recipient of the George M. Brooker Management Executive of the Year Award; Warburg Realty’s Frederick W. Peters, who will receive the Kenneth R. Gerrety Humanitarian Award of the Year Award; and this year’s Young Real Estate Man of the Year, Todd E. Korren of Swig Equities.

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New York Post January 21, 2010 THE KENNETH R. GERRETY HUMANITARIAN AWARD Frederick W. Peters, President, Warburg Realty Partnership Peters received his BA from Yale College and did a Masters and extensive…... Read more >

New York Post
January 21, 2010
THE KENNETH R. GERRETY HUMANITARIAN AWARD
Frederick W. Peters,
President, Warburg Realty Partnership

Peters received his BA from Yale College and did a Masters and extensive pre-doctoral work in music, leading to a job as a residential real estate agent in 1980. After working as a Manager at Albert B. Ashforth, he acquired and renamed the 95-year old firm in 1991. The company has since expanded from 60-150 agents in three locations.

He is on REBNY’s Board of Directors – Residential Division, and a member of the Executive Committee of REBNY’s Board of Governors. In 1996, he was the recipient of the Henry Forster Award.

Peters and his wife Alexandra have supported many diverse organizations, primarily humanitarian aid and music.

Since Peters joined the REBNY Residential Committee in 1987 he has worked with the Board to change and institutionalize almost every aspect of the way they do business. “Co-brokerage, representation transparency, settlement of disputes – all have been transformed by the Board and the relationships formed within it,” said Peters. “To put it simply, REBNY re-made the residential industry from a group of often hostile fiefdoms into a community.”

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REBNY HONORS WARBURG REALTY’S FREDERICK W. PETERS AT 114TH ANNUAL BANQUET  Frederick W. Peters, President of Warburg Realty Partnership, will be honored by the Real Estate Board of New York (REBNY)…... Read more >

REBNY HONORS WARBURG REALTY’S FREDERICK W. PETERS
AT 114TH ANNUAL BANQUET 

Frederick W. Peters, President of Warburg Realty Partnership, will be honored by the Real Estate Board of New York (REBNY) at the organization’s 114th Annual Banquet on January 21, 2010 at the New York Hilton. Mr. Peters will receive The Kenneth R. Gerrety Humanitarian Award, to recognize meritorious service to the community by a REBNY member.

Frederick and his family have a long history of service in the New York community, and beyond. A graduate of Yale College with a Masters and extensive pre-doctoral work in music, Frederick entered the real estate business as a residential agent in 1980. After working as a Manager at Albert B. Ashforth for a number of years in the late 80s, he acquired and renamed the 95-year old firm in 1991.

During the past fifteen years, Frederick has expanded the company from 60 to 150 brokers and from one to three locations. Frederick maintains a reputation as one of the most-quoted experts in the Manhattan residential real estate industry, whose dedication to the industry includes his involvement in The Real Estate Board of New York's Board of Directors - Residential Division, and as a member of the Executive Committee of REBNY's Board of Governors. This year, he was appointed Vice President, Residential Brokerage Division for REBNY’s 2010 Executive Committee.  In 1996, he was the recipient of REBNY’s Henry Forster Award, a lifetime achievement and contribution-to-the-industry award. 

Frederick and his wife Alexandra have supported many diverse organizations, but the primary focus of their philanthropy has been humanitarian aid and music. During the 1980s and 1990s, when their own children were younger, several times a year they hosted children whose mothers were incarcerated at the Bedford Hills maximum security women's prison to ensure the children could spend time each day with their mothers. Later, their support of the humanitarian relief efforts of the International Rescue Committee, led them to open their home to Burmese refugees, some of whom today remain personal friends. Since 1980, Frederick has served on the Board of the Caravan Institute, a small non-profit organization dedicated to Italian language and the promotion of culture; he is now the Executive Secretary and Treasurer.

Between 1983 and 1989 Frederick served on the Board of the Opera Ensemble of New York, a small opera company dedicated to the production of new American work. For the last four of those years he was Chairman. From 1991 until 2007 he served on the Board of the Glimmerglass Opera, the highly regarded company in Cooperstown, New York. He participated actively on two committees, Music Policy and Nominating, the latter as chair. Finally, and dearest to his heart, he has since 1993 been Board Chair of Meet the Composer, the largest composer and new music advocacy organization in the country. In this capacity he has been an ambassador for the organization at events around the country, worked with funders, and supported composers and recordings.

The Kenneth R. Gerrety Humanitarian Award celebrates the memory of Kenneth Gerrety who served with distinction as REBNY’s executive vice president for many years and gave valuable community service to his hometown of Garden City, New York.

 

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REBNY ANNOUNCES EXECUTIVE COMMITTEE CHANGES Frederick Peters of Warburg Realty becomes VP of Residential Brokerage Division Robert Knakal of Massey Knakal named VP for Commercial Brokerage Division NEW…... Read more >

REBNY ANNOUNCES EXECUTIVE COMMITTEE CHANGES

Frederick Peters of Warburg Realty becomes VP of
Residential Brokerage Division

Robert Knakal of Massey Knakal named VP for
Commercial Brokerage Division

NEW YORK, Jan. 6, 2010 – With the start of the New Year and with a new chairperson taking the helm, The Real Estate Board of New York (REBNY) recently announced changes to its 2010 Executive Committee.

Frederick W. Peters, president of Warburg Realty Partnership, has been named Vice President, Residential Brokerage Division. 

In addition, Robert A. Knakal, chairman of Massey Knakal Realty Services is now Vice President, Commercial Brokerage Division.

Other changes to the Executive Committee include the addition of David W. Levinson, chairman & CEO, L&L Holdings LLC, as a new Member at Large for 2010. Bruce A. Beal, Jr. executive vice president of Related Companies, is also a Member at Large for 2010.

Stephen Ross, CEO of Related Companies, who has served as REBNY Chairman since 2007, is now Chairperson Emeritus as Mary Ann Tighe, chief executive officer, New York Tri-State Region of CB Richard Ellis begins her tenure as REBNY Chairman this year.

“REBNY is pleased to have Fred Peters as the new vice president for the Residential Brokerage Division. Fred has been an active member of REBNY’s Board of Governors for many years, and is an influential member of the residential real estate community. In his new role as vice president, Fred will continue to be a vital part of REBNY’s governing body,” said Steven Spinola, REBNY president.

Mr. Spinola added, “I would like to congratulate Fred, as well as Bob Knakal, who we’re pleased to have as vice president for the Commercial Brokerage Division, and new Members at Large, David Levinson and Bruce Beal. Their counsel and industry expertise will be invaluable to the Executive Committee and will help lead the city’s real estate industry as we navigate these challenging times.”

Frederick Peters has served on REBNY’s Board of Governors since 1995. Robert Knakal has been a REBNY Governor since 2000. This is the first time each has been appointed to a title position on the Executive Committee.

“As we welcome our new chairman Mary Ann Tighe, we also bid farewell to Stephen Ross, who has played a major role in the creation and passage of many important federal programs that have been essential to the industry,” said Mr. Spinola. “He has worked with the City on efforts that will result in safer buildings and improved construction standards, among many other highlights of his tenure. We thank Steve Ross for his dedication and leadership over the last three years and we will continue to rely on his invaluable expertise as Chairperson Emeritus in the coming years.”

The Real Estate Board is made up of six divisions, each with its own Board of Directors: Commercial Brokerage Division, Residential Brokerage Division, Institutional Owners and Investors Division, Owners and Builders Division, Management Division, and Allied and Associate Division.  The Board of Governors, REBNY’s central governing body, is made up of representatives from each division.  The Executive Committee is composed of the officers of REBNY and other appointed Board of Governor members. Via its Executive Committee, the Board of Governors reviews recommendations regarding industry issues from REBNY's six divisions, Boards of Directors and standing committees and determines appropriate actions.

The Real Estate Board of New York is the city’s leading real estate trade association with more than 12,000 members. REBNY represents major commercial and residential property owners and builders, brokers and managers, banks, financial service companies, utilities, attorneys, architects, contractors and other individuals and institutions professionally interested in the City’s real estate.   REBNY is involved in crucial municipal matters including tax policy, city planning and zoning, rental conditions, land use policy, building codes and legislation.  In addition, REBNY publishes reports providing indicators of market prices for both the residential and commercial sectors.

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Last updated: January 6, 2010  12:36pm REBNY Adds Knakal, Peters to Exec Committee NEW YORK CITY—The Real Estate Board of New York is starting off the new year with several changes to its executive…... Read more >

Last updated: January 6, 2010  12:36pm

REBNY Adds Knakal, Peters to Exec Committee

NEW YORK CITY—The Real Estate Board of New York is starting off the new year with several changes to its executive committee. Frederick Peters, president of Warburg Realty Partnership, has been named VP of the residential brokerage division, while Robert Knakal, chairman of Massey Knakal Realty Services is now VP of the commercial brokerage division.

Additionally, David Levinson, chairman & CEO of L&L Holdings LLC, and EVP Bruce Beal of Related Cos. are members at large for this year. Related CEO Stephen Ross, who has served as REBNY chairman since 2007, is handing over the chairmanship to Mary Ann Tighe, CEO of the New York tri-state region at CB Richard Ellis. Ross assumes the title of chairperson emeritus at REBNY, according to a release.

Peters has served on REBNY’s board of governors since 1995, while Knakal has been a REBNY governor since 2000. The new appointments mark the first time either man has served on the association’s executive committee. In a release, Steven Spinola, president of REBNY, says the counsel and industry expertise of the new members “will be invaluable to the executive committee and will help lead the city’s real estate industry as we navigate these challenging times.”

REBNY is comprised of six divisions—commercial brokerage, residential brokerage, institutional owners and investors, owners and builders, management, and allied and associate—each with its own board of directors. The board of governors, REBNY’s central governing body, is made up of representatives from each division. The executive committee includes the officers of REBNY and other appointees from the board of governors.

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THE WALL STREET JOURNAL Peters, Knakal ascend at REBNY January 06, 2010 The Real Estate Board of New York announced today that Frederick Peters, the president of Warburg Realty, has been appointed to…... Read more >

THE WALL STREET JOURNAL

Peters, Knakal ascend at REBNY
January 06, 2010

The Real Estate Board of New York announced today that Frederick Peters, the president of Warburg Realty, has been appointed to the organization's executive committee as the vice president of the residential brokerage division. Meanwhile, Massey Knakal's Robert Knakal has been named vice president of the commercial brokerage division.

Peters has served on REBNY's Board of Governors since 1995 and Knakal since 2000, but this is the first time either of them has been appointed to a title position on the executive committee.

Other new members to the executive committee include David Levinson, the chairman and CEO of L&L Holding Company, and Bruce Beal, Jr., the executive vice president of Related Companies, who will serve as members at large for 2010.

The changes accompany the naming of new REBNY chairperson Mary Ann Tighe, the CEO of the New York Tri-State Region of CB Richard Ellis.

Stephen Ross, CEO of Related Companies, who had served as REBNY chairman since 2007, is now chairperson emeritus. TRD

 

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Peters, Knakal ascend at REBNY January 06, 2010 The Real Estate Board of New York announced today that Frederick Peters, the president of Warburg Realty, has been appointed to the organization's executive…... Read more >

Peters, Knakal ascend at REBNY
January 06, 2010

The Real Estate Board of New York announced today that Frederick Peters, the president of Warburg Realty, has been appointed to the organization's executive committee as the vice president of the residential brokerage division. Meanwhile, Massey Knakal's Robert Knakal has been named vice president of the commercial brokerage division.

Peters has served on REBNY's Board of Governors since 1995 and Knakal since 2000, but this is the first time either of them has been appointed to a title position on the executive committee.

Other new members to the executive committee include David Levinson, the chairman and CEO of L&L Holding Company, and Bruce Beal, Jr., the executive vice president of Related Companies, who will serve as members at large for 2010.

The changes accompany the naming of new REBNY chairperson Mary Ann Tighe, the CEO of the New York Tri-State Region of CB Richard Ellis.

Stephen Ross, CEO of Related Companies, who had served as REBNY chairman since 2007, is now chairperson emeritus. TRD

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Brokers Weekly Warburg has an eye on the future Warburg Realty Partnership, one of Manhattan’s oldest residential real estate companies, is proving its got its eye on the future with a new partnership…... Read more >

Brokers Weekly

Warburg has an eye on the future

Warburg Realty Partnership, one of Manhattan’s oldest residential real estate companies, is proving its got its eye on the future with a new partnership with the AroundMe iPhone application.

Warburg’s exclusive New York City listing information will be available to the over seven million global users who have downloaded the free AroundMe app.

“With today’s fast pace, technology enables us to multi-task in ways we never imagined,” said Frederick W. Peters, president of Warburg Realty. “As a firm, we strive to provide our customers with up-to-the-minute information and be a thought leader in the industry. The integration of Warburg into the AroundMe app allows us to provide real time real estate information through this widely used platform.”

AroundMe is one of Apple’s most frequently downloaded iPhone/iTouch apps. Utilizing GPS or WiFi, the app pinpoints the user’s location to find restaurants, coffee shops and popular neighborhood locales, wherever they are around the globe.

The Warburg integration allows AroundMe users to view live information about the firm’s nearby listings. Warburg’s listings, accessed through a list or map view, provide floor plans, photos, additional residence information and the agent’s contact information. Once a listing is selected, the user can retrieve the entire profile, and click through to Warburg’s web listing page.

AroundMe shows a complete list of all of the businesses in the category selected along with the distance from where the user is located. The selected listing is then displayed on a map and plots the route to the nearest address.

Fast, easy and accurate, AroundMe supports English, German, French, Italian, Swedish, Russian, Japanese and Portuguese languages.

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Wide, open Every once in a while a space comes up that gloriously defies the rules — like an open loft residence in a white-glove prewar co-op on the Upper East Side. You can buy this space as a 5,000-square-foot…... Read more >

Wide, open

Every once in a while a space comes up that gloriously defies the rules — like an open loft residence in a white-glove prewar co-op on the Upper East Side. You can buy this space as a 5,000-square-foot plain “white box” for $3.2 million or purchase it renovated for $5.9 million. The sellers of the sunny second-floor co-op at 180 E. 79th St. are child psychiatrist Harold Koplewicz and his wife, Linda Sirow, an artist and Dalton schoolteacher. Barbara Fox of Fox Residential Group and Frederick Peters of Warburg Realty have the listing.

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Among brokers, a resurgence of the old guard High-end pendulum swings back toward co-op deals and white-shoe brokers December 01, 2009 07:00AM By Candace Taylor Fascination with Manhattan high society…... Read more >

Among brokers, a resurgence of the old guard
High-end pendulum swings back toward co-op deals and white-shoe brokers December 01, 2009 07:00AM By Candace Taylor

Fascination with Manhattan high society has reached a fever pitch lately. The TV show "Gossip Girl" glamorizes the lives of pampered Upper East Side teenagers, complete with references to catered co-op board meetings and the Colony Club, while real-life New York socialites Amanda Hearst and Olivia Palermo are now feted as celebrities.

A similar phenomenon appears to be occurring in the world of Manhattan real estate. Suddenly, the priciest and most attention-grabbling listings in town are in the hands of well-heeled brokers like Southern belle Leighton Candler, Stribling's Kirk Henckels and the Clintons' broker Kathy Sloane, names heard less frequently during the boom years, as brash brokers like Dolly Lenz and Michael Shvo dominated the headlines.

But it's not just pop culture that's bringing about this shift.

Thanks to the real estate downturn, the current moment in New York City real estate is reminiscent of the days when a small, exclusive cabal of Upper East Side co-op brokers dominated the city's high-end market.

The Lehman Brothers crash largely halted sales of flashy new condos, while resales have continued to trade hands, albeit at lower prices. These days, many of the highest-priced sales are co-ops rather than condos, drawing attention to the small group of elite brokers who specialize in them.

"The loud, bling brokers of the condo era have been cut down a little bit, and the quiet, solid, I-didn't-make-my-money-in-the-last-five-minutes brokers have been enhanced by all of this," said Michael Gross, author of "740 Park: The Story of the World's Richest Apartment Building."

The importance of co-ops in the current market isn't just academic: The shift has palpable consequences for real estate agents trying to make a living in 2010.

Brokers accustomed to dealing in multimillion-dollar condos are finding that similarly priced co-op deals require considerably more skill, while the world of co-ops is less transparent and more dependent on social connections.

"Unless they went to school with someone who has an apartment on the market, or they're related to someone, or their parents live in a building where you're never usually given access, it's more difficult [to do deals] in the very fine buildings," said longtime broker A. Laurence Kaiser IV, the president of Park Avenue-based Key-Ventures Realty, who last month brokered the sale of a penthouse at 110 Central Park South for $10.5 million.

Still, there have been some significant changes since the days when legendary brokers like Edward Lee Cave and Alice Mason were the undisputed king and queen of Manhattan home sales. Real estate is now a big business, and huge, corporate firms like the Corcoran Group and Prudential Douglas Elliman have replaced the white-glove firms of old. These days, hard work and smarts trump everything -- even top-notch breeding.

"If you're brilliant and knowledgeable and people respect you, I don't care if your father was a cobbler,'" Kaiser said.

Selling via social status

Paul Purcell, head of the brokerage Charles Rutenberg Realty, recently founded a new Web site called Top

AgentGuide.com, which maintains a list of what it considers to be the city's best brokers.

He said he recently encountered a group of rookie agents who had never heard of Elliman's Lenz, the undeniable star of the real estate condo boom.

"I was talking to some young brokers, and I threw Dolly's name out, and they didn't know [her]," said Purcell. "The world is changing."

Though golden-blonde Lenz is still often in the public eye with regular appearances on CNBC, she has often made the headlines this year for losing listings (including mega-projects Manhattan House and Miraval Living) rather than selling them.

It's likely, however, that these young agents would have heard the names of two other blonde brokers: Corcoran's Candler and Sotheby's Serena Boardman (see "Park Avenue princess now top broker on Park").

Candler -- who made headlines for winning the listing of the late Brooke Astor's duplex at 778 Park Avenue -- is now listing penthouse co-ops at 1020 Fifth Avenue and 1040 Fifth Avenue, both priced north of $30 million. In August, Candler, the great-great-granddaughter of Coca-Cola Company founder Asa Candler, sold former Lehman Brothers chairman Dick Fuld's co-op at 640 Park for $25.87 million, one of the biggest sales of the year.

Boardman, meanwhile, was picked to sell Bernie Madoff's co-op at 133 East 64th Street.

Part of the reason these two brokers have been so successful recently, sources say, is their impeccable connections to polite Manhattan society.

Other society brokers who have made headlines recently include Brown Harris Stevens' Sloane, who's listing a co-op unit at 998 Fifth Avenue for $34 million; and Meredyth Smith, a senior vice president at Sotheby's International Realty, who, along with Boardman, has the city's most expensive listing, a townhouse at 22 East 71st Street. Henckels, who is married to socialite Fernanda Kellogg, recently took over the Astor apartment from Candler, and is also marketing an apartment once owned by Nelson Rockefeller at 810 Fifth Avenue for $27.5 million.

These brokers are similar in social status to the high-end brokers of the pre-condo era, when the world of Manhattan real estate was much smaller, and much more prim and proper. Back then, choosing a broker "was a very white-glove thing, where you chose a friend," Purcell said.

Cave and Mason (the latter known for her dinner parties) catered to the buyers of expensive real estate along Park and Fifth avenues, operating primarily through personal connections, with little need for advertising or self-promotion.

"We either know them socially, we went to school with them or we once were married to them," Cave once said of his clientele.

The new crowd

This clubby atmosphere began to change when condos came along, and the change accelerated during the recent building boom.

Suddenly, brokers could get rich quickly and easily, without having to worry about pleasing a co-op board.

As a result, there was "a rush of thousands of new brokers who came into the business at that time, who did not necessarily have the family ties to the 'right' co-op customers," said Michele Conte, sales director at the new Midtown condo Centurion, who previously worked at Brown Harris Stevens. "They just had great business and networking skills. A new breed of elite broker became recognized for hard work, not because of a prestigious family background."

Lenz is perhaps the best-known of this new breed of broker, building an empire of new condo sales and appearing in BlackBerry commercials. Then there is Corcoran's Dennis Mangone, who famously erected a billboard of himself above new condo 505 Greenwich Street, and Tel Aviv native Ilan Bracha, who by age 33 was the head of his own group at Elliman and founder of the development company B+B. Shvo became Elliman's top-grossing broker -- with over $300 million in sales -- while still in his late 20s, before forming his self-titled new development marketing firm.

The defining characteristic of that era was that "someone [could] come from a foreign country, knowing no one in New York, and be successful," Purcell said. "Shvo didn't know anybody, and he created a viable business. There was room for new brokers, upstarts, people who wanted to work hard. Prior to that, it was very hard for them to get a leg up in the industry."

Small, boutique firms began to fall by the wayside.

Edward Lee Cave was absorbed into Brown Harris Stevens, Mason closed her office after losing several of her top agents, and the industry was largely dominated by giant firms with well-maintained Web sites and large marketing budgets.

Around that time, Shvo told the writer Steven Gaines: "Do you think a 38-year-old partner in Goldman Sachs who makes $8 million a year knows who Alice Mason or Edward Lee Cave is? You know what? They're all going to drop dead soon. I'm the new generation of real estate broker."

Many of these new brokers didn't bother with co-ops, and likely would have found those doors closed to them if they tried. But with so much business to go around, it didn't matter.

Condos fall out of fashion

When the credit crisis hit, buyers did an about-face. Suddenly co-ops were more in vogue as new development condos fell out of favor, in part because obtaining mortgages in partially sold buildings became all but impossible.

Co-ops' requirements for large down payments and post-closing liquid assets, viewed as hindrances during the boom, are now widely credited with helping to insulate New York from the high foreclosure rates that are dogging the rest of the country.

Moreover, the boom had seen the sellout of some very expensive new luxury condominiums, including 15 Central Park West and the Plaza. Now those deals have closed, and there are very few new developments coming online; that means more of the attention-grabbing new listings are townhouses or co-ops.

"Basically, you're not seeing as many of those huge, high-[priced] condo deals," said one broker. "There is more focus on the high-end co-ops, just because a lot of the condos have sold."

There are still some very expensive condo sales occurring, of course, but many of them are deeply discounted resales, like the June sale of a $37.5 million apartment at the Time Warner Center, down from its original asking price of $49 million.

The co-op club

The same factors that have buoyed high-society brokers to their current level of prominence are now making it harder for the Mangones and Brachas of the world -- and their lesser-known colleagues -- to succeed.

"The kind of people who sell new condos are not necessarily going to be the kind of people who know the ins and outs of the most exclusive co-ops," Gross said. "Those two products couldn't be further apart. It's not even apples and oranges, it's raspberries and watermelons."

It's not easy for agents who previously specialized in new condos to transition to co-ops. For one thing, it's simply harder to buy and sell co-ops, thanks to their gatekeepers: notoriously fussy co-op boards.

"It has always been harder for brokers to learn, and to play, the co-op game," said Centurion's Conte. "The co-op broker must decide which co-ops to show the buyer, and which ones to avoid, based on knowledge of the buyer and the board. That takes a great deal of finesse."

Frederick Warburg Peters, president of Warburg Realty Partnership, said managers at his firm carefully train new agents in the art of crafting board packages.

"In terms of boards, there's no substitute for experience," Peters said.

Moreover, top co-op brokers tend to be a tightly knit group who prefer to work together, making it harder for outsiders to do deals with them.

"If a broker calls me and says they want to show at 834 Fifth or 960 [Fifth Avenue] or whatever else, in one minute I know by the broker if I have to ask them for the qualifications of the customer," Kaiser said. "With [some] people, you certainly do, because [they] don't know what's going on."

It's not impossible for a new agent to break in, but it's "certainly easier" if that agent already has co-op contacts, he said.

"There's always room for a newcomer, but they'd better have access to the club," Kaiser said, only half-jokingly.

Another difference is that co-op boards and customers prefer their brokers to be discreet, keeping deals out of the newspaper whenever possible. That runs contrary to the way many of the top condo brokers made names for themselves during the boom.

"The aggressive condo broker is going to want his name in the papers all the time," Gross said. "The subtle, social broker is going to operate in a very different way."

Condo brokers have reacted to the new climate in different ways. Some have been able to adapt; Lenz told The Real Deal that about 50 percent of her deals are now co-ops, and she still has a number of new development condo projects, like the Apthorp on the Upper West Side.

"She built such a thriving business on that side that everybody wanted her on the other side," Purcell said.

Others have stepped away from traditional brokerage. Elliman brokers Meir "Mickey" Roth and Lenny Sporn, former members of the Bracha Group, left last month to start a new real estate company that specializes in purchase groups of international buyers.

Still, brokers say all is not lost for newer agents, if they are hard-working and skilled.

"In the end, you can know an awful lot of people, but if you don't look like you're going to do a good job for them, they aren't going to hire you," said Peters.

Board packages in particular are "a question of being thorough and precise," said Amanda Brainerd, an executive managing director at Warburg Realty, who went to the Upper East Side's Nightingale-Bamford School and then to Harvard. She said she views society connections as "a nonissue."

"I've seen some very famous brokers do terrible packages," she said.

 

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New York Could See a Double Dip in Residential Market Some experts predict a second slide of home prices in the city November 2009—By Alison Gregor While prices and sales activity have picked up in…... Read more >

New York Could See a Double Dip in Residential Market

Some experts predict a second slide of home prices in the city

November 2009—By Alison Gregor

While prices and sales activity have picked up in New York in the last couple of months, a number of analysts are predicting a second round to the downturn here, with prices likely to fall. Estimates range from a drop of a few percentage points to up to 17 percent.

Barry Ritholtz, the New York-based CEO and director of equity research at Fusion IQ, an online quantitative research firm, noted that "there's still some downside to prices" in New York.

"The good news is, the worst of the bloodbath is probably behind us in terms of falling prices," he said. "The bad news is, unemployment continues to tick up and foreclosures continue to ramp up. I do not think New York is at a bottom quite yet."

Financial analysis firm Fiserv predicted last month that the New York City metro area will underperform the nation as a whole over the next two years, with prices falling another 17.4 percent by June 2011.

The biggest problem New York is facing is unemployment. According to the state Comptroller's office, the city shed 115,700 jobs as of June and is expected to hit 328,000 jobs losses -- 47,000 of them in the securities industry -- by the third quarter of 2010, boosting an unemployment rate that has already hit 10.3 percent.

Jonathan Miller, the president of appraisal firm Miller Samuel, said there has never been an economic recovery in New York at the same time that the finance sector was suffering.

"Employment on Wall Street in New York City is still falling," he noted. "There has not been an economic recovery in New York City, ever, when Wall Street employment was declining -- even factoring in bonuses."

Miller also noted that one factor behind the recent reported uptick in Manhattan activity -- sales jumped 45.6 percent in the third quarter compared to the second quarter, while the median price rose 1.7 percent in the same time -- is seasonality.

"Though [prices are] adjusted for seasonality … I still think seasonality is playing a role," he said.

With Manhattan prices already off roughly 20 percent from their peak, Miller predicted either mild housing-price erosion of a few percentage points or, at best, a few years of "moving sideways," which would mean flat prices.

Meanwhile, there are also homeowners in New York City, mostly in the outer boroughs, who have been able to hang on until now, but, like their counterparts nationally, are expected to default on their mortgages and see their properties go into foreclosure. More foreclosures tend to increase sales activity, but also put downward pressure on real estate prices, Miller said.

About 11.6 percent of mortgage borrowers in the New York City area are underwater, according to data from Deutsche Bank. And, as The Real Deal has reported, a recent report by the bank offers a dire prediction that 77 percent of borrowers with outstanding mortgages in the New York City area will be underwater by the first quarter of 2011, well above the bank's projected national average of 43 percent.

Nationally, some of the more bearish economists predict a round two on the recession in housing prices as well.

At The Real Deal's annual forum last month, leading economist Nouriel Roubini said he expects home prices to fall another 7 to 10 percent nationwide over the next year. Roubini, who has been called Dr. Doom for his dire (and largely accurate) forecasts, predicted an extended recession or "U-shaped" recovery, and said there might even be a "W-shaped" recovery, meaning that there could be a second financial crisis ahead.

Fiserv predicts an additional national price drop of 11.3 percent by June 2010.

Other analysts predict that the number of foreclosures -- which as of September had been up for 43 straight months -- will continue to increase through 2010.

"Prices will resume declining again early next year," predicted Mark Zandi, the chief economist of Moody's Economy.com. "The bulk of the price declines are over, but I think we've got another 5 or 10 percent to go. The principal reason for that is a pick-up in foreclosure sales early next year."

The loan modification program created by President Obama, which has taken loan servicers a while to figure out and apply to qualified homeowners, has simply delayed pushing other homeowners through the foreclosure process to sale, Zandi said.

"As the loan servicers figure out who's qualified, they'll resume pushing loans through, and those foreclosure sales will pick up again," he said.

Real estate experts point to rising national loan delinquency rates as an indication that foreclosures will grow. For instance, the serious delinquency rate on homes backed or held by Fannie Mae, the government-backed mortgage finance behemoth, topped 4 percent in July for the first time in history.

The possibility that today's historically low interest rates might rise is also a cause for concern. The federal government has prompted homebuyer activity by keeping interest rates artificially low, primarily by purchasing more than a trillion dollars of undesirable securities through Fannie and Freddie. Those purchases will continue through March 2010, Zandi said.

"If the government ends its commitment at that point in time and doesn't continue to buy, then mortgage rates will rise more quickly," he said.

Miller agreed, saying, "Who's going to buy those securities? If banks have a hard time selling them to investors, that means mortgage rates are going to go up."

That rise in the cost of money, experts said, should place additional stress on the housing market as well.

Though he's not predicting a second financial crisis like Roubini, Ritholtz predicted a "W" shape to the housing market's recovery, since markets tend to overcorrect in recovery.

"I wouldn't be surprised to see homes continue to get cheaper over the next two to three years," he said. "Although it won't be the 25 to 30 percent drops we've seen so far, there's probably another 5 or 10 percent ... to go in some regions," including New York. And up to 15 percent in some parts of the country, he said.

Still, the exact timing and extent of the home price contraction is difficult to predict, he said. Much of the discussion about national housing prices doesn't necessarily apply to Manhattan or brownstone Brooklyn, for various reasons, said Frederick Peters, the president of Warburg Realty Partnership, the Manhattan-based brokerage.

For instance, Manhattan and brownstone Brooklyn have not suffered from a high rate of foreclosures, primarily due to residents taking out fewer of the Alt-A and exotic home mortgages, but also due to the rigorous process used by co-op boards to assess potential buyers, Peters said.

Peters said he anticipates that Manhattan and brownstone Brooklyn will hold onto the price gains seen in the last quarter -- barring an unforeseen calamity, such as another large round of layoffs in the financial sector. Peters said he expects prices to remain flat for the next three to six months. He resisted predicting beyond that.

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Killing deals to protect property values is risky business We've always thought it sounded dubious for a co-op board to turn down a sale because the price was too low, and we've wondered whether it's…... Read more >

Killing deals to protect property values is risky business

We've always thought it sounded dubious for a co-op board to turn down a sale because the price was too low, and we've wondered whether it's legally defensible.

Apparently, it depends on who’s complaining.

According to an article in last week's New York Law Journal, courts generally put the kabosh on the practice when sellers sue, on the grounds that price-based turndowns are an unreasonable restraint on an owner's right to transfer shares.  But because co-op boards don’t owe a fiduciary duty to buyers, disgruntled buyers are out of luck.

The article’s authors—a pair of well-known condo & co-op attorneys from the law firm of Stroock & Stroock & Lavan—suggest some alternatives for boards concerned that the sales price that doesn’t reflect the value of a typical apartment and will depress future sales in the building. (A downloadable copy of the article is available here on Stroock's web site.)

One option is for a co-op board to peg the turndown on something else: Finances, credit rating, litigation history, personal impressions from an interview or application, and bad references are all legitimate reasons to kill a deal.

Another alternative is to green-light the sale but try to make sure that later buyers understand why the apartment sold below market:

“Presumably, if a subsequent purchaser knows the circumstances surrounding a below-market sale, that sale should not affect the price of a later sale, so long as the physical conditions of the units are different. Therefore, if a board develops a reliable mechanism to memorialize the reason for a below-market sale, it should not need to use floor price to disallow an apartment sale.” 

Curious about what form the ‘reliable mechanism’ might take, we asked Eva Talel, one of the article’s co-authors.

“Many buildings maintain a list of their sales for appraisers, and if they don’t, they should,” says Talel.

“You put an asterisk next to the apartment and explain that it was an atypical transaction because it was an estate sale or in very poor condition,” she explains, noting that it’s usually the managing agent’s responsibility to maintain a transfer history list. 

“This is also very, very critically important for refinancing mortgages—if an appraiser isn’t aware of the reasons 5C sold at very low price compared to 6C, they’re going to look at that number as the last transfer,” says Talel.

To get the brokerage community's perspective, we checked in with Frederick Peters, the president of Warburg Realty.

He notes that most buyers these days get price histories from StreetEasy.com and tend to assume that sales prices accurately reflect market values “no matter what you say” to the contrary.

But the bigger problem, he says, is price-related turndowns usually happen because the board is out of sync with reality, not because the price is out of sync with the market. 

“There have been a number of what we perceive as price-related turndowns since Jan. 1, but in fact the prices were market driven,” says Peters. “The board members were simply behind in their understanding of how great the drop in values had been.  Most boards, like most sellers, believe their building is ‘different.’”

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Inside Real Estate Condo Lending Restrictions, Aimed At Lowering Risk By KATHLEEN DOLER, FOR INVESTOR'S BUSINESS DAILYPosted 08/27/2009 06:17 PM ET Despite steep price cuts, selling problems plague condominiums…... Read more >

Inside Real Estate
Condo Lending Restrictions, Aimed At Lowering Risk
By KATHLEEN DOLER, FOR INVESTOR'S BUSINESS DAILYPosted 08/27/2009 06:17 PM ET

Despite steep price cuts, selling problems plague condominiums in the nascent rebound of residential real estate.

Lenders are scrutinizing condo complexes and their homeowner associations like never before, real estate agents say, making it especially hard to get a condo mortgage.

Without lending, condos sit unsold — with some going into foreclosure — or they sell to investors, who sometimes buy in bulk and typically rent out the units. But banks and mortgage backers don't like to lend into complexes with too many rentals or foreclosures, on account of risk. And so the proverbial vicious circle spins.

"Anyone with a pulse could get financing a couple of years ago; now no one can get financing," said Frederick Warburg Peters, president of Warburg Realty Partnership in New York. "The refusal of banks to loan to appropriate people buying in appropriate buildings just inhibits the recovery of the marketplace."

The supply of condos for sale stretched out a bloated 15.1 months in July, National Association of Realtors data show, compared with 8.6 months for single-family homes. The median condo price was down 18.9% from a year ago, vs. 14.6% for single-family homes, though sales of both picked up.

Condo lending rules tightened in January and again in March. They aimed to ensure that only high-quality loans would be packaged into securities, to avoid the kind of mortgage-market collapse that kicked off the housing crisis.

Prior to March 1, 51% of condos in a new complex had to be pre-sold for Fannie Mae (FNM) or Freddie Mac (FRE) to back a condo loan. Then, the percentage was upped significantly to 70%.

No 'Easy Street' Now

Legislators and Realtor associations have been trying, so far unsuccessfully, to get condo lending standards loosened. In June, Reps. Barney Frank, D.-Mass., and Anthony Weiner, D.-N.Y., wrote a letter to Fannie and Freddie saying that the 70% sales threshold "may be too onerous." They asked for "appropriate adjustments" to the condo underwriting standards.

This month Steve Goddard, president-elect of the California Association of Realtors, was scheduled to meet with representatives of Fannie Mae to talk over Fannie's condo restrictions.

Goddard says the lack of lending is devaluing condos further and hurting homeowners and lenders.

"By making it more difficult to sell a condo ... property values continue to go down on for-sale condos," he said.

"Fifty percent sold is a successful new project, especially in an existing neighborhood," said Michael Slattery, senior vice president of the Real Estate Board of New York.

A few lenders will loan on condos and keep the loans in their own portfolios. However, experts say to get these loans buyers must have a huge down payment, as much as 40%, perfect credit and often a relationship with the lending bank.

Goddard and other real estate professionals also say that Fannie and Freddie agency rules on condo lending are not very well understood, and are a moving target. Exceptions to the 70% rule exist — developers can apply for one, but many don't know that, says David Crowe, chief economist at the National Association of Home Builders.

Here are some rules Fannie and Freddie require if a lender seeks government backing for a condo loan:

• Owner-occupancy must be 51% or more throughout the complex.

• At least 70% of units must be pre-sold, in a new complex.

• Approval is required by Fannie's Project Eligibility Review Service, in a new complex.

• Condo association dues can be late for no more than 15% of unit owners.

• No more than 10% of units can be owned by a single investor, individual or firm.

• A minimum 25% down is needed for a condo loan. Otherwise buyers must pay closing-cost fees equal to 0.75% of the loan, regardless of credit score, under new rules that began in April.

Red Tape Leaves Mark

Overbuilding caused some of the pain now being felt in the condo market in the Sunbelt. And condos are often more difficult to sell than single-family homes, due to condo association restrictions and high dues.

But tight lending skews the market to investors, who have cash. If they buy in bulk, that can cause a complex to be unable to meet the 51%-or-higher owner-occupancy rule and the rule about no more than 10% of units being owned by a single entity.

"We're just getting overwhelmed with big groups," said Peter Zalewski, a principal with the consulting firm Condo Vultures, which operates in Florida helping investors find and buy properties.

"We're very happy with the current policies by Fannie and Freddie," he said. With those policies in place, "often the only savior for a condo developer is a bulk buyer."

Zalewski says that in recent months, a number of bulk Miami condo sales have gone for well under current construction costs.

More Changes Coming

Condo lending is about to get even tighter. On Oct. 1, the Federal Housing Administration's spot-loan approval process for condos will be eliminated. After that, condo projects will have to go through a stricter Housing and Urban Development approval process in order for FHA-insured financing to be available .

"The FHA is tightening its guidelines to match some of Fannie's guidelines," said Grant Stern, president of Morningside Mortgage, in Bay Harbor Island, Fla.

He'll be working with developers and others, he says, to get their condo complexes through the new HUD review process.

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Gotta Move, Gotta Sell By TERI KARUSH ROGERS Published: July 17, 2009 AS most New York City homeowners hunker bearishly inside their largest depreciating asset, one unfortunate contingent has no choice…... Read more >

Gotta Move, Gotta Sell
By TERI KARUSH ROGERS
Published: July 17, 2009

AS most New York City homeowners hunker bearishly inside their largest depreciating asset, one unfortunate contingent has no choice but to wade into the storm-tossed market. For these accidental sellers, life has gotten in the way — in the form of a job upheaval, imminent offspring, holy matrimony or the dissolution thereof.

Involuntarily thrust onto the catwalk, many are now stranded there, unable to unload their homes, even at a loss. Those who do sell are finding it takes longer: Figures for the most recent quarter show that it took Manhattan apartments nearly five and a half months to find a buyer, 20 percent longer than at the same time last year, according to Miller Samuel, an appraisal firm.

“The world has changed,” said Frederick W. Peters, the president of Warburg Realty. “In a market like this, I can’t guarantee a quick sale at any price.”

Meanwhile, sellers unprepared for the new reality watch helplessly, and with no small shock.

“You take personally the series of people who fail to buy your property, which is like saying that your child is homely,” Mr. Peters said. “And on top of that, you also have urgency. It’s incredibly stressful. Depression and anxiety usually go along with that.”

Just ask Adam Rogers, 45, a United Nations spokesman, who only a year ago thought he had it made when he was transferred to Switzerland from New York.

Until then, Mr. Rogers, his wife, Gillian, and their two small children had been comfortably ensconced in a four-bedroom, 2,000-square-foot condo in Clinton Hill, Brooklyn. The couple bought it for $599,000 in cash in January 2006, after selling the Hell’s Kitchen apartment they had outgrown for $920,000 at the height of the market, and pocketing a profit that was three times what they had paid.

They hoped to make a similar killing by buying into another gentrifying neighborhood.

“I used what I called the Starbucks index,” Mr. Rogers said. “There were no Starbucks around in Hell’s Kitchen when I bought there, and when I sold there were four. There were no Starbucks here either when I bought.”

With no mortgage to pay, a common charge of only $249 a month and abated real estate taxes, the family could easily afford life on Mr. Rogers’s U.N. salary and Ms. Rogers’s income as a freelance publicist.

Then, a little over a year ago, his job was reclassified into a category that required him to relocate at regular intervals. Bidding for a position abroad, he won a coveted spot as the spokesman for the U.N.’s Development Program in Western Europe in Geneva.

“I had always wanted to live there,” he said. “I thought I was sitting pretty. Everything happened like clockwork, except I was a little too optimistic about the apartment.”

Late last summer the couple decided to rent out the apartment, in case they returned to the United States after Mr. Rogers’s five-year rotation abroad. They listed it at $3,600 a month.

But the rental house they found in Geneva cost $5,000 a month, and other expenses mounted, even as the renter they had counted on failed to materialize. When it became clear that they would have to tap into equity, the Rogerses decided in August to put the apartment up for sale.

“There’s a higher cost of living over there, and the house was a bigger space, so I bought new furniture,” Mr. Rogers said. “Because I was very optimistic the apartment would sell, I probably wasn’t as frugal as I could have been.”

At first the Rogerses asked $679,000, the price at which their neighbor had sold his apartment.

They have since cut the price several times and switched agents; they are now working with Anne Buckley of Fillmore Real Estate in Fort Greene, Brooklyn. The apartment is listed at $599,000; they will lose about $60,000 in transaction costs if it sells at that price.

So far, the couple have had no offers. The only potential renters were four roommates from nearby Pratt Institute, whom Mr. Rogers turned away because he knew that the condo board — stung by student renters before — would never approve the sublet.

He has been using credit cards to finance part of his new life abroad.

“The first six months I didn’t spend much time thinking about it,” said Mr. Rogers, who with his family was on a trip back to New York, staying in the barren apartment on borrowed mattresses.

“I started getting worried in January. I’ve maxed out all my credit cards. Right now we’re stuck at Hertz for two hours trying to rent a car because none of the credit cards work — the wire transfer I made before we left apparently has a delay of several days.”

He says he feels the financial stress affecting him, but struggles to hide it.

“I take a lot of long walks through the mountains and try to stay optimistic.”

His wife, Gillian, says she too feels the strain, especially living in a city where hamburgers can cost $45 and her son’s back-to-school clothes cost three or four times more than back home. She hopes to find some freelance publicity work abroad to supplement their income.

In the meantime, she said, living frugally comes naturally to her, and she tries to keep the rest in perspective: “I look around the world and realize it obviously could be somewhat worse.”

While many accidental sellers are forced into the market for job-related reasons, others are led afoul by the stork.

“Right now, we might put the baby in the closet,” said Elizabeth Demaray, 41, of the compromise she and her husband, Hugo Bastidas, 51, may be forced to make when their first child arrives next month. “The closet is 54 inches wide and the crib is 53 7/8 inches wide. I just need to find an itty-bitty changing table.”

Last year, Ms. Demaray, a sculptor and assistant art professor, and Mr. Bastidas, a painter and art professor, moved to East 116th Street near Lenox Avenue, to a two-bedroom condominium that he also uses as an art studio.

But the 1,200-square-foot space is not big enough for the couple, his canvases, a baby and an exceptionally vocal Bengal cat that must be sequestered in its own bedroom at night if the humans are to sleep.

Mr. Bastidas paid $620,000 for the condo in February 2007. The couple listed it early this spring for $715,000 with Karen Shenker, an associate broker at Corcoran. The asking price was about what comparable units in the building, which has been LEED certified, had sold for. There have been no offers.

“If we wind up staying, we’re going to have to find a studio space for both of us, probably somewhere toward Lower Manhattan or possibly Jersey City,” Ms. Demaray said. “But the cat won’t work in the closet.”

Still, many parents would agree that a baby in the closet is better than two colicky mortgages demanding to be paid at once. That is the unhappy situation of a couple of other parents-to-be, Jon Vernon-Browne and Adriana Herrera.

Days away from the birth of their first child, the couple are living in a newly purchased five-bedroom house in North Caldwell, N.J., while carrying the two-bedroom downtown condo that Mr. Vernon-Browne, 41, an information technology manager, bought for $1 million in February 2007, before he became seriously involved with Ms. Herrera.

It wasn’t until they married and were expecting a child that they realized they would be better off in New Jersey, close to Ms. Herrera’s job and her parents.

At first they planned to rent out the condo at 15 Broad Street (a k a Downtown by Philippe Starck) to wait out the down market, hoping to get $4,300 a month. But their broker helped them understand that because they were taking out a substantial mortgage on their house, they might need the equity from the condo for peace of mind.

They listed it in May for $1.1 million, and have had one low-ball offer, which they rejected. In the meantime, they closed on a $1.05 million house in New Jersey, so that they would be settled before the baby’s arrival.

“There are a lot of feelings going around at the moment,” Mr. Vernon-Browne said. “We are excited about the arrival of our first kid. But we are feeling pretty stressed out about preparing for that, moving to a new house and having a double mortgage.”

He said they were losing $1,000 to $1,500 per month carrying both properties.

“We’ve definitely become a bit more desperate,” said Mr. Vernon-Browne, who may consider a short-term rental at this point.

Nicole and Charles Poliacof are newlyweds and no longer need his and hers apartments. She owns her place and he rents, but as she says, “If my husband and I lived together in my studio, we would be divorced.”

So, Nicole, 31, and Charles, 39, live in his one-bedroom $4,170-per-month apartment on the Upper East Side. They have been trying to sell her nearby property since May.

So far, the 600-square-foot postwar apartment — listed at $410,000 with Shirley Morris and Barbara Blumberg at Corcoran — has received no offers.

The subway construction project outside Ms. Poliacof’s building on Second Avenue and 69th Street isn’t helping. “Unfortunately, there are dug-up sidewalks right there,” she said, “and the unknown construction time frames of the M.T.A. have caused some uncertainty.”

The extra carrying costs of the studio are around $2,100 a month, she said. While it’s doable for a while, she said, some lifestyle changes may be necessary come fall. Meanwhile, the couple’s plan to shop for a two-bedroom apartment in which to start a family is on indefinite hold.

“We may readjust our price soon,” Ms. Poliacof said. “Another option is pursuing a renter, though it’s a challenge to go through the co-op board. But it would definitely put us at ease.”

Couples at the unraveling end of a marriage are also finding that the market is aggravating an already difficult situation.

“When people are getting divorced, a physical separation is equally important,” said Julie Friedman, an executive vice president at Bellmarc.

A lingering denouement is no good for anyone.

“Often the parties can’t decide how to market the apartment, and all the contact is through the attorneys, which adds up to extraneous legal fees,” said Ms. Friedman, who has watched the slowing market throw a wrench into more than one client’s divorce proceeding. “Adjustments in price strategy and marketing strategy, open house schedules — everyone feels the need to add their mark or perspective. It makes things bitter and acrimonious.”

The situation is different when it is propelled by a happy event.

Danielle Dugan, 34, a derivatives-assistant-turned-yoga-instructor, is seven months pregnant with her first child, and would like to sell her one-bedroom Brooklyn Heights co-op by the time the baby arrives in September.

The apartment is a fifth-floor walk-up.

“I’m really fit because of my occupation,” Ms. Dugan said, “and my husband happens to be naturally fit. I don’t see the stairs as a huge problem now, but it’s definitely a factor when you add in me, the baby, groceries and laundry.”

Ms. Dugan, who bought the apartment in 2006 when she was single, listed it in April for $357,000, with Eve Levine, an agent at Corcoran.

“I got pregnant in December and we thought about moving for a while,” she said, “but I guess we were processing the pregnancy first, because it was a surprise.” The only offer thus far has been a low bid from a buyer unwilling to negotiate or put more than 10 percent down. Ms. Dugan recently dropped the price of the apartment to $340,000.

“We’re pretty confident that it will sell eventually to the right buyer, probably someone who was single like I was when I bought it,” she said. “We’re just going to stay and deal with it until we sell it. No one’s really worried about me and I’m not either.”

She says it helps that a lot of her friends in the neighborhood are raising young children in less-than-perfect living arrangements.

“We know a lot of people in their mid-30s who are still getting established,” she said. “So this doesn’t impair my joy. It was a decision for me to pick quality of life and happiness over making a lot of money. It just is what it is and there’s nothing I can really do to change it.”

 

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Saunders & Associates Teams With Warburg Realty In Strategic Alliance Bridgehampton - Saunders & Associates, a leading brokerage firm based in Bridgehampton, and Warburg Realty Partnership, one…... Read more >

Saunders & Associates Teams With Warburg Realty In Strategic Alliance

Bridgehampton - Saunders & Associates, a leading brokerage firm based in Bridgehampton, and Warburg Realty Partnership, one of Manhattan's oldest and most respected residential real estate firms, report to have formed a strategic alliance to "further enhance the industry-leading services for buyers and sellers of luxury homes."

“We share a mutual respect and business philosophy with Warburg Realty and their talented team of agents," Andrew Saunders, president of Saunders & Associates, commented on the association. “The goal of this new alliance is to provide yet another level of the best-in-market real estate expertise our firms have come to represent."

Saunders opened its first office last Fall and has quickly recruited some of the top deal makers in the Hamptons. Recently the firm has sold several multi-million dollar properties and has been selected by high profile clientele to represent their properties for sale or for rent.

“We are delighted to partner with Saunders to bring an additional level of excellence to the services we already provide to our clients," Frederick W. Peters, president of Warburg Realty Partnership, commented. “By combining our resources and leveraging the experience of some of the industry's most talented agents, we can offer access to the finest properties in both New York City and the Hamptons."

Since its formation more than a century ago, Warburg Realty has sought to improve and enhance its service "offerings to meet the ever-changing needs of residential clients. This strategic alliance further strengthens both firms' ability to provide comprehensive residential real estate brokerage experience to buyers and sellers of luxury properties in New York City and the Hamptons."

 

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Warburg Realty and Saunders & Associates Form Alliance Serving Homebuyers and Sellers in NYC and the Hamptons Posted By Susan Piperato NEW YORK, NY—Warburg Realty Partnership, one of Manhattan’s…... Read more >

Warburg Realty and Saunders & Associates Form Alliance Serving Homebuyers and Sellers in NYC and the Hamptons

Posted By Susan Piperato

NEW YORK, NY—Warburg Realty Partnership, one of Manhattan’s oldest and most respected residential real estate companies, and Saunders & Associates, a leading brokerage firm based in Bridgehampton, NY, have formed a strategic alliance that further enhances their industry-leading services for buyers and sellers of luxury homes.

“We are delighted to partner with Andrew Saunders to bring an additional level of excellence to the services we already provide to our clients,” said Frederick W. Peters, president of Warburg Realty Partnership. “By combining our resources and leveraging the experience of some of the industry’s most talented agents, we can offer access to the finest properties in both New York City and the Hamptons.”

Since its formation more than a century ago, Warburg Realty has consistently improved and enhanced its service offerings to meet the ever-changing needs of residential clients. This strategic alliance further strengthens both firms’ ability to provide comprehensive residential real estate brokerage experience to buyers and sellers of luxury properties in New York City and the Hamptons.

“We share a mutual respect and business philosophy with Frederick and his talented team of agents,” continued Andrew Saunders, president of Saunders & Associates. “The goal of this new alliance is to provide yet another level of the best-in-market real estate expertise our firms have come to represent.”

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Joining 'Higher' Forces: Warburg and Saunders Create Alliance Manhattan-based Warburg Realty is forming <http://therealdeal.com/newyork/articles/warburg-forms-alliance-with-hamptons-firm> a 'strategic…... Read more >

Joining 'Higher' Forces: Warburg and Saunders Create Alliance

Manhattan-based Warburg Realty is forming <http://therealdeal.com/newyork/articles/warburg-forms-alliance-with-hamptons-firm> a 'strategic alliance' with new Hamptons brokerage firm Saunders & Associates, citing both small companies' success in their respective markets. Warburg "A Higher Standard Since 1896" Realty and Saunders "A Higher Form of Realty" & Associates plan on combining their higher forces in a financial agreement based around referral fees between brokers. Says Warburg president Frederick Peters: 'I don’t want an office in the Hamptons. The whole point of doing something like this is the acknowledgment that I do well what I do well … what I do well is sell in [Manhattan].' Both the owners of Warburg and Saunders believe that 'small company focus' will help them survive the market's downturn, owing to a sense of transparency in companies employing 150 and 25 agents, respectively.< Read less

Saunders & Associates, a Bridgehampton-based brokerage firm headed up by President Andrew Saunders, has joined with Warburg Realty Partnership, a Manhattan-based residential real estate company. The…... Read more >

Saunders & Associates, a Bridgehampton-based brokerage firm headed up by President Andrew Saunders, has joined with Warburg Realty Partnership, a Manhattan-based residential real estate company. The two businesses have formed a strategic alliance to further service buyers and sellers of luxury homes both on the East End and in Manhattan.

Saunders, which specializes in luxury properties, opened its first office last fall on the East End.

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Saunders & Associates and Warburg Realty Form Strategic Alliance to Better Serve Home Buyers and Sellers in New York City and the Hamptons Bridgehampton, NY – July 14, 2009 – Saunders & Associates…... Read more >

Saunders & Associates and Warburg Realty Form Strategic Alliance to Better Serve Home Buyers and Sellers in New York City and the Hamptons
Bridgehampton, NY – July 14, 2009 –

Saunders & Associates a leading brokerage firm based in Bridgehampton, NY, and Warburg Realty Partnership, one of Manhattan’s oldest and most respected residential real estate companies have formed a strategic alliance that further enhances their industry-leading services for buyers and sellers of luxury homes.

“We share a mutual respect and business philosophy with Warburg Realty and their talented team of agents,” continued Andrew Saunders, president of Saunders & Associates. “The goal of this new alliance is to provide yet another level of the best-in-market real estate expertise our firms have come to represent.”

Saunders opened its first office last Fall and has quickly recruited some of the top deal makers in the Hamptons. Recently the firm has sold several multi-million dollar properties and has been selected by high profile clientele to represent their properties for sale or for rent.

“We are delighted to partner with Saunders to bring an additional level of excellence to the services we already provide to our clients,” said Frederick W. Peters, president of Warburg Realty Partnership. “By combining our resources and leveraging the experience of some of the industry’s most talented agents, we can offer access to the finest properties in both New York City and the Hamptons.”

Since its formation more than a century ago, Warburg Realty has consistently improved and enhanced its service offerings to meet the ever-changing needs of residential clients. This strategic alliance further strengthens both firms’ ability to provide comprehensive residential real estate brokerage experience to buyers and sellers of luxury properties in New York City and the Hamptons.

About Saunders & Associates

Saunders & Associates is the fastest growing luxury real estate brand in the Hamptons. The marketing savvy company is known for its ability to empower its seasoned brokers to create and enable deals. Starting with its fast and cinematic website, Saunders provides exceptional service that is thoughtfully aligned with the Hamptons sophisticated culture. (631) 537-5454 www.SaundersAssociates.com

About Warburg Realty Partnership

Warburg Realty Partnership is one of Manhattan’s leading luxury residential real estate firms, founded in 1896 by Albert B. Ashforth. The company has a long-standing tradition of extraordinary service that has kept it at the forefront of New York real estate for over 100 years. The firm’s over 150 brokers are strategically located throughout Manhattan to guarantee every Warburg client the quickest access to New York’s finest properties and purchasers.

 

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Fred Peters and Miles Chapin's 630 Park Avenue in the NY Post $3.7 MILLION Park Avenue might not be on the park, but that doesn't mean you can't look out the windows of this "elegant" two-bedroom co-op…... Read more >

Fred Peters and Miles Chapin's 630 Park Avenue in the NY Post

$3.7 MILLION

Park Avenue might not be on the park, but that doesn't mean you can't look out the windows of this "elegant" two-bedroom co-op and gaze upon "tulips and flowering trees" (at least in spring). Just about every room in this classic seven -- living room, dining room, kitchen, even the maid's room -- overlooks the avenue, with the bedrooms and a "spacious" library set quietly in the back. "Ultra-high" ceilings throughout are also a plus, and there are 3½ bathrooms. The prewar apartment is "priced appropriately for today's market" -- in other words, it's a seven-figure deal. Agents: Miles Chapin and Frederick Peters, Warburg Realty Partnership, 212-327-9660 and 212-439-4502

 

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New Condos Up for Resale By Jay Romano Q I’m interested in buying an apartment in a 100-unit condominium completed in 2007. Twelve units are owned by the sponsor and are still unsold. But more troubling…... Read more >

New Condos Up for Resale

By Jay Romano

Q
I’m interested in buying an apartment in a 100-unit condominium completed in 2007. Twelve units are owned by the sponsor and are still unsold. But more troubling is the fact that 16 additional units are listed for resale. Is this a red flag that something is wrong with the building?

A
“While 16 is a large number of resale units, it is not in and of itself a reason to be concerned,” said Frederick W. Peters, the president of Warburg Realty Partnership.

Mr. Peters said that in 2007 and 2008, many new condos around the city were bought for investment purposes. “Many investors may have planned to rent and hold them, others to resell and profit immediately,” he said.

With the rental market soft and the prospects for large increases in value cloudy, these investors may be deciding that they prefer to extract their money from the investment now.

“Even in the best of times,” Mr. Peters said, “it was always typical to have a number of buyers who, for a variety of reasons, immediately placed their new condo units up for sale.”

 

 

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 Market Watch: We Love U Warburg's Frederick Peters blogs, "In the last two weeks, Warburg agents have put together 22 deals. Now, we are not the biggest company in Manhattan and we had two week…... Read more >

 Market Watch: We Love U

Warburg's Frederick Peters blogs, "In the last two weeks, Warburg agents have put together 22 deals. Now, we are not the biggest company in Manhattan and we had two week periods in 2006 and 2007 in which we put together more deals than that. Still, compared to the two or three deals a week we were assembling back in January (half of which never made it to contract) this is an extraordinary number." Let's not get too giddy, though, friends. Concludes Peters, "We are not looking for a V-shaped recovery. A nice slow U will suit us fine." [Warburg Blog]

 

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Profile Review: Frederick Peters, Warburg Realty In 1978, Frederick Warburg Peters’ wife presented her husband with a book entitled Apartments for the Affluent. Peters wasn’t so interested in the…... Read more >

Profile Review: Frederick Peters, Warburg Realty

In 1978, Frederick Warburg Peters’ wife presented her husband with a book entitled Apartments for the Affluent. Peters wasn’t so interested in the staging and decorative aspects of the apartments featured in the book. Instead, the floor plans fascinated him. “That book was a life-altering experience for me,” Peters, owner of luxury real estate brokerage firm Warburg Realty, recalled in his Madison Avenue office. “I couldn’t put it down. I still have it.”

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Looking for Bottom in N.Y. Real Estate By TERI KARUSH ROGERS WITH sales prices of Manhattan Apartments having tumbled by perhaps a quarter in just the past few months, pinpointing the bottom has become…... Read more >

Looking for Bottom in N.Y. Real Estate

By TERI KARUSH ROGERS

WITH sales prices of Manhattan
Apartments having tumbled by perhaps a quarter in just the past few months, pinpointing the bottom has become a top priority for anyone eager to buy, sell or broker a deal on a home in New York.

Some industry observers foresee market drops of 40 percent, while others think that is too extreme and suggest that price reductions of 25 percent will more be likely the new norm.

There's no question, though, that the boom-or-bust experience has arrived in Manhattan, which had seemed to be avoiding the fate of Las Vegas and Florida.

"It's almost surreal," said Dottie Herman, the president of Prudential Douglas Elliman, referring to the abrupt turnabout after the collapse of Lehman Brothers last fall. Until then, prices had been marching upward, with the median price of an apartment more than tripling in a decade.

To some degree, the rise in prices was logical in New York, where a string of outsized Wall Street bonuses lined the pockets of many buyers.
That wasn't the case in other parts of the country, which suffered from speculation and a large number of subprime mortgages.

No one has any hard numbers yet on New York because first-quarter reports, reflecting closing prices of deals struck last fall, will not be available for a few weeks.

Looking ahead, however, some believe it is possible that the average slide from peak values could reach 40 percent by the end of 2010, with variation by neighborhood and market segment. That would put values back to levels last seen around 2002.

Others are more optimistic. "I'm not disagreeing with you that values are coming down," said Pamela Liebman, the president of the Corcoran Group. But, she said, "there's no way the Manhattan market is dropping to those levels that are being talked about. Certain apartments might, but as a whole it will not happen."

Hall F. Willkie, the president of Brown Harris Stevens, said he, too, would be surprised by a decline that large.

"A lot of negative things would have to happen in the general economy,"
he said. He is seeing sales prices 15 to 25 percent below those of last summer, with renters making up an ever-increasing percentage of buyers.

And he saw a positive sign in the fact that, despite all of the bad economic news, sales volume is about half what it was this time last year.

Jonathan J. Miller, the president of Miller Samuel, a Manhattan research and appraisal company, estimates that contract prices have declined by about 25 percent since last summer.

Just how much further prices will dive may depend more on how soon and how generously banks resume lending than on the recovery of Wall Street or the end of the recession.

Ms. Herman said she expected the brunt of the pain to be borne within the next six months. Others expected the downward drift to last for a year to 18 months, until credit markets regain their equilibrium.

When will we know when the market has reached the bottom?

Frederick Peters, the president of Warburg Realty, noted that some deals his firm had brokered lately were nearing the lows being predicted by others. "Even if the New York market were to end up being 35 to 45 percent down," he said, "to the degree we're seeing deals done at 30 to 32 percent down anyway, it's not very far away."

Mr. Miller says sales activity needs to stabilize first. "You're approaching bottom when you start to see sales activity stop declining and level off," he said. "Pricing begins to push up when you have an extended period, like a year, when sales activity doesn't decline anymore."

One measure of just how anorectic sales have become is the bloated state of inventory.

"It's right now the highest since I started tracking in 1999," Mr. Miller said. Inventory levels in Manhattan have averaged 7,021 a month for the last decade, he said, and there were 10,243 co-ops and condominiums for sale at the end of February - 38 percent more than a year ago.

Many expect that the million-dollar segment will stabilize first because it is powered by first-timers who are drawn by falling prices and don't have to sell before they buy. The process is being helped along by federal efforts to increase mortgage lending: The latest stimulus package enables Fannie Mae and Freddie Mac to extend loan guarantees to New York City mortgages originated this year for up to $729,750.

Mr. Peters predicted that larger apartments, in the three-bedroom-and-up category, would stabilize over the next six months. Those buyers, he said, tend to have an easier time obtaining mortgages through private banking relationships and will become more active once sellers trim prices.

Large drops in prices are not new in the city. The last decade-long increase in prices was followed by about seven years of falling prices starting in the early 1990s, said Ingrid Gould Ellen, the co-director of the Furman Center for Real Estate and Urban Policy at New York University School of Law. Prices fell about 29 percent.

"But there's no rule that a downturn has to be six or seven years," she said. "It's possible that rather than seeing price declines spread out over a six-year period, this time it could be concentrated in a two-year period."

Indeed, both Ms. Herman and Ms. Liebman note that this recession differs from previous ones in that there are buyers on the sidelines this time.

"We see a real increase in traffic and a lot more buyers out there," Ms. Liebman said. "The fish are circling and they will eventually get hungry and start biting. What we're seeing is a big disconnect - sellers need to get more realistic, but buyers don't even think it's enough. Buyers are not hesitating to walk in and bid 40 percent off the price, but sellers aren't taking it."

Recovery, when it arrives, is predicted to be modest. Lenders aren't expected to return to the open-valve position of the boom years.

Ms. Herman said she anticipated a return to annual appreciation rates of 5 to 7 percent. At 6 percent annual appreciation (should that occur after the market stabilized), it would take about nine years for an apartment worth $1 million at peak - and about $600,000 at bottom - to regain its value, according to calculations by Mr. Miller.

The degree and rate of recovery will be influenced by various factors. A Goldman Sachs analysis of the New York City condo market published in early January addressed the possibility that pay cuts in the financial industry or a significant departure of affluent residents could reduce incomes to their pre-Wall Street boom levels of two decades ago. If per-capita incomes were to revert to twice the national average (versus more recent measures of three times the national average), condo prices would need to fall by 58 percent to match the price-to-income ratios of the late 1990s, before the run-up in the real estate market, according to the analysis.

The leveling of the boom may strike condos and co-ops differently.

As prices head south, Mr. Miller said that he expected condos to be more volatile. New construction, including condo conversions, seems likely to suffer the most. "Contract activity on new development has been much harder hit than co-op resales because of credit," Mr. Miller said.

Co-op boards, however, could damage themselves, he said, if they become too picky with buyers.

"The danger they face is that co-op boards are in denial about the change in the market," Mr. Miller said. "They've been even more conservative with this downturn in terms of financial qualifications - if you work on Wall Street now that's like a liability - and they've been killing sales that they feel are low, to protect values in the building."

That sort of behavior only depresses values within a building. "It gets a reputation in the brokerage community of being unrealistic about market conditions and that makes it much more difficult to attract buyers," Mr. Miller said. "I'm not saying they shouldn't be prudent, but by overreacting they are doing what lenders are doing, which is damaging the collateral they are trying to protect."

Mr. Peters said his firm had negotiated some co-op deals "dramatically below where prices have been."

"What we see is that boards are scrutinizing the purchases carefully but not striking down the deal because the price isn't high enough," Mr. Peters said. "I definitely agree that in the current environment, that would be profoundly foolish, because the world is a different place."

A different place and possibly a better one, said Ms. Liebman, who like many brokers manages to see the positive in any environment that comes along. "Why should an average one-bedroom with nothing special to offer cost well over a million? The market got ahead of itself, and this correction is good for New York because it brings the affordability back in line."

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New York Magazine Basic Instinct: Bye-bye, screening rooms. Give me square footage and closet space. By S.Jhoanna Robledo, Published Feb 1, 2009   When the real-estate market was booming,…... Read more >

New York Magazine
Basic Instinct: Bye-bye, screening rooms. Give me square footage and closet space.

By S.Jhoanna Robledo, Published Feb 1, 2009

 

When the real-estate market was booming, all those years ago at the beginning of the 21st century, a tower seemed to be rising on every corner in Manhattan. The people developing and selling these buildings had to differentiate their products, most of which had the same ceiling heights, oak flooring, and more or less standardized kitchens and baths. So a lot of them did it with glitz: Add a super-duper lobby, a wine cellar, a pet spa to one of those buildings, and you could advertise your new development as “unique living!” Buyers, too, joined in. Many had new money, from Wall Street; others were envisioning a Sex and the City life, and amenities like a dedicated game room for the guys or a spa for the women seemed appropriate.

When Vanessa Uzan bought a condo a few years ago, just across the river in New Jersey, she wanted something fabulous and fresh. Now she is looking to move back into Manhattan, and everything’s different. “I’m not swayed by a brand-new kitchen. I don’t need a granite countertop,” she says. Uzan is strictly focused on the fundamentals: location, square footage, closet space, and maintenance fees.

All over the real-estate business, observers are saying that same calculus is playing out. “It’s more about the space, the home, what life they can live in it,” says Century 21’s Barbara Lamb. Buyers are far less quick to forgive subpar locations or odd layouts in sexy projects. “When the market was hot, they’d see amenities and cool configurations and respond to that,” says JC DeNiro executive vice-president S. Hunie Kwon. “I sold spaces where, in the final walk-through, buyers would say, ‘Oh, I didn’t know there were only three closets.’ ” But at his recent open house, he says, hardly anyone admired the fancy backsplash and high-style furniture; the efficient layout and washer-dryer “really got them going,” Kwon says.

Warburg Realty’s Frederick Peters says apartment-hunters are no longer “willing to be teased by what they thought was sexy. This is a value marketplace. Gimmickry won’t motivate.” Instead, says developer Henry Justin, whose 211 East 51st Street condo has only the amenities he deemed essential—doorman, gym, a garden. “You want to make sure your home is where your money’s spent.” Particularly if buying it leaves you too broke to go out.

 

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THE WALL STREET JOURNAL. A Look Ahead/What’s Next Industry Luminaries Look Ahead: What can we expect in 2009? Residential Sales and Development Price-wise, big apartments are taking the biggest hits.…... Read more >

THE WALL STREET JOURNAL.
A Look Ahead/What’s Next

Industry Luminaries Look Ahead: What can we expect in 2009?

Residential Sales and Development

Price-wise, big apartments are taking the biggest hits. Historically, in the past 20 years, the upper end of the market has been the most insulated, but now, with the financial world the hardest hit, buyers are shying away from larger units. In markets like this you tend to see a flight to the familiar. Buyers feel more secure investing in more established neighborhoods. Therefore we anticipate that as in other downturns, the Upper East and West Sides, the West Village and the most established areas of Tribeca will remain strong.

Frederick W. Peters
President, Warburg Realty Partnership

 

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THE REAL DEAL When Comps Fall Short With Fewer Sales, Naming a Price Difficult In Today's Market By Lauren Elkies, August 2008 When sales velocity is slow it can be difficult to accurately price…... Read more >

THE REAL DEAL
When Comps Fall Short
With Fewer Sales, Naming a Price Difficult In Today's Market

By Lauren Elkies, August 2008
When sales velocity is slow it can be difficult to accurately price a home.

Typically, real estate brokers look to comparable sales data, or comps, to find out what similar homes in the seller's building and neighborhood have sold for. But if there is a dearth of sales, as is the case now, the data becomes thin.

"We're in a whole new world. Pricing right now in this market is very hard," said Kathy Braddock, co-founder of real estate consulting firm Braddock + Purcell and the New York City real estate company Charles Rutenberg Realty.

Can a broker use closed sales from as far back as a year ago, which reflect deals negotiated before the credit market erupted? What about from six months ago, with those sales going to contract at the end of 2007 in the wake of the meltdown?

Some real estate experts are looking back even further to increase the reliability of their pricing, while others are focusing on current listings.

"We are using the same tools for comps, but also looking at how the prices are comparing to the previous one to two years," said Eddie Shapiro, president and CEO of Nest Seekers. "The idea is to try and identify inflated values as opposed to legitimate rates of appreciation — with all the relative considerations including location, neighborhood, exposure, presentation and condition."

In this market, Stacey Max, an executive vice president and sales manager at Bellmarc Realty's Downtown office, prefers to rely more heavily on listings currently on the market rather than older, completed sales.

"This reflects what the competition is for that property," Max said. "In the past, we used to be able to assume that we could get a higher price than the previous sale in any particular building, and right now that is no longer the case."

But not everyone agrees with that approach.

Jonathan Miller, president and CEO of appraisal company Miller Samuel, said that while the data set is smaller today, he prefers not to look at older data or depend more heavily on listings just to accumulate more data.

"We're spending more time trying to flesh out more recent data just because it's harder to obtain," Miller said. "We've noticed compared to last year, there are fewer sales. So it's more challenging."

By fleshing it out, Miller means talking to the parties involved in a previous sale, getting hold of the actual listing, verifying the square footage, and getting details about all of the amenities beyond what is on the listing.

In rare cases, where little information is available for computing comps, such as in the case of an unusual penthouse, Miller will look back even further.

Miller said his typical methodology includes looking at listings, contracts and closings over the last six months, with emphasis placed on the last month or two.

But relying on listings in this market tends to be less useful than it was a year ago, because "they're rising in number and the average marketing time is expanding," Miller said.

As listings increase, so does competition among sellers, making accurate pricing more critical to closing a transaction.

"It's more challenging now because of the uncertainty, and there's a lot of misinformation out there," Miller said. "National housing statistics have nothing to do with the local market."

As Noah Rosenblatt, a vice president at Halstead Property, pointed out on his site urbandigs.com at the end of June: "If you think you can fool a buyer into paying a 10 percent premium over 2007 comps, think again!"

Still, some real estate pros said they have not altered their approach to testing the market.

Andrew Gerringer, a managing director at Prudential Douglas Elliman who oversees new development marketing, said that his comps approach has not changed.

"The comps we are using are based upon closed sales and current contracts out in a particular market," Gerringer said. "However, this is no different than how we have always approached this." He noted that he uses comps from the past three to six months.

Frederick Peters, president of Warburg Realty Partnership, said he continues to focus on the here and now.

"I always tried to use very current comps," Peters said. "Even if you went back six months, the numbers were never good. Actually, nowadays the comps are easier to use, since we try to persuade sellers in most markets to peg their pricing to the last sale."

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THE REAL DEAL How Long Will Downturn Last? Imperiled Economy To Squelch Market Through 2009, Some Say By Alison Gregor, August 2008   The residential real estate market in New York City…... Read more >

THE REAL DEAL
How Long Will Downturn Last?

Imperiled Economy To Squelch Market Through 2009, Some Say

By Alison Gregor, August 2008

 
The residential real estate market in New York City is showing clear chinks in its armor. The average Manhattan apartment sales price in the second quarter fell for the first time since the fall of 2006, and some analysts expect the bumpy ride to be a rather long one.

"Manhattan held up better than most other places," said Mark Zandi, the chief economist and co-founder of Moody's Economy.com. "Long Island is being hit, as is Northern New Jersey. I do expect Manhattan's housing market to weaken measurably over the course of the coming year."

A combination of less demand, due to the lack of available credit for potential buyers, and more supply, due to a surge in foreclosures, has given the national housing market a wallop, he said. But the weak American dollar has spurred even stronger global demand for Manhattan apartments, propping up the local market.

However, dire predictions among financial analysts and fund managers of a European recession could weaken foreign demand considerably. And the hit being sustained by the financial services sector should make itself apparent in the coming months, Zandi said.

"The fallout from the problems on Wall Street is taking some time to manifest itself in the housing market, but it will as people lose their jobs and bonuses are significantly cut back," he said. "I expect that fallout to hit the Manhattan housing market later this year and in 2009."

As for the national housing market, Zandi, who recently published a book titled "Financial Shock: A 360° Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis," said he anticipated home prices bottoming in the summer of 2009 — by which time they will be 25 percent off their spring 2006 peak — with no appreciable gain in prices for another year.

"It won't be until well into the next decade that we start to experience measurable price growth," he said.

Other analysts agree with that national perspective. Paul Krugman, writing in the New York Times, has said U.S. home prices have fallen 17 percent in the past year, and probably still have "a long way to fall," such that the housing slump may continue to 2010 or later.

Other analysts in New York City, such as the appraiser Jonathan Miller, the president of Miller Samuel, expect a rut in the Manhattan housing market, including a drop in prices, and suggest it will last into 2009 and beyond.

Frederick Peters, the president of Warburg Realty Partnership, a residential brokerage firm, said any slowdown in the Manhattan market that might occur is pinned to the credit crisis.

"In June, Federal Reserve Chairman Ben Bernanke was commenting that he thought the worst of the credit crisis was behind us, but July has clearly proved that that's not the case," Peters said. "And in fact, [August is] the anniversary of when this all kind of hit the fan.

"What I'm saying to my brokers is that the national economy is probably going to be very challenging, and credit issues are probably going to still have an impact on buyers' psychology through the balance of 2008 and the first quarter of 2009."

Peters was careful to say that any downturn he has seen in the Manhattan housing market has been in sales volume, not in pricing. According to Prudential Douglas Elliman Real Estate's second-quarter Manhattan market overview, there were 3,081 sales in the second quarter of 2008, which was down 21.8 percent from the 3,939 sales seen in the prior-year quarter.

"In this case, we've experienced a volume downturn, for sure," Peters said. "One has to be much more specific in parsing prices."

He said the length of time that apartments are staying on the market has grown, which will increase pressure to lower prices. According to the Douglas Elliman report, Manhattan apartments stayed on the market an average of 135 days, an increase of 15 percent from 117 days in the prior-year quarter.

"For a number of years, we had a marketplace in which many listings typically remained on the market for two weeks," he said. "We're not seeing much of that any more. Everything is on the market for months. Obviously, that creates a deeper inventory pool in many marketplaces, which then brings price pressure to bear."

There is price pressure, especially on smaller units, which is being offset by price increases on larger, luxury apartments, Peters said.

"There's downward price pressure probably on the Upper East Side east of Third Avenue," he said. "Also, in certain parts of Tribeca, where there's been a lot of new development. Certainly, there's been some price pressure in new development in Harlem."

Luigi Rosabianca, a managing member of the law firm Rosabianca & Associates, said developers will do anything to keep from cutting prices, even agreeing to hold the note for those who can't obtain mortgages. Still, he said he anticipates a "natural correction" to the Manhattan housing market to the tune of a 5 to 10 percent price decrease.

"Things did go a little haywire, so if there's a natural correction, maybe that's healthy for the market," Rosabianca said. In terms of sales volume, he said, "I think we'll see this summer being quite quiet, and you may have gradual improvement over the fall and winter. And then we'll see a spurt in sales next spring."

But Rosabianca pointed out that the elections this fall may also play a role in spurring the economy, which could boost the housing market.

"It's amazing what elections do to an economy," he said.

Stuart Saft, a real estate partner at the law firm Dewey & LeBoeuf, said he has not seen a price cutting thus far among developer clients, largely because many canceled or postponed development plans two years ago.

"A lot of developers, when they saw the market starting to soften two years ago, pulled out and decided to wait," Saft said. "So we never had that kind of excessive development that exists in other parts of the country."

Still, Saft said the residential real estate market "will soften and probably continue to soften through the end of the year."

Even if some developers postponed their plans, there were enough projects that went forward to keep at least one business watching. Philadelphia-based Korman Communities owns four AKA properties, which specialize in extended-stay lodging converted from failed condominium projects. It aims to add as many as a dozen more properties in the next five years, said co-president Brad Korman.

"We are starting to see some incredible opportunities for growth," he said. "Buildings that broke ground 18 to 24 months ago are starting to come online, and owners that are very nervous are starting a sales effort in this market."

While the residential market downturn is more a reflection of the credit crisis than market fundamentals, that could change if the banking industry is further weakened, leading to further loss of consumer confidence, he said.

"Nobody is certain where the bottom of the market is, and everyone is afraid of paying too much in a falling market," Korman said. "This attitude will keep velocity down just as many new condo projects are starting their sales effort."

Korman predicted that while international buyers will continue to fuel the luxury apartment market, the mid-priced sector will need 50 percent more time than expected to sell its inventory. The real exposure in Manhattan will be Downtown in the Financial District, where a price drop is almost inevitable.

"The Financial District was solid in selling condos in the $700- to $900-per-foot range," Korman said. "Too many new buildings came online trying to sell at $950 to $1,300 per foot. When the investment banks stopped the bonuses, these buildings lost the majority of their buyers. I think these buildings will have to rely on foreign purchasers, and I believe prices will come down to compensate for the location."

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THE REAL DEAL Summer Sales Slower Than Usual Price Cuts Increase, Signaling Weakening Residential Housing Market By Lauren Elkies, August 2008 July was hot, and buyers were not bothered –…... Read more >

THE REAL DEAL
Summer Sales Slower Than Usual
Price Cuts Increase, Signaling Weakening Residential Housing Market

By Lauren Elkies, August 2008
July was hot, and buyers were not bothered – at least when it came to buying Manhattan real estate.

Open house attendance was down, beyond the usual summer ebb, and price adjustments were more frequent — both indicators of a weakened housing market.

Richard Rothbloom, a vice president at Brown Harris Stevens, said that his sales open house attendance last month was "hit or miss."

Stefani Pace, an associate broker at Prudential Douglas Elliman, said that appropriately priced units are garnering heavy traffic at sales open houses, but if they are even "just a little overpriced," attendance drops off.

At Barak Realty's Sunday open houses, there was an average of 6.7 visitors in July versus 7.4 in June. Barak Dunayer, the company's president, said that the drop in the number of house-hunters as well as the increase in the number of price cuts reflect the soft market.

Crowded open houses usually mean a property will sell quickly, said Frederick Peters, president of Warburg Realty Partnership, adding that he does not know if the reverse holds true — that a sparsely attended open house translates into a property that sells slowly.

On the rental side, open houses were doing poorly last month.

"Rental open houses are dead," Pace said. (For a different take on open houses for rentals, see story on page 82.)

Lesley Steiner, associate broker at Century 21 NY Metro, echoed Pace's comment.

"There are [fewer] people coming to rental open houses, and in some cases no one shows up," Steiner said.

Apartments have been languishing on the market, but some brokers say that price slashing seems to be effective at increasing buyer and renter interest.

Esther Sapan, a rental salesperson at Adina Equities, said that while the rental market was busier in July, rents were reduced both months to get deals done.

On the sales side, "some apartments are still sitting, but as you do incremental price drops, more buyers come out to look at it," Brown Harris Steven's Rothbloom said.

The discount off the asking price that buyers are getting from sellers has increased. Between the first and second quarters of 2008, the spread between list price and final selling price grew to 3.6 percent from 3.2 percent, according to data prepared by appraiser Miller Samuel for Prudential Douglas Elliman. In the second quarter of 2007, the discount was only 2.2 percent.

Jonathan Miller, president and CEO of Miller Samuel, said the expanding spread does not necessarily mean that price drops were greater. It could be that list prices rose faster than sales prices did. "Either way," Miller said, "it shows a widening gap between buyer and seller."

Ari Harkov, an associate broker with Halstead Property, said, "Properties are still trading, some immediately after coming onto the market and some at full asking or even above, but I think price sensitivity is increasing. This is leading to a larger percentage of properties sitting on the market that may not sell at all or will only sell after several months on the market and several price reductions."

Sha Dinour, president of Triumph Property Group, estimated in mid-July that apartments were sitting on the market 10 to 15 percent longer in July than in June. Second-quarter market reports for Manhattan showed that year-over-year, inventory shot up and sales activity slowed, but home prices still hit record highs. Sales at the high-end 15 Central Park West and the Plaza Hotel, which were negotiated in the first quarter of the year if not before, skewed the numbers.

Looking at just the tail end of the second quarter, only May and June, the last two-month period for which data was available, sales picked up by 12.5 percent to 1,204 sales, according to data from a report by Terra Holdings, parent company of Brown Harris Stevens and Halstead Property. The median sales price receded between the two months by less than 1 percent to $960,000, Terra Holdings determined.

Market takes hit, brokers adjust

As the middle market suffers and buyers demand greater price cuts, brokers are adjusting their approach to keep up with changing market conditions.

The Real Deal sent out its monthly survey to see what some brokers had to say about what they are seeing in the field. Here is a sampling:

Stefani Pace, associate broker at Prudential Douglas Elliman: The middle co-op market is where I am seeing the biggest slowdown. Many of my customers are putting their search on hold and my clients are getting frustrated.

Khashy Eyn, president and CEO of Platinum Properties: If you list a $5 million-plus home, you know that there is a scarcity of homes in this category, and you'll ultimately find an affluent individual willing to spend that amount. What seems to linger on the market the longest are the listings that have 100 other listings or so in the same category — for example, one-bedrooms under $1 million in Midtown.

Steen Rasmussen, senior vice president and sales manager, Warburg Realty Partnership: Brokers are revising and improving their business and marketing plans and preparing themselves for a bumpy six to nine months ahead. They are adjusting to the new pace of the market, which requires more patience working with both buyers and sellers.

JoAnn Schwimmer, sales agent, DJK Residential: The renters [were] back in the Manhattan residential market in July. Buyers are also out there and looking for drastic price reductions as a result of the negative national news, but the New York City market is very strong. Higher-end properties have dropped slightly, but the mid-market prices are steady.

Ken Scheff, managing director, Stribling & Associates: Some buyers of smaller apartments are being affected by tighter financing guidelines.

Cindy Gise, vice president, Prudential Douglas Elliman: I think we have to be tougher and need to tell sellers they need to be realistic if they are serious. Screening buyers is a must and something you need to do from the beginning of your buyer/broker interaction.

Sha Dinour, president, Triumph Property Group: I think no one is denying the slowdown, and we are all just grateful to move our inventory. I think appointments and accommodations by other brokers have improved.

Edward Longley, senior vice president, City Connections Realty: As of this point I have not seen any drastic changes. I am spending a little more time finishing my doctorate, playing with my daughter and so forth, but I think that is just a seasonal thing.

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THE REAL DEAL This Time, Inflation May Have Different Impact By Alison Gregor, August 2008   Reports that consumer prices spiked 1.1 percent in June raise the issue of inflation, which…... Read more >

THE REAL DEAL
This Time, Inflation May Have Different Impact

By Alison Gregor, August 2008

 
Reports that consumer prices spiked 1.1 percent in June raise the issue of inflation, which has in the past been advantageous to real estate investors. In the current state of the market, it's not clear if rising inflation will end up being a boon or a burden on top of the credit crisis.

During the inflationary periods of the 1970s and 1980s, many investors who held real estate made out reasonably well, reinforcing the idea that real estate is a good investment for bad times.

"A lot of people buy real estate during inflationary times with the idea that it would be a hedge against inflation," said Robert Stella, an executive vice president and principal at Cresa Partners, a commercial real estate brokerage. "Say it cost you $1,000 to build a building. If inflation goes up 10 percent, your building's probably going to be worth at least 10 percent more, or $1,100, so that's good."

Inflation is often thought of as a beneficial phenomenon for real estate investors, agreed Jim Frederick, an executive managing director and principal at Colliers ABR, a commercial real estate services company.

"Hard assets are always more attractive in inflationary times," Frederick said.

Since inflation, in a sense, can add equity to a building, it can effectively take a bite out of the building's debt, Stuart Saft, a real estate partner at law firm Dewey & LeBoeuf, said.

"Credit is more significant in real estate than any other aspect of the economy, because real estate is basically an illiquid investment," Saft said. "Having a period of inflation, if you're a real estate owner or lender, solves the credit problem, because suddenly, the value of the asset can be in excess of the amount of debt that's on the asset."

However, real estate investors in today's market face other pressures that make it less advantageous to own real estate now. First of all, the absence of cheap and easy financing makes it difficult to sell a building and reap any immediate benefits from inflation, Stella said.

"If people aren't buying your building because they can't finance it, the value is only a paper value," he said. "That's a new twist that could create some issues for an investor trying to hedge, because if you want to sell it, there may not be many buyers — at least until this credit crisis plays out."

Paul Fried, a principal at AFC Realty Capital, a national boutique investment bank, said real estate might be a hedge in inflationary environments — as long as it's not the sector that went through the inflationary period.

"Normally, you would think it would be good to hold real estate in an inflationary period, but you're assuming real estate is not the asset that's in the inflationary cycle," he said. "Right now, real estate values are at historical highs as a result of going through an inflationary cycle caused by cheap monetary policy."
The Federal Reserve's reaction to inflation may also determine whether or not real estate investors thrive, or have to struggle to survive. The Fed could decide to increase interest rates.

"What matters to real estate is the real interest rate, which is the nominal interest rate minus inflation," said Mark Zandi, the chief economist and co-founder of Moody's Economy.com.

"If you have an acceleration of inflation and interest rates don't rise, i.e. if the Federal Reserve doesn't tighten policy, then generally, it's good for real estate," he said. "If conversely, though, inflation rises and the Federal Reserve tightens policy, and real rates increase, that's bad for real estate."

Zandi said he believes the latter is more likely, with the federal government sacrificing the economy to achieve the goal of stable inflation.

"In the 1970s and early 1980s, inflation increased, but the Federal Reserve did not raise interest rates, so real rates went negative, which was good for real estate," he said. "That won't happen this go-around."

Saft agreed with Zandi, asserting that officials in the Federal Reserve, which had been gradually cutting interest rates to aid the struggling housing market, will worry that investors will shift their capital from U.S. securities markets to other markets where they can get a higher return. The federal government will raise interest rates to attempt to make the U.S. securities market more competitive.

"That's where the real pressure on the Federal Reserve to raise interest rates is going to come from," he said, adding that it will have a devastating effect on the housing market. "Raising interest rates will make the dollar more competitive as an investment, but on the other hand, it's going to trigger more defaults here in the U.S.," he said.

Fried said that if Federal Reserve officials raise interest rates, it will be a "double whammy" to real estate values.

"You know they've got to be struggling with this, because the instinct is to raise rates, because that is better for monetary policy," he said. "If they do raise rates, you're really going to get squeezed in terms of tightened underwriting standards along with the increased cost of capital.

"So does it feel like real estate is a hedge?" Fried continued. "The answer is 'no.' Don't argue with your gut on this one."

Still, Fried said, while real estate as a sector may be hurt by increased interest rates, individual assets with either solid fundamentals or strong cash-flow that are being held in the longer term should be "reasonable places to be."

But real estate owners with floating interest rates — for instance those who took out short-term loans 18 months to three years ago to purchase transitional buildings with a vision of turning them around — may end up losing their properties if the Federal Reserve raises interest rates, Fried said.

Frederick said he thinks the Federal Reserve will be sensitive to the credit problems plaguing the real estate market and forego raising interest rates.

"I don't think the Fed will be able to raise rates any time soon because of the continuing banking turmoil and most recently the issues with Fannie and Freddie," he said.

Frederick Peters, the president of Warburg Realty Partnership, a residential brokerage firm, said the looming problem for the mortgage market is not simply more conservative underwriting standards, but a shortage of capital altogether. For that reason, the Federal Reserve won't raise interest rates.

"On the one hand, you have an economy that's not zippy, and which to some degree is being stifled by the general lack of credit," he said. "On the other hand, you have this threat of inflation.

"Ordinarily, you'd try to pump energy into the first problem by lowering rates," Peters said. "And ordinarily, you'd try to manage the second problem by raising them. So my guess is, at least for the time being, [Federal Reserve Chairman Ben] Bernanke's not going to do anything."

In the meantime, price inflation caused by more expensive petrol-based construction materials, along with increased global competition, will make new real estate development less feasible, he said.

And as the rate of inflation increases, the value of payments on longer-term debt decays. Yet many New York City residents are protected simply because the large number of co-ops in the city means many people are no more than 75 percent financed. Still, depending on what happens with real wages, homeowners will most likely pay a larger chunk of their income toward common charges.

In the commercial market, there's an air of uncertainty because costs are going up due to inflation for both tenants and landlords, said Abraham Hidary, the president of Hidrock Realty, which is a commercial real estate services firm that also serves as a landlord. Landlords often tend to shift excess costs to tenants.

"Tenants are being squeezed, so they are avoiding signing long-term commitments right now; they're waiting until the last possible second to sign a lease extension or to move," Hidary said. "And if they do have to sign a lease, they're keeping it as short as possible — a five- or seven-year lease versus a 10-year lease.

"And if they do have to move, they'd rather be in a quality building a little bit off location to keep their rent down."

 

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SHOULD ALL CO-OP APPLICATIONS BE THE SAME? By Lauren Elkies, June 2008 It's a process that can be a veritable nightmare: getting a mortgage loan approved, supplying personal information, preparing financial…... Read more >

SHOULD ALL CO-OP APPLICATIONS BE THE SAME?

By Lauren Elkies, June 2008

It's a process that can be a veritable nightmare: getting a mortgage loan approved, supplying personal information, preparing financial documents, acquiring reference letters, undergoing credit checks and finally, making numerous collated copies of the package for review by the property manager and co-op board — and all that's before the fateful interview.

Besides being extensive and intricate, co-op board applications are not uniform, and with roughly 2,500 co-op buildings in Manhattan alone, that can amount to a lot of different variations. Now even condos have become fussier, with applications similar to those required at co-ops.

Some real estate pros think the co-op application process could be simplified with a standardized application. The topic was addressed at a recent meeting of the Real Estate Board of New York sales council, a group of brokers who liaise between REBNY and its member brokers. Alan Pfeifer, a senior vice president at Halstead Property and co-chair of REBNY's sales council, said the group decided at its May meeting to form a subcommittee that will work on the uniform application in September, when the council reconvenes.

Proponents of a standard form say that it could make matters simpler for managing agents, who oversee the building's day-to-day maintenance and finances, and for buyers and their brokers, who would know from the get-go what the board was looking for. Opponents say that managing agents are lame ducks, so their preferences are irrelevant, and since all co-op boards basically ask for the same information, brokers should know how to prepare their buyers. In addition, a uniform application does not work for boards seeking additional information.

Anthony Miller, a vice president at Bellmarc Realty who initially raised the standardization issue at a previous sales council meeting, said, "I got sick and tired of board packages that maybe don't serve the interests of the boards nor the managing agents and can drive both buyers, sellers and brokers absolutely crazy.

"Miller said that he recently helped a couple prepare the financials for an application to a co-op. The board wanted the assets to be divided between the husband and wife.

"This doesn't really help matters because in no case did it show what the combined assets were," he said. "That's an example of a bad format. It makes the asset total look weaker than it actually is."

Miller said that a standard form could be used on a voluntary basis, and buildings would be able to customize it with a "rider or an addendum to the application."

Not everyone thinks uniformity is a good thing.

Arthur Weinstein, vice president of the Council of New York Cooperatives & Condominiums, a not-for-profit organization for housing cooperatives and condominiums in the New York area, and a real estate attorney, thinks standardizing the forms is a "terrible idea." He added, "It's a stupid idea because each building has its own concerns."

One building with porous interior walls that he represents asks on the application about smoking habits because many of the building's residents are asthmatics who cannot have smokers dwelling in the building.

"Other buildings wouldn't care less about smoking," Weinstein said.

So long as it's legal, "the whole point of the matter is to live in a co-op, you should be able to pick who your neighbors are going to be," Weinstein said.

Still, a voluntary standard form could be a decent idea, he acknowledged, and a good jumping-off point.

But as private corporations with total autonomy, many co-op boards would be opposed to the new approach, he said.

Frederick Peters, president of Warburg Realty Partnership, said that while managing agents might be amenable to using a standard board package, the boards would not be because "they're not going to want some outside body telling them what to do. They want the autonomy."

Some buildings are more interested in social issues than others, with questions about a would-be buyer's friends and organization memberships. Other buildings emphasize more rigorous background checks. Still others want to know about pet ownership and subletting.

Kathy Braddock, co-founder of real estate consulting firm Braddock + Purcell and the New York City real estate company Charles Rutenberg Realty, said that there is no way a co-op board is going to agree to use a standard form.

Besides, the application isn't the issue since they all pretty much ask for the same information. Preparing a successful package is more about what's not in the application.

"It's not what you need; it's how it's presented, how it's tweaked," she said.

An application may ask who will be residing in an apartment, for example, but only someone familiar with a specific board would know that the board only approves couples with a maximum of two children. Or, a board may specify the number of references on the application, but only someone knowledgeable about the building would know its board only accepts written references.

Managing agents often run a number of buildings, and a uniform application would make their lives easier.
Donna Weinberg, a management executive at Lawrence Properties, a residential management and brokerage firm, said she thinks a standard form would be "great." The applications at the company's 60 residential buildings, 95 percent of which are co-ops, all have the same financial and reference requirements, but some of the building's house rules may be different, Weinberg said.

Anita Sapirman, founder and president of Saparn Realty, a residential management firm, said that she uses a standard application but alters it to suit each building.

"Usually, you can have one that is fairly standardized and then try to accommodate that particular board, adding some little item that they may want," Sapirman said. She uses a uniform rental application.

"For me, it's a great idea. I love that it would be one standardized form. It just makes it simpler for my staff to go to the board and say, 'Here's the application; let's use this,'" Sapirman said.

Neil Binder, principal of Bellmarc Realty, which has a property management arm in addition to its main business, residential brokerage, said he would not support standardizing co-op applications.

"Different buildings have different criteria that they feel are pertinent to their evaluation search. There is already a number of 'standard forms' including those proposed by Bellmarc," Binder said. "Invariably, boards have objections to these forms and wish to have additional elements added."

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REBNY gala lifts spirits amid gloomy financial news By Jen Benepe - The Real Deal Thousands of who's who in New York real estate descended on the Hilton Hotel on January 17 to commemorate…... Read more >

REBNY gala lifts spirits amid gloomy financial news
By Jen Benepe - The Real Deal

Thousands of who's who in New York real estate descended on the Hilton Hotel on January 17 to commemorate the Real Estate Board of New York's 112th anniversary. An exclusive, invitation-only cocktail party started off a night of industry power brokers mingling with politic bigwigs, including a parade of the 2009 mayoral candidates.

Tickets to the event were $900 each and the crowd was suitably dressed to impress, creating a sea of tuxedos dotted with the occasional elegant gown, like the navy Armani worn by Faith Hope Consolo. But the mood was somber at moments.

The gala took place the same day that Merrill Lynch announced its worst earnings quarter in four years, and days after Citigroup announced a jaw-dropping fourth-quarter loss of $9.83 billion, adding more fuel to worsening fears that the mortgage meltdown has triggered a recession that will hurt real estate sales, even in the so-called "insulated" New York City market.

"Sales will be leveling off," said Frederick Peters, president of Warburg Realty, on line to check his coat. "The first two quarters won't be so good, and prices may be down."

"This is an interesting time to have the event," said a commercial real estate finance executive. "No one is smiling except the Goldman [Sachs] guys—or it's the alcohol," he noted. He declined to be identified because he works for a major firm that” got burned" this year.

A sampling of big real estate players on hand included: Bob Knakal, chairman of Massey Knakal; Sandy Lindenbaum, of Kramer, Levin, Naftalis, and Frankel; Douglas Durst; Jon Mechanic of Fried, Frank, Harris, who received the Kenneth R. Gerrety Humanitarian Award; Francis Greenburger, CEO of Time Equities Inc.; Mark Shaw, executive vice president for strategic planning at Extell Development Co.; Darren Hornig, Dwelling Quest's founder; Pam Liebman, president of the Corcoran Group; Jerry and Rob Speyer of Tishman Speyer; and Bruce Mosler, CEO of Cushman & Wakefield and recipient of the Louis Smadbeck broker recognition award.

A perennial observation about awards ceremonies: Attendees often pay little attention to them, even though they pull out all the stops to be there. In this case, officials on the dais as usual tried in vain to shush the talkers in the crowd, to little avail.

But more difficult to talk over was New York City council member Melinda Katz's rendition of "America the Beautiful," proving that patriotism trumps bad manners.

Still, the country's economic health was clearly on the minds of the guests.

David Baxter, a member of the Cushman & Wakefield team that sold 666 Fifth Avenue in December 2006 for $1.8 billion, the highest amount ever paid for a single building in the U.S, said he is "cautiously optimistic," about next year.

"Pricing is off 5 to 10 percent, depending on the area," he said. Nevertheless, he added: "there is still tremendous demand."

Bob Knakal said he thinks the devalued dollar will continue to help New York real estate in the coming year. "People are talking about deals," he noted.

When asked to comment on the economic outlook for 2008, Steve Ross, chairman of the Related Companies, said, "I have two words for 2008: troubled waters."

Joseph Moinian, who was with his tall son Mitchell Moinian (his second eldest, and a sophomore at New York University) said, "It's going to be a great year for the Moinian Group."

Is he poised to buy while everyone else loses their buildings? "For the right situation, yes," Moinian said. "But while all the other diehards are busy getting their act together, we're delivering amazing product to the market, like the W Hotel, and Atelier," he said.

"It's still early in the game to predict, and there has been no slowdown in leasing activity," said William Rudin, president of Rudin Management. "Things went up too fast and too quickly," he said of the last few years. The current market is more realistic, with more appropriate lending standards. 'We don't overleverage as a company," he noted.

Will he capitalize on some of the fire sales coming up in 2008? Rudin is less likely to go after a building with a "5 to 6 percent cap [rate]," he said. By contrast, his St. Vincent's development in the West Village is a "long-term play that has complexity," he noted.

"From a broker's perspective, [the declining economy means] they're going to need us now more than ever," said Lisa Maysonet, senior vice president at Prudential Douglas Elliman. "Before, the properties would almost sell themselves, but now you need real deal makers."

Tamir Shemesh, a managing director at Elliman, said he is still bullish on 2008.
He noted that despite the talk, overall bonuses on Wall Street surpassed total 2006 bonuses at the biggest investment banks, and foreign money continues to drive business. "We lost a bidding war with a buyer from Spain" for a $2.3 million property, he noted.

Edward Andron of Leebar Management, a building management company, said the coming year was going to include "a budget crunch, and a tightening of our belts." The net effect: "There will be a lot more for foreigners to snap up, but it will also be more competitive."

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FINDING BRIGHT SIDE OF A DOWNTURN February 2008 THE REAL DEAL Falling Wall Street bonuses and fears of a nationwide recession may affect demand for Manhattan homes, but local market watchdogs…... Read more >

FINDING BRIGHT SIDE OF A DOWNTURN
February 2008 THE REAL DEAL

Falling Wall Street bonuses and fears of a nationwide recession may affect demand for Manhattan homes, but local market watchdogs maintain, albeit cautiously, that Manhattan real estate is still a solid investment.

"Quite obviously, if the country goes into a recession, New York City real estate would logically be affected," said Elizabeth Stribling, president of Stribling & Associates. "That said, the perception that real estate in New York City is a better investment than placing money in the stock market continues to be a stated reason for buying for many of our customers."

Naturally, lower bonuses and record losses among some of the largest companies will temper activity, particularly among those dependent on their bonus to purchase an apartment. But bonuses still ranked the second highest since at least 1985, at $33.2 billion or an average of $180,420 a person, according to data from the state comptroller.

They are "still very hefty numbers," said Diane Levine, brokerage manager of the downtown office of Sotheby's International Realty. The "market in New York City is still active."

Frederick Peters, president of Warburg Realty Partnership, was more circumspect.

"We have so far not seen much change one way or another in the marketplace," Peters said. "Clearly, there has been a large injection of capital into the portfolios of many in the financial industry. There is of course some offset of apprehension about the fear of recession and the continued weakness in the national housing market. For the moment, these two forces seem to be holding one another at bay."

If the country sank into a recession, it would take time for the effects to take hold of Manhattan's residential real estate market.

"How much time would really depend on how deep the recession goes," said Gregory Heym, executive vice president and chief economist at Terra Holdings, parent company of Brown Harris Stevens and Halstead. "You have to remember that homes are not like stocks; their prices can't move as fast. The concern over the next few months will be the effect of a possible recession on buyer confidence."

And looking further out, there's unease over what bonus payouts will be next year.

On the surface, sales in December ended with a bang, but the data, the most recent available at press time, were skewed by a spike in closings in new developments fetching eyebrow-raising prices.

The number of co-op, condo and cond-op unit sales in Manhattan increased to 779 in December from 720 in November, according to research by Heym of Terra Holdings. The median sales price increased in December to $928,378 from $836,250 in November.

"The rise in price, and to a lesser extent, sales, can be attributed to 15 CPW, which had more closings in December than November," Heym said. "Also, there were closings at the new development 823 Park Avenue, four of which were for over $10 million. Forty-five Park Avenue also had a lot more closings in December. So, basically I'd attribute both increases to new developments."

December saw a drop in inventory, consistent with years past. Inventory fell to 5,415 from November's 5,677, according to data from Jonathan Miller, executive vice president and director of research for Radar Logic. Sellers typically take their homes off the market in order to re-list them in the stronger spring market.

While brokers said that the sales market is chugging along with buyers who can withstand greater loan scrutiny, the rental market seems to be taking a big hit, though December data from Citi Habitats show that rents averaged $5.25 more in December from November to $3,219.

"Even with less rental buildings being constructed, the lack of demand is almost unprecedented in my 35 years in the business," said Marc Lewis, COO of Century 21 NY Metro.

"Landlords, across the board, are reporting this, and only the ones who sharpen their pencils and reduce rents, pay fees or offer other incentives are rapidly renting their units," he said.

He forewarned, "The market is returning to where it was during the recession of 2001."

Effects of the credit crisis could be more apparent in Manhattan this quarter than the third and fourth quarters of last year, since closings in the first three months of the year would likely reflect deals from the latter part of last year, following the eruption of the credit market.

In terms of current activity level, this month will be telling since generally there is a burst of contract activity at the end of February, Miller said.

"That's something to look for as an early warning sign of what's going on," he added.

Residential brokers sound off

With bonuses dropping, companies suffering record losses and fears of a recession looming, it's hard to ascertain what is going on in the real estate market. To get a handle on market conditions, The Real Deal recruited real estate pros last month to give their opinions on which way the market is headed.

Rick Pretsfelder partner, Leslie J. Garfield & Co.
While bonuses overall are down 4.7 percent, the composition of the bonuses (i.e., more stock than cash in some cases) is also an important factor. We don't expect a huge impact in the immediate term, but if there is a sense that bonuses will be down again in 2008, then the real estate market may take a hit.

Mike Simon president, Century 21 NY Metro
The rental market is getting off to a slow start with a tremendous amount of inventory, some of which has been sitting around not being rented for a few months. Some owners are having trouble adjusting, and this is clogging up the market as others are reducing rents, paying fees or giving away free time as an inducement for clients to take their units.

Gil Neary president, DG Neary Realty
There will be more activity, but people, as opposed to last year, will be a little more cautious about how they spend their money – looking for better value, perhaps.

Frederick Peters president, Warburg Realty Partnership
There is no sign and no anticipation of an increase in prices, nor does there seem to be a decline in absorption or a decrease in prices.

Michele Kleier president and chairman, Gumley Haft Kleier
Everybody wants a piece of New York. I don't think people who get smaller bonuses are going to move out to the suburbs. … People with lower bonuses may be going from buying a $9 [million] to buying a $7 [million] apartment.

Toni Haber executive vice president, Prudential Douglas Elliman
Probably if you bought a year ago and you're selling now, if you include closing costs from before, you may not come out in the positive. Appreciation is not as great, unless it's 15 Central Park West.

Lisa Lippman senior vice president, Brown Harris Stevens
It is still a seller's market if someone bought more than two years ago. It's easier for buyers to buy now than it had been, but still there are more buyers than good inventory.

Sha Dinour president, Triumph Property Group
Anyone transitioning from a rental to a purchase can find good deals in comparison to a rental scenario. Anyone in need of selling a property to upgrade or downgrade for another property is experiencing a much more difficult time.

Eddie Shapiro CEO, Nest Seekers International
Some buyers are actually under the illusion that if they wait a little [while], prices will come down; not going to happen. … New fed programs, including tax rebates and massive interest rate reductions should fuel confidence again.

Klara Madlin president, Klara Madlin Real Estate
In the last five years, people have grown to expect sales with bidding wars and double-digit appreciation. This year will return to more normal housing conditions, single-digit appreciation and a six-month turnaround on sales.

Robin Schneiderman vice president, Citi Habitats
New buildings or condo conversions with high common charges will be the first to slow down. People are concerned about overall costs and are looking at these charges more carefully.

Compiled by Lauren Elkies

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December 2007 After slow fall, inventory starts to grow Will lower bonuses make the traditionally slow fourth quarter even slower? By Lauren Elkies It's a simple real estate equation: Sales go down, inventory…... Read more >

December 2007

After slow fall, inventory starts to grow

Will lower bonuses make the traditionally slow fourth quarter even slower?
By Lauren Elkies

It's a simple real estate equation: Sales go down, inventory piles up and prices start dropping.

That's what's been going on in Manhattan's residential real estate market, and more of the same is on the way as deals made in the wake of the credit crisis come to a close.

"August and September were bad. If I had a weak August and September, collections will be weak in December and January," said Neil Binder, principal and co-founder of Bellmarc Realty. "Most firms will have to go into reserves to keep the show on the road" those two months.

"The month of October was fine, nothing special, nothing terrible. It was just OK. This particular month looks similar," Binder said in late November.

Add to that the post-Thanksgiving market slowdown, the traditionally weak fourth quarter and uncertainty about bonus payouts. Some news reports have said bonuses are expected to be flat to down 15 percent compared to last year. Bonus payouts are predicted to vary by different sectors within banks more than most years, because some divisions like stock trading and investment banking did well, while areas the with most exposure to the mortgage fallout did poorly.

"If there is a significant bonus payout, you see a pickup in activity in the last few weeks of December. I would suggest you won't see as much of that this December, because the expectation is that bonuses will be lower than last year," said appraiser Jonathan Miller, executive vice president and director of research for Radar Logic.

Although New York's market is faring better than markets in the rest of the country, October data, the most recent available at press time, showed a less than rosy picture.

The number of co-op, condo and cond-op unit sales in Manhattan dropped 11.5 percent to 1,048 from 1,184 between September and October, according to research by Gregory Heym, chief economist at Terra Holdings, parent company of Brown Harris Stevens and Halstead. There was a slightly more dramatic drop -- 13.7 percent -- year over year, when there were 1,215 sales.

Manhattan condo, co-op and townhouse inventory was up in October from September. The number of available homes rose 4.2 percent to 5,721 in October from 5,490 a month earlier, Miller said. Barak Dunayer, president and founder of Barak Realty, shrugged off the increase, saying, "What's the big news? A tiny 4 percent increase in inventory?"

Each building class saw an uptick. There were 2,522 co-ops, 2,900 condos and 299 townhouses on the market in October, up from 2,472 co-ops, 2,732 condos and 286 townhouses a month earlier.

Though telling, the numbers are not completely atypical.

"I would suggest it's not unusual to see inventory rise somewhat in October, but this would suggest a weaker level of demand," Miller said. Last year, however, listings did not actually rise between September and October. Indeed, they shrunk 9.5 percent to 7,350 from 8,118.

In addition to a rise in inventory, the median home price fell 3 percent in the borough between September and October 2007 to $800,000 from $825,000, Heym of Terra Holdings found.

On the rental side, market assessments were varied.

"The prices of the rentals are down. For $3,500 rentals, we can't get $3,000," Binder said. "I think that there are just a lot of people that are uncertain that are not moving."

October's vacancy increased to 1.13 percent from 1 percent in September, 0.85 percent in August and 0.81 percent in July, Citi Habitats numbers show (see Rental market shows some signs of weakness and In a rental town, vacancy numbers stir debate).

Anecdotally, some real estate pros said the sales business was going strong last month, although buyers still need some handholding in following the credit crisis.

"I'm not the cock-eyed optimist but I'm basing it on what I see now," said Paul Purcell, co-founder of real estate consulting firm Braddock + Purcell.

Leonard Steinberg, an executive vice president at Prudential Douglas Elliman, said that he expects business to "be slow through December" and "pick up in January, not at the same level of previous years though." He added that "buyers and sellers are cautious right now. This is a bit of a 'wait and see' market. That always changes sooner of later."

Sounding off from the trenches
To keep our finger on the pulse of the Manhattan residential real estate market, The Real Deal sent out a survey last month to key players in the industry, asking them to weigh in on the current climate. Some excerpts:

Shai Shustik CEO and founder, Manhattan Residential
There has definitely been a slowdown for the average cookie-cutter unit. People are looking for deals and taking longer to execute. Units that are priced as if we were in 2005 are not moving and just flooding the market with unsold statistics.

Frederick Peters president, Warburg Realty Partnership
There are few bidding wars, and when they do occur it is only on very well-priced properties. Even then, things are not going much over the asking price and there may be two or three bidders, not six or eight. Almost nothing is sold anymore in a week or two.

Kathy Braddock co-founder, Braddock + Purcell, and Charles Rutenberg Realty
The most positive trend in the market right now is that the mortgage problem and the media have not deterred our market. The most negative is that it is still hard for first-time buyers to acquire the liquid assets that they need.

Diane Levine brokerage manager of the Downtown office, Sotheby's International Realty
Certain sellers are still attempting to push beyond the value of their property. Correctly priced properties are moving. And, those attending open houses tend to be "real" buyers.

Gordon Golub senior managing director, Citi Habitats
Studios as well as larger units (1,600- to 2,200-square-foot two-bedrooms and three-bedrooms) are being absorbed very rapidly, while one-bedrooms are taking longer to go to contract.

Barak Dunayer president and founder, Barak Realty
Overall, the attendance at open houses has been steady. The only noticeable difference is that buyers stay away from undesirable properties. I still remember the times that people bought any hole in the wall.

David Schlamm president, City Connections Realty
The rental market actually slowed down a lot earlier than in previous years. This year we felt it slow down in the beginning of October, where traditionally it really slows down closer to Thanksgiving.

Brian Huang sales manager, City Connections Realty
The overall market has strength in prime locations, but we are seeing some negotiability in "up-and-coming" areas. We've also had more interest in larger apartments than last year.

Jonathan Miller director of research, Radar Logic
There is modest appreciation based on median sale price, a relatively tight listing discount and the normal number of days on market so buyers and sellers seem to be in sync.

Because of all the turmoil on Wall Street and the discussion of lower bonuses, we're expecting to see an expansion of marketing times and some cooling off of the elevated activity. But, we're still seeing a lot of activity.

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November 2007 The borough in a bubble Residential market holds steady, but first-time buyers feel pinch By Lauren Elkies The residential real estate market is doing well, according to real estate professionals.…... Read more >

November 2007
The borough in a bubble

Residential market holds steady, but first-time buyers feel pinch
By Lauren Elkies

The residential real estate market is doing well, according to real estate professionals.

As of last month, serious buyers were being more cautious but appeared to have shrugged off concerns over the tightening lending standards that emerged late this summer.

"What's happening in the rest of the country is not happening in New York," said Brown Harris Stevens President Hall Willkie.

The market held relatively steady in the third quarter, according to the most recent Prudential Douglas Elliman report available at press time. The average sales price increased 2.7 percent to $1.37 million compared to the prior quarter, and inventory dropped 0.6 percent to 5,204 apartments on the market.

The number of sales did drop somewhat, however, down
11.2 percent to 3,499 completed deals during the third quarter. The number of days on the market also increased 4.4 percent to 123 days.

Still, the local market is faring well compared to the national market. At the beginning of September, the U.S. median new housing price was, for example, down 7.5 percent from the year before, the biggest drop since 1970, and the number of purchases was at its lowest point in seven years, according to the Commerce Department. The Manhattan median price was up 2.3 percent in the same year-over-year period.

In Manhattan, buyers are asking probing questions about the market, which is actually a "healthy" thing, Willkie said.

But the scrutiny and questioning are not slowing down purchases, he added.

Stan Ponte, president of Coldwell Banker Hunt Kennedy's Previews division, which focuses on luxury marketing, had a similar perspective.

"It's forced a kind of conservatism, which isn't bad," said Ponte. "There can be some short-term pain, but it's gone from kind of a speculative buyer to a more thoughtful buyer market."

But some brokers said that effects of the mortgage crisis are evident among first-time buyers.

"We're seeing the weakness in the one-bedroom market east of Third Avenue," said Frederick Peters, president of Warburg Realty. "I think those buyers tend to be first-time buyers, and they tend to be more impacted by what's going on with mortgages."

Tighter lending standards are also hindering purchases by buyers who like to fly by the seat of their pants.

"The 10 percent-down, high-income, low-asset buyer is pretty much an extinct animal in New York," Ponte said. "Banks are not approving those loans, and the buyers are reassessing what they can look at."

But in many cases, serious buyers are just becoming more serious.

Ponte said, "We have fewer showings, but those showings are more qualified and are resulting in a higher ratio of second showings."

Requests for appraisals are not down, said appraiser Jonathan Miller, executive vice president and director of research at Radar Logic.

"As near as I can tell, contract activity as opposed to this time last year is a little bit higher," Miller said last month. "But it's less than what we saw over the summer, so I guess what I'd say is, we're not seeing a significant impact from the Wall Street credit situation yet."

Inventory increased in September, when there were 5,490 units (co-ops, condos and townhouses) on the market; in August, there were 4,897 homes on the market, according to Miller's research. The overall increase was 12.7 percent.

The August-to-September uptick is not unusual as sellers gear up for the fall season.

"Four out of the last five years, inventory increased from August to September," Miller said.

The number of homes on the market is still down an impressive 32 percent from last year, however.

Real estate brokers have speculated that the credit crunch has benefited the city's rental market because more and more would-be buyers are taking rentals upon realizing they can no longer afford to buy.

But rents averaged less, and the vacancy rate edged slightly higher in September than in the two months prior. The average rent for studios through three-bedrooms was $3,260 in September, down from $3,295 in August and $3,392 in July, according to data from Citi Habitats. September's vacancy rate was 1 percent versus 0.85 in August and 0.81 in July.

Despite recent largely positive reports and feedback from brokers, the city's residential market might not be out of the woods yet.

It could be in the fourth quarter when Manhattan's residential real estate market sees the tangible effects of the credit crisis.

"We'll see somewhat lower transaction activity in the fourth quarter" due to "credit
tightening for purchasers and bonus concerns," Miller said.

Even Mayor Michael Bloomberg expressed pessimism about the market. Bloomberg said real estate prices would drop, but not "as much as any of the other places in the country because here, people don't build or buy on spec," according to the New York Post. "They build and buy and rent to live in them. And so, there's much more stability here."

 

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October 2007 REBNY portal: City's biggest one-stop shop opens on Web Real Estate Board of New York gets most firms on board; Corcoran and Elliman still won't enter portal By Lauren Elkies Manhattan homebuyers…... Read more >

October 2007
REBNY portal: City's biggest one-stop shop opens on Web

Real Estate Board of New York gets most firms on board; Corcoran and Elliman still won't enter portal
By Lauren Elkies

Manhattan homebuyers now have free access to thousands of exclusive real estate listings on a single Web site, launched by the Real Estate Board of New York after a long fight with some of its members.

The trade group unveiled ResidentialNYC.com, which has listings from 60 of its member firms, last month. It now lists about 3,000 properties.

The advantage, says REBNY president Steven Spinola, is that the site allows house hunters to view a concentration of listings, bypassing classified ads and other Web listings, some of which may not be legitimate.

"They are exclusive listings. They are real listings," he said.

ResidentialNYC.com is a Manhattan-centric site, and its roster now posts roughly 40 percent of all exclusive listings in Manhattan, Spinola said. The site has a sizable number of listings in Brooklyn and a few in Queens and the Bronx.

Brown Harris Stevens, Halstead Property, Sotheby's International Realty, Stribling & Associates and Warburg Realty Partnership are among the major firms now using the site, which saw some controversy when smaller firms balked at the initial price tag.

A number of firms declined to participate, including residential heavyweights the Corcoran Group and Prudential Douglas Elliman. The two firms accounted for 60 percent of Manhattan listings among the 10 biggest firms last year, according to a survey by The Real Deal.¬

Corcoran and Elliman released similar statements about their decisions, saying, essentially, thanks, but no thanks, at least for now.

The decision to stand on the sidelines drew a less-than-sympathetic response from Michele Kleier, president and chairman of Gumley Haft Kleier, whose firm is offering listings to the portal site.

"It's their loss," she said. Kleier said the decision means more work for consumers who will have to go to each company's Web site to view their listings.

Citi Habitats, Bellmarc Realty and Bond New York also declined to join the portal, which is powered by real estate search engine Trulia.

Citi Habitats declined to comment.

"We really felt that it wasn't going to make an impact in the marketplace," said Neil Binder, principal and co-founder of Bellmarc Realty. He criticized REBNY for not aggressively marketing the site prior to its launch. Like Corcoran and Elliman, Binder said he reserves the right to join at a later date.

Spinola said REBNY will be launching a $1 million marketing campaign over the next year. Funding will come from firm initiation fees and annual dues. The fee for participation ranges from $2,500 to $12,500, depending on company size, plus an annual $100 per-agent fee, which Spinola said will go toward advertisements and site operation. REBNY does not intend to make a profit from the site, Spinola said.

Bruno Ricciotti, co-founder of Bond New York, said, "There's a risk of redundancy at this point." A number of classified outlets already blanket the market, most notably the New York Times and Craigslist. "I have a hunch that it will turn out great for everybody, but I want to see how it works first."

While the portal is a product of the city's biggest real estate trade organization, start-ups exist that perform some of the same functions. StreetEasy.com, for example, cobbles together agents' listings through direct feeds from brokerages as well as individual firm Web sites. Like ResidentialNYC.com, StreetEasy.com lists only exclusives and does not accept for-sale-by-owner listings.

ResidentialNYC.com allows prospective buyers to search by various criteria, from property type to attended or unattended lobby. With two clicks, the consumer is brought directly to the individual firm's online posting.

Property shoppers can sign up to receive e-mail alerts of new and sold listings, among other resources.

"What benefits the consumer benefits us," said Frederick Peters of Warburg and REBNY residential committee co-chair.

Participating companies cannot pick and choose which listings get posted; they all are, REBNY's Spinola said. To keep everyone on the same playing field, given all other search criteria being equal, the order in which listings pop up has been randomized.

The majority of listings are for-sale properties rather than rentals, which are often done on a non-exclusive basis. The dearth of exclusive rental deals on the site is exacerbated by the fact that Citi Habitats, the city's biggest rental company, declined to participate.

Spinola said some buyer's brokers have contested the site because it excludes brokers like them who do not maintain their own listings.

When ResidentialNYC.com officially debuted on Sept. 28, Manhattan had 2,231 homes for sale; 564 for rent; and 2,732 properties recently sold.

In Brooklyn, there were 474 homes for sale; 35 rentals; and 5,376 recently sold. The Bronx had 24 homes for sale; seven for rent; and 1,465 sold. In Queens, 21 were for sale; one was for rent; and 7,989 had recently been sold.

Spinola mentioned that viewers of ResidentialNYC.com will not be bombarded with advertisements. Seventy to 80 percent of the home page is dedicated to real estate information, and the remainder will be available for advertising ancillary services, not listings or broker ads. And there will be no pop-up ads.

"It's clean, concise, accurate," said Diane Ramirez of Halstead Property and a REBNY residential committee co-chair. REBNY is creating a new board to provide oversight.

Meanwhile, the same week REBNY's portal was unveiled, the New York Times introduced a mobile component to its real estate classifieds. Some observers have said that the Times stands to lose out on advertising revenue if brokers start to rely on ResidentialNYC.com rather than placing property ads in the Times.

The Times' feature will allow people to view properties on their mobile devices and will send listings from the print version of the newspaper or Web to their mobile device.

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October 2007 Credit crunch: Much ado about (almost) nothing Third-quarter numbers show Manhattan residential market still healthy By Lauren Elkies While residential buyers and sellers question the fate…... Read more >

October 2007
Credit crunch: Much ado about (almost) nothing
Third-quarter numbers show Manhattan residential market still healthy
By Lauren Elkies

While residential buyers and sellers question the fate of the real estate market, some brokers report that in Manhattan it's much ado about (almost) nothing, at least in the short run.

"The credit crunch is expected to temper sales activity as tighter underwriting standards knock some people out of the market," said Jonathan Miller, executive vice president and director of research for Radar Logic, which reached a deal last month to purchase Miller Samuel, the residential real estate appraisal firm co-founded by Miller in 1986. "However, to date, there is no real evidence that sales activity is down relative to typical August/September market periods."

Sellers are still selling and buyers are still buying.

In the third quarter, the number of sales decreased 11.2 percent to 3,499 from the second quarter, but rose 65.6 percent from the third quarter of 2006, according to data prepared by Miller for Prudential Douglas Elliman. The average sales price saw a 2.7 percent uptick to $1.37 million from the second quarter and a 6.3 percent increase from the third quarter of 2006.

Fall came on the heels of a solid August when demand continued to chip away at inventory.

Co-op and condo units and townhouses on the market were "all down from last year, but they're coming from a high place," Miller said. The number of unsold Manhattan co-op units dropped by 41.9 percent to 2,077 in August; condos decreased 31.2 percent to 2,569; and townhouses dropped 46.8 percent to 251, Miller found. Together, they sunk year-over-year to 4,897 units from 7,784 units, a 37.1 percent decline.

There was little change in co-op and condo inventory between the second and third quarters, the Elliman statistics indicate, but together they dropped 31.7 percent from a year earlier.

Barak Dunayer, president and founder of Barak Realty, said that business has been on track.

"In New York we really don't see that much of a difference," Dunayer said.

But not all market watchdogs have such an optimistic view.

"It's very simple: As of the beginning of September, the market has totally stopped creating the level of activity as it had before ... and it's not because of the Jewish holidays," said Neil Binder, principal and co-founder of Bellmarc Realty.

Open house attendance has fallen off, some brokers say.

At Warburg Realty Partnership, attendance gradually decreased over the summer months from a high of 60 in the spring to between eight and 20 last month, the company's data indicates.

Also in September, Elliman saw a sharp drop in attendance at open houses. An average of six to 10 people showed up at open houses last month as opposed to 15 to 20 a year earlier, said Steven James, president of the Manhattan brokerage division at Elliman. The percentage of offers, however, was about 20 percent higher last month, James said. In some cases there were even bidding wars. On the flip side, he noted that a few buyers got cold feet mid-deal, which he attributed to the mortgage crisis.

Binder said that at the start of September, closings were on track and open houses were "getting decent activity."

But he added that open house numbers are not the same as transaction numbers. "No one's putting money down on the table," he said.

Some price points are seeing more activity than others.

"High-priced stuff is starting to have problems," Binder said, referring to properties starting at $3 million. Middle-market properties, on the other hand, are surviving because of a much wider buyer pool, he said.

Brokers said they were not seeing asking price reductions last month or homeowners aggressively unloading their apartments into the marketplace in response to the turbulent economy.

Since Wall Street bonuses drive big real estate purchases, should payouts be substantially less this year than last, high-end property sales could suffer.

But concerns about bonuses this year might be overstated since a single-digit cut from last year's record figures would still amount to some of the highest allocated in history, Miller of Radar Logic said. Greater harm could come from public perception of a bad year.

Sales in new developments could be harder hit than resales because of the premium they command and the time the deals take to close. A qualified buyer today could become an unqualified buyer by the time the closing rolls around.

Developers seem to be preparing for the ripple effect of the mortgage crisis as they employ public relations tactics like wining and dining brokers.

Manhattan's real estate market is not expected to take the same beating as markets elsewhere in the country because stringent financial requirements make Manhattan buyers less dependent on mortgages.

Still, a mortgage crisis makes buying real estate a game for cash-rich buyers.

"We're reverting to a higher down payment scenario than we have seen in five years, and I don't see that changing in the immediate future," Miller said.

The Federal Reserve attempted to ameliorate the situation by cutting interest rates by half a point to 4.75 percent last month, but marginal buyers still are likely to be pushed out of the market.

"Across the board, I suspect you won't see the record pace of activity that we saw this year, but I suspect it will be elevated," Miller said.

Brokers speculated that this month sellers would become more realistic about pricing, in turn spurring more sales.

The market "won't tolerate wildly inflated pricing," said Frederick Peters, president of Warburg Realty. "People will want the sense of value because of the credit crunch. I don't think prices will go down. There will just have to be a clear price-to-value ratio more than there was six months ago."

While potential buyers cannot anticipate dramatic markdowns, they may be able to take advantage of market uncertainty by seeking concessions from sellers, such as covering buyers' closing costs.

Not everyone considers the current state of affairs to be a bad thing.

"It's ultimately good for us because it means that once again money is mainly being loaned to people that ought to have money loaned to them," Peters said. "I think that's a stabilizing force in the marketplace."

 

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The Manhattan Real Estate Slump That Wasn’t By TERI KARUSH ROGERS Published: August 19, 2007 IT wasn’t supposed to happen this way.  Just a year ago, as real estate brokers fretted through an…... Read more >

The Manhattan Real Estate Slump That Wasn’t

By TERI KARUSH ROGERS
Published: August 19, 2007

IT wasn’t supposed to happen this way.  Just a year ago, as real estate brokers fretted through an ominously quiet third quarter, many Manhattanites waited for the housing market to reverse its madcap ascent and fall into line with the rest of the country.

But something happened on the way to the Great Manhattan Housing Slump. After what brokers optimistically termed a “pause” in the second half of 2006, buyers swarmed into the market. The torrent was so intense that by the end of this past June, it was clear that an astonishing gulf had opened up between Manhattan and nearly everywhere else.

On the national level, sales of existing homes slowed by 17 percent in the second quarter of 2007, compared with the second quarter of 2006, while inventory swelled by 16 percent, according to figures provided by the National Association of Realtors. New homes fared even worse: they fell by almost 19 percent, according to Commerce Department figures.

In Manhattan, by comparison, sales of new and existing apartments more than doubled. In a trend that could shift quickly in light of the recent problems in the credit and stock markets, inventory shed a third of its bulk. It dropped to 5,237 units, despite the influx of several thousand new condos, according to Miller Samuel Inc., the Manhattan appraisal company

Prices have been starkly different as well. By last month, the national picture was so dire that Angelo R. Mozilo, the chairman and chief executive of Countrywide Financial, the country’s largest mortgage lender, said things had not been so bleak since the Depression.

Cut to Manhattan. After a boom with annual price increases of 20 percent or more ended in mid-2005, prices have continued to rise over all, but not as sharply. In the second quarter of 2007, Miller Samuel said the average sale price of a Manhattan studio climbed 16.5 percent compared with the second quarter of 2005. The average for a one-bedroom climbed by 18.4 percent and a two-bedroom by 5.9 percent.

Apartments with three bedrooms, which make up about 6 percent of the market but appeal to an ever-more-moneyed class of buyers, rose by 17.9 percent in the same period.

Major brokerages, including Halstead Property, Bellmarc Realty, Brown Harris Stevens, Prudential Douglas Elliman and the Corcoran Group, say they are recording sales and profits that rival boom-time results. In fact, Douglas Elliman and Corcoran predict that this will be their most lucrative year by far.
Whether this momentum can be sustained remains to be seen, particularly in light of the recent gyrations in the debt market, which have led to a reduction in the availability of large mortgages and to an increase in their rates. A deepening credit-market crisis and national housing slump could squeeze the economy, the stock market and bonus pools.

“For the first time in over a year, there is some negative talk — about the credit markets and whether or not this will permeate the New York City real estate market,” said Pamela Liebman, president of Corcoran. “As of right now, it hasn’t. There has been no slowdown.” She said the biggest concern among her agents is finding enough inventory to satisfy demand.

But a buying binge alone does not a housing boom make. “I’m still not characterizing the market right now as a housing boom except in the upper echelon,” said Jonathan Miller, president of Miller Samuel.
So how has Manhattan (and, to a lesser extent, sought-after pockets of Brooklyn) managed to avoid a slump?

“Obviously, the market was helped first by the rumor and the reality of bonus money,” said Frederick W. Peters, president of Warburg Realty. He was referring to the fourth straight year of substantial bonus increases, particularly on Wall Street, that along with a rising stock market helped push buyers off the sidelines at the end of 2006 and caused some agents to cancel their winter vacations.

“But I also think we’re just in one of those demographic upswing periods,” Mr. Peters added. “More people are moving into the city, fewer people are moving out, and the rental market got much tighter over the course of 2006, which once again made buying a more attractive option. You put all those things together, and the market sort of entered the narrow part of the hourglass.”

There were other factors to consider, too. Tourism is at record highs, and the local economy is doing well in general. And it’s nearly as hard to find premium office space or a spot in private school as it is to find a family-size apartment.

But that’s exactly what more and more families have set their sights on.

It has been years since Samantha Kleier Forbes, a broker at Gumley Haft Kleier, lost a client to the suburbs. “My last casualty was in ’04,” she said. As two-career couples work longer hours and as the city grows safer and more family-friendly, there is a big demand for large apartments like Classic 6’s — a two-bedroom apartment with living room, dining room, kitchen and maid’s room (where children can be found bunking like sailors).

Families who want to stay, brokers say, are only one segment of the more stratified and well-heeled masses clamoring for a piece of Manhattan. While the dollar’s seemingly endless slide may have crimped the foreign vacation plans of many Americans, the purchasing power of Europeans has strengthened. They are increasingly matched, if not outmatched, by buyers from countries like China and India. And foreign buyers find Manhattan real estate very appealing when they compare prices in other large international cities like London.

“I’ve had 20 percent more business from international clients in the past couple of years,” said Sallie Stern, a senior vice president and managing director of Brown Harris Stevens. “They probably account for 30 to 35 percent. It’s a world market now.”

Shaun Osher, the chief executive of CORE Group Marketing, which is handling 11 condominium projects in Manhattan, said the number of foreign apartment-seekers had doubled since the end of 2005. Foreign buyers now constitute 5 to 10 percent of the sales in the buildings marketed by his firms.

“When you look at hotel rates and what it costs to come into Manhattan, it makes sense now to buy a pied-à-terre,” he said.

Besides foreign buyers, brokers say, more parents are snapping up apartments for their children, and some retirees are choosing Manhattan over the likes of Boca Raton.

“The baby boomer generation isn’t ready to give up and live in a swamp,” said Darren Sukenik, an executive vice president of Prudential Douglas Elliman. In fact, they are living the lives their nearby children would like to lead if only they weren’t working so hard, he said.

Meanwhile, renters have emerged as a force in the market, particularly for entry-level apartments. “Rents are rising again, and that pushes people back into the condo and co-op market if they have more than a one- or two-year time frame for living in Manhattan,” said Stephen G. Kliegerman, the executive director of marketing for new developments at Halstead Property.

Fanning the flames have been job and population growth, historically low interest rates and a trove of personal wealth minted by hedge funds, private equity firms and, to a lesser extent, the investment banks that serve them. Add to that the psychological comfort of knowing that Manhattan flourished after the Sept. 11 terrorist attacks, and further, that it appears to have shrugged off a national housing slump.
Even the condo glut that so many real estate executives feared has turned out instead to be a boon of sorts. “If we didn’t have new development coming on at the pace we did, we’d have a chronic shortage across all sectors, and we’d see 20 percent price growth,” said Mr. Miller, the appraiser.

Mr. Peters of Warburg Realty agreed. “You can’t even imagine how awful it would be,” he said. On the other hand, he added, things may feel pretty awful already for buyers who want a prewar apartment, since inventory in this sector continues to evaporate. In the last two years, co-ops, about half of which were built before World War II, have slipped from 63 percent of the market to 47 percent as new condos have been built, Miller Samuel said.

“There are so many new units coming on the market and being sold, but the real heart and soul of the co-op market is really depleted,” said Barbara Fox, the president of the Fox Residential Group, a Manhattan brokerage.

Consequently, brokers say, many prewar apartments in good condition, along with family-size apartments of any vintage, are being snatched up in bidding wars whose aggressiveness outrivals those of two years ago.

“The new rule is that there are no rules, and when you’re lying bleeding on your way to the emergency room, you’re still shouting, ‘Higher offer, higher offer!’ ” said Julie Friedman, a senior associate broker at Bellmarc.

She was among the many brokers who said that “best and final” offers have largely become neither, with buyers and sellers routinely negotiating after another bid has been accepted. “You remind sellers that there is a moral component, but my duty is to get the highest amount, and ‘moral’ and ‘the highest amount’ don’t necessarily overlap,” she said.

Some brokers complained that the demise of the sealed bid, which has been replaced over the last two or three years by e-mail offers to the seller’s agent, has further undermined fair play. “Buyers don’t trust them as much,” said Michele Kleier, president of Gumley Haft Kleier.

Whether Manhattan continues to be the land the slump forgot or is merely sunning itself before a hurricane is something of a guess. A strengthening dollar, a severe terrorist attack or a national economy hobbled by housing market woes could inflict blows of varying strengths.

More immediate is the worry about the availability of credit. “While I don’t think we were propped up to the extent other markets were by subprime and adjustable-rate mortgages, it does make credit hard to get for everyone to some degree,” said Gregory J. Heym, an economist for Brown Harris Stevens and Halstead Property. “Most people are probably expecting mortgages to be tougher to get.”

Mortgage lenders everywhere are going back to pre-boom lending standards, so obtaining a mortgage is harder for buyers with pockmarked credit or sketchy employment. But there is no panic over rising mortgage rates on jumbo loans (those exceeding $417,000), at least not now.

Large lenders like Chase and HSBC that typically sell mortgages after they make them can no longer do so because the credit crisis has dried up the secondary market, said Jeffrey Appel, a senior vice president and the director of new development financing at the Preferred Empire Mortgage Company in New York. Many large institutional lenders have raised their rates as a hedge against uncertainty, but rates at smaller regional savings banks, the so-called portfolio lenders who hang on to their loans, have hardly budged.

Last Monday, Melissa L. Cohn, the president of the Manhattan Mortgage Company, the largest residential mortgage broker in the New York, New Jersey and Connecticut, said her best rate on a 30-year $1 million mortgage was 6 7/8 percent, offered by a portfolio lender. And her worst rate, offered by a lender that sells mortgages on the secondary market, was 8 3/8 percent.

“Despite this incredible hysteria,” Ms. Cohn said, “there’s plenty of money for qualified borrowers.”

The credit-market meltdown could yet cloud Manhattan’s real estate prospects because of stock-market jitters. And an end to the leveraged buyout boom, if that happens, could trigger layoffs on Wall Street and eat away at bonuses.

But the fiscal year is far enough along that financial services workers can expect gains of 10 to 15 percent when bonus season rolls around later this year, said Alan Johnson, the managing director of Johnson Associates, a Wall Street compensation consultant. The real pain, if there is any to be felt, would come in the 2008-09 bonus season, he said, and a year or two later for private equity firms, which typically make their profits several years after a takeover.

“Pay is going to probably drop, but if it’s dropping from a really, really high level, we’re probably not going to have any charity dinners for these people,” Mr. Johnson said.

By then, too, the flow of new development is expected to slow significantly, judging from the dwindling number of construction permits filed this year. To the extent Manhattan’s housing market is threatened by a weak national economy and by declining bonuses, said Mr. Miller of Miller Samuel, “then the fact that we have a lower level of supply coming on would help keep the market from correcting.”

Neil Binder, a principal in Bellmarc Realty and a 30-year industry veteran, typically views upturns with a jaundiced eye. But in a residential market with tight supply and intense demand, he doesn’t see Manhattan’s real estate karma changing anytime soon, even in the face of mortgage-market turmoil.

“My brokers are saying their biggest frustration is to have buyers when there’s no product and that there’s nothing out there but new construction,” Mr. Binder said. “We may have bumps, but I don’t feel the underpinnings are weakening. My biggest problem this month is that I have all my salespeople taking vacations because they made so much money. My East Side office is a ghost town.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Cracks may appear in Manhattan apartment market Mon Aug 13, 2007 10:47AM EDT By Ilaina Jonas NEW YORK (Reuters) - At the end of July, Deanna Kory had a bidding war on her hands. Three potential buyers…... Read more >

Cracks may appear in Manhattan apartment market

Mon Aug 13, 2007 10:47AM EDT
By Ilaina Jonas

NEW YORK (Reuters) - At the end of July, Deanna Kory had a bidding war on her hands. Three potential buyers were vying for a luxury apartment the Manhattan real estate broker was selling for a client at a $4 million asking price.
On July 27, the end of a week when the Standard & Poor's 500 stock index suffer its worst one-week percentage drop since 2002, she called the winning bidder with the good news. The next day he withdrew his bid for the Upper West Side home.

There is no sign of a downturn in sales figures for now, but Kory's experience may be an early sign of weakness in the robust Manhattan market that could be vulnerable to struggling stock markets, hedge fund losses and newly cautious lenders.

"I guess he called his mortgage person and found it wasn't going to be as easy as he thought for him to get what he wanted. He got nervous and decided not to proceed," said Kory, senior vice president of the Corcoran Group.

She also suspects he may have feared his bonus was going to be hurt by the market's slide. The bidder, like much of her clientele, works in the financial industry.

Manhattan is among the few U.S. real estate markets to remain buoyant. Elsewhere, demand for homes has slackened, numbers of homes for sale have swelled, and in an increasing number of markets, prices have declined.

Fat Wall Street bonuses handed out at the beginning of this year, a relatively strong New York economy, and foreign buying fueled by a weaker dollar, have driven Manhattan apartment prices higher. In the second quarter, the median price of a Manhattan apartment rose 1.7 percent to a record $895,000.

Other nearby markets with roots in the financial community, such as Greenwich, Connecticut -- the headquarters for many hedge funds -- and the summer playground of the Hamptons on Long Island, have also been resilient.

Real estate experts say the size of bonuses may be crucial and the market may meander until it becomes clear whether those sums will be slashed from the record amounts handed out in early 2007 -- an estimated $23.9 billion.

"They stimulate demand just because after a good bonus year there is so much more activity in the first few months of the year that sets the tone for the spring market," said Jonathan Miller, chief executive of appraisal firm Miller Samuel Inc.

"If this situation continues to erode ... I think compensation would be more impacted in '09 than '08, just because we've already had a good year," Miller said.

Credit tightening stemming from bad loans to less-than-creditworthy home buyers also has infected the market for mortgages for borrowers with better standing.

Given the expense of buying an apartment in Manhattan, many buyers use jumbo mortgages, defined as those over $417,000. Some risk-averse home lenders are curbing their jumbo lending or raising rates.

Jumbo mortgage rates are about a half a percentage point higher than they should be, said Eric Appelbaum, president and owner of Apple Mortgage. "If this isn't corrected, I think it could put a serous damper on two- or three- or four-bedroom apartments in the city," he said.
But real estate experts said it will take more than a couple of weeks of financial instability to put the brakes on Manhattan real estate.

And August is a slow time for real estate, as Manhattan's well-off head to summer retreats in places like the Hamptons, the Catskills and Martha's Vineyard. Any slowdown will be difficult to detect for now, brokers said.

"I still have people signing contracts, but it will be much easier to tell if there's impact a month from now," said Frederick Peters, president of Warburg Realty.

TIGHT SUPPLY, CO-OP BOARDS

A limited supply of properties in Manhattan and related markets has helped keep prices up.
"It's all about the inventory," said Andrew Saunders, senior vice president of Sotheby's International Realty in Bridgehampton. "In the $5 million-and-up market there is just not a lot."

In the Hamptons, tight rules about what can be built and the desire to be near the beach has limited supply. Meanwhile, the Greenwich market is relatively small with only about 900 sales a year, said David Ogilvy, president of David Ogilvy & Associates, a Christie's Great Estates affiliate. Prices for residential properties in Greenwich run from $600,000 to about $39 million, and many people buy with cash.

"Some of these hedge-fund people have made so much money, they're not looking to sell their homes," Ogilvy said. "If they have to cut back ... they don't use their jets."

Manhattan has another layer of protection: co-op boards. About two thirds of all the non-rental residential units in Manhattan are co-operative apartments.

In a co-op, the apartment building becomes a corporation. Instead of owning their individual apartments, buyers own shares in the corporations, which are governed by boards.

The boards can demand buyers put a large percentage of their own money down, often 25 to 50 percent. In addition to being asked about their current assets and income, buyers may also be asked about their career prospects.

"Most co-ops have always held a more stringent underwriting standard than even the most stringent bank," Appelbaum said.
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Cracks may appear in Manhattan apartment market Aug 12 2007 10:10AM EDT By Ilaina Jonas NEW YORK (Reuters) - At the end of July, Deanna Kory had a bidding war on her hands. Three potential buyers were…... Read more >

Cracks may appear in Manhattan apartment market
Aug 12 2007 10:10AM EDT
By Ilaina Jonas

NEW YORK (Reuters) - At the end of July, Deanna Kory had a bidding war on her hands. Three potential buyers were vying for a luxury apartment the Manhattan real estate broker was selling for a client at a $4 million asking price.
On July 27, the end of a week when the Standard Poor's 500 stock index suffer its worst one-week percentage drop since 2002, she called the winning bidder with the good news. The next day he withdrew his bid for the Upper West Side home.

There is no sign of a downturn in sales figures for now, but Kory's experience may be an early sign of weakness in the robust Manhattan market that could be vulnerable to struggling stock markets, hedge fun losses and newly cautious lenders.

"I guess he called his mortgage person and found it wasn't going to be as easy as he thought for him to get what he wanted. He got nervous and decided not to proceed," said Kory, senior vice president of the Corcoran Group.

She also suspects he may have feared his bonus was going to be hurt by the market's slide. The bidder, like much of her clientele, works in the financial industry.

Manhattan is among the few U.S. real estate markets to remain buoyant. Elsewhere, demand for homes has slackened, numbers of homes for sale have swelled, and in an increasing number of markets, prices have declined.

Fat Wall Street bonuses handed out at the beginning of this year, a relatively strong New York economy, and foreign buying fueled by a weaker dollar, have driven Manhattan apartment prices higher. In the second quarter, the median price of a Manhattan apartment rose 1.7 percent to a record $895,000.
Other nearby markets with roots in the financial community, such as Greenwich, Connecticut -- the headquarters for many hedge funds -- and the summer playground of the Hamptons on Long Island, have also been resilient.

Real estate experts say the size of bonuses may be crucial and the market may meander until it becomes clear whether those sums will be slashed from the record amounts handed out in early 2007, an estimated $23.9 billion.

"They stimulate demand just because after a good bonus year there is so much more activity in the first few months of the year that sets the tone for the spring market," said Jonathan Miller, chief executive, of appraisal firm Miller Samuel Inc.

"If this situation continues to erode... I think compensation would be more impacted in '09 than '08, just because we've already had a good year," Miller said.

Credit tightening stemming from bad loans to less-than-creditworthy home buyers also has infected the market for mortgages for borrowers with better standing.

Given the expense of buying an apartment in Manhattan, many buyers use jumbo mortgages, defined as those over $417,000. Some risk-averse home lenders are curbing their jumbo lending or raising rates.
Jumbo mortgage rates are about a half a percentage point higher than they should be, said Eric Appelbaum, president and owner of Apple Mortgage. "If this isn't corrected, I think it could put a serous damper on two- or three-, or four-bedroom apartments in the city," he said.

But real estate experts said it will take more than a couple of weeks of financial instability to put the brakes on Manhattan real estate.

And August is a slow time for real estate, as Manhattan's well-off head to summer retreats in places like the Hamptons, the Catskills and Martha's Vineyard. Any slowdown will be difficult to detect for now, brokers said.

"I still have people signing contracts, but it will be much easier to tell if there's impact a month from now," said Frederick Peters, president of Warburg Realty.

TIGHT SUPPLY, CO-OP BOARDS
A limited supply of properties in Manhattan and related markets has helped keep prices up.
"It's all about the inventory," said Andrew Saunders, senior vice president of Sotheby's International Realty in Bridgehampton. "In the $5 million-and-up market there is just not a lot."

In the Hamptons, tight rules about what can be built and the desire to be near the beach has limited supply. Meanwhile, the Greenwich market is relatively small with only about 900 sales a year, said David Ogilvy, president of David Ogilvy Associates, a Christie's Great Estates affiliate. Prices for residential properties in Greenwich run from $600,000 to about $39 million, and many people buy with cash.

"Some of these hedge fund people have made so much money, they're not looking to sell their homes," Ogilvy said. "If they have to cut back... they don't use their jets."

Manhattan has another layer of protection: co-op boards. About two thirds of all the non-rental residential units in Manhattan are co-operative apartments.

In a co-op, the apartment building becomes a corporation. Instead of owning their individual apartments, buyers own shares in the corporations, which are governed by boards.

The boards can demand buyers put a large percentage of their own money down, often 25 to 50 percent. In addition to being asked about their current assets and income, buyers may also be asked about their career prospects.

"Most co-ops have always held a more stringent underwriting standard than even the most stringent bank," Appelbaum said.

 

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May 2007 Q & A: Going for brokerage Firm management walk fine line in quest for profits By Melissa Dehncke-McGill If location, location, location is the core cliché of real estate success, the second…... Read more >

May 2007
Q & A: Going for brokerage
Firm management walk fine line in quest for profits
By Melissa Dehncke-McGill
If location, location, location is the core cliché of real estate success, the second is at least equally sound: Watch the bottom line. The Real Deal spoke to chief executives of Manhattan's top residential firms about running a brokerage in today's market.

Agents constantly push for better commission splits, and technology, space and advertising overhead costs continue to mount. Keeping operating costs down and revenue up is a tough proposition for any business, but it's especially hard in the competitive Manhattan real estate market.

Of course, brokerage heads are finding more ways to make money too, including the "gold rush" of new condo developments. Other firms are recouping some costs of doing business with new agent fees.

"It has never been overly profitable; it's a razor-thin business," says Neil Binder, principal and co-founder of Bellmarc.

Barak Dunayer
founder and president, Barak Realty

How profitable is the brokerage business now, and how has that changed over time?

If you know what you are doing, it's very profitable. Because of the intense competition, if you don't know how to manage your overhead, it's less profitable. A lot of people go from agents to brokers, but running a company is a completely different business. You are managing human resources, cash flow and administrative positions. A lot of people are coming into the business and opening their own shops and have no idea.

Corcoran recently introduced an annual marketing fee that brokers are required to pay, similar to what's seen in the rest of the country. Do you think you'll see more of that in the city?

That is huge. I think $1,500 per agent is outrageous. I think a lot of agents are not happy about that. It's going to get a lot of resistance. They still have the traditional commission split model, so they can have their cake and eat it too.

How important is marketing new condo development in the brokerage business today, and how has that changed in recent years?

That's been the gold rush of last five years. People got extremely wealthy marketing new developments. If it's a successful project, it's like selling pizza slices. On the other hand, there are firms that have entered into bad projects that were not successful. There is a huge risk in putting so much into marketing a new project. A lot of time and resources can be concentrated on that project, and if it's not successful and you neglect other areas, you can be in trouble. You have to select carefully and turn down bad projects.

What are the major costs to run a brokerage, and how has that changed over time?

Office rents are up, advertising rates go up every year, and payroll -- you have to keep managers on a salary.

What about desk costs?

We take the 30 desks at Barak Realty -- overall overhead plus phones, electricity, paper and administrative costs -- and divide it by 30, and we get the cost to run the desk. We say to agents that at a minimum assume $50,000 to run a desk. If the agent is on a 50/50 commission split, an agent at minimum has to make a $100,000 to break even, to make a minimum to maintain a desk. A handful of firms have popped up recently offering 100 percent commissions to agents, instead of a typical split with the brokerage. In exchange, the agents have to pay a monthly service fee to the brokerage.

Do you see this type of business model increasing in New York City?

The firms with fees have passed the risk of cash flow management to the agents. I don't think the agents are equipped to assume that risk. It's a nice novelty, though.

For the brokerages that follow the traditional commission model, what trends are you seeing in terms of commission splits?

I think as desk costs and overhead costs go up, the people in the middle of those firms who are at 50 to 55 percent commission splits are the bread and butter for the firms. That's how the firm makes money. The higher commission splits have a lot of activity, but the bottom line is that the firm makes much more money on the people in the middle.

Do you think you'll continue to see the biggest firms -- Corcoran and Elliman -- continue to get bigger, which it seems they certainly have in the past couple of years?

I think so. They are going to get bigger; I don't know if they'll get better, because it's harder to do quality control, but they will certainly get bigger. The key is quality control, which is extremely difficult.

Is there an overrated part of the brokerage business right now?

One thing the biggest firms sell you is the Web site. I think it's the most overrated part of the pitch, a lot of smoke and mirrors there. Mainly because 90 percent of the time property is sold broker to broker -- there's a seller broker and buyer broker.

How important is office location and spending money on an office? Is it important to have a retail presence?

I think it's very important to have some kind of retail presence. We are planning to open a storefront on the Upper East Side next year. But you have to look at it as half is rent for the space and the other is for advertising.

Dottie Herman
president and CEO, Prudential Douglas Elliman

What is the most interesting trend you see in the New York City residential brokerage business right now?

Ten to 15 years ago, if you did really well, a broker might decide to open his or her own company. Now the cost of opening one's own shop is astronomical, and it is prohibitive to do that and give the service that big companies provide, so sales agents are basically becoming a business within a business. They have their group or team that they run within the context of the larger company. In New York City it is new that agents are branding themselves a bit. Five or six years ago you would never see an agent's name in an ad.

How profitable is the brokerage business now, and how has that changed over time?

Traditionally the real estate brokerage business has been a very low-margin business, and it really still is. The costs are a lot more now with computers and technology. Years ago there was no secretary, and the demands of the consumer were a lot less. If anything it's a declining margin. That's why companies look for other avenues of income.

Corcoran recently introduced an annual marketing fee that brokers are required to pay, similar to what's seen in the rest of the country. Do you think you'll see more of that in the city?

At the end of the day I think that the whole industry has changed. The cost of being in business is much greater, and if companies intend to stay in business, they need to pass on some costs.

Are the broker ranks expanding right now or receding?

They're expanding. Being in this business is one of the hardest, most grueling careers, but if you are good at what you do, it looks easy.

Neil Binder
principal and co-founder, Bellmarc

What is the most interesting trend you see in the New York City residential brokerage business right now?

One trend is a much greater tendency toward image marketing rather than portraying apartments. [Some firms] would rather portray an awareness of who they are as an identity, as a participant in the game, rather than showing a slew of apartments in the newspaper for sale.

What are the major costs and how has that changed over time? What about desk costs?

Technology has become a larger cost year by year. The Internet is a huge expense. You can't just put up a site; you have to manage the site, manage the content, usability and the degree of services the site offers. My Internet consulting firm views me as one of its best friends. It's a marriage between in-house and out. We have a design development person who is not internal who does design for us. We also have an internal computer department of four people.

Corcoran recently introduced an annual marketing fee that brokers are required to pay, similar to what's seen in the rest of the country. Do you think you'll see more of that in the city?

Every firm has certain kinds of expenses in one form or another that they charge salespeople. This has become back-door income for a lot of companies, but I am not in favor of it, and it is not in our plans to do it. Some charge a computer fee of $1,500 a year and $1,000 a year for errors and omissions. Those are names given to those expenses; they are just mechanisms to get additional money for the company, in my opinion. At the end of the day, it's more money in my pocket rather than in yours. It's a device used by certain firms in order to tell people they can have a higher commission split because they are not focused on all the ancillary costs that are not being deducted from every deal. Marketing high commission splits but getting more increases in fees is just a device. That's how I read it.

What surprises you most about the brokerage business currently?

How well we are doing. I can't believe how many transactions there are compared with the rest of the country and world. In 1990, many firms went under, so Manhattan does not always do well.

Frederick Peters
president, Warburg Realty Partnership

What is the most interesting trend you see in the New York City residential brokerage business right now?

I think the major trend in recent years has been small companies going out of business or being swallowed up by bigger companies. As with other industries, consolidation seems to be the word of the day.

A handful of firms have popped up recently offering 100 percent commission to agents, instead of a typical split with the brokerage. In exchange, the agents have to pay a monthly service fee to the brokerage. Do you see this type of business model increasing in New York City?

That model requires brokers to focus on running more like a small business. It distracts them from doing what they are likely to do best, which is selling real estate.

How profitable is the new development marketing part of the business compared with regular resale brokerage?

On a unit-per-unit basis, it's probably slightly more profitable. If you are the agent for that building, you get a boatload of exclusives to sell. In one negotiation you can get access to 20, 50 or more exclusives. From the agent's perspective that's extremely desirable.

What trends are you seeing in terms of advertising? In terms of amount spent, design of ads, branding, etc.?

Every year there is less interest in classified advertising. The major trend has been the Internet, and most of us, firms that do significant business, are increasingly interested in directing traffic to our Web site as well as marketing properties and ourselves most effectively.

Are the broker ranks expanding right now or receding? Are firms changing their hiring patterns in general?

I basically urge them not to go into the business. It is a very hard time to become a broker unless you have a big sphere of influence and can get up to speed with information and be committed to surviving a number of months without money. People are exiting the business, and fewer are coming in, and I think that's all to the good.

Do you think you'll continue to see the biggest firms -- Corcoran and Elliman -- continue to get bigger?

Yes, that will continue if you are part of a public company. It is all about year-over-year growth.

Any changes you see ahead in how brokerages will expand their business model?

Throughout the country, there are on-site mortgage services and the one office that does everything. That has never really caught on in New York City. My personal feeling is that the people who do best in any industry are the ones who stay focused. Speaking for myself, I really want to remain a brokerage business. I don't want to be distracted by doing other stuff.

Jim Mazzeo
president, Weichert Realtors Mazzeo Agency

What is the most positive trend you see in the New York City brokerage business?

The industry in the city is more cooperative. The Real Estate Board of New York's regulations requiring members to co-broker their listings has pulled the industry together a bit and standardized some of the ways we do things. It has also increased education and member events, which in general are good things for the industry.

Corcoran recently introduced an annual marketing fee that brokers are required to pay, similar to what's seen in the rest of the country. Do you think you'll see more of that in the city?

The larger companies have greater difficulty with advertising because they are unable to monitor each individual ad, and instead of monitoring, they put their agents on a budget. I think that makes it harder for the agent. I approve every ad I run, which actually allows me to run more ads for my agents because I can better monitor the results. I think you will see the larger companies continue to get tougher with their agents on advertising as they continue to try to maximize profits.

Is there an underrated part of the brokerage business right now?

The underrated part is that you really are having a positive effect on people's lives and they most often fare far better from having purchased than not.

Rick Hoffman
regional senior vice president for the East End of Long Island, Corcoran

What percentage of brokers have left the industry in New York?

I haven't seen the ranks diminish out here, but there are fewer coming in as newly licensed agents. We have the same number in the industry; it's just not growing the way it was with new people.

How important is a retail brokerage presence?

Retail is very important. Spending money is important; we have some of the best [retail] offices in the industry out here.

Jerry Weinstein
founder and president, Manhattan Apartments

What is the most interesting trend you see in the New York City residential brokerage business right now?

The most interesting aspect of the brokerage business right now is the motivation of most companies to continue to grow and expand as quickly as they can. This trend has been going on for a number of years and shows no signs of a letup.

What is the most negative trend in the brokerage business?

The most negative trend is that agents forget that they are the brokers of a deal, and the ones who make the deals happen, rather than the idea that they just "show" apartments through open houses and the opening of doors. They are tending to underestimate the value of their own participation in the transaction.

Are the broker ranks expanding right now or receding?

Right now the glamour of the brokerage business has receded, and fewer people are coming into the field. That requires more competition in marketing and hiring techniques. Still, most companies are looking to expand.

Is there an overrated or underrated part of the brokerage business right now?

The overrated part of the business is the continued drive towards luxury as the prime market, in a city that prides itself on the commonality of all.

The underrated part of the business is the steady presence of the rental business as a strong force in the New York real estate market.

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SPRING FEVER THIS AIN’T NO BUBBLE - MANHATTAN LUXURY IS BACK WITH A VENGEANCE By MAX GROSS April 26, 2007 -- Well, that didn’t take long. Whether you saw it as a bubble bursting or a dip or a slowdown,…... Read more >

SPRING FEVER

THIS AIN’T NO BUBBLE - MANHATTAN LUXURY IS BACK WITH A VENGEANCE
By MAX GROSS






April 26, 2007 -- Well, that didn’t take long.

Whether you saw it as a bubble bursting or a dip or a slowdown, whatever it was that was afflicting the housing market in 2006 seems to be over.

No, the market hasn’t quite gone back to those halcyon days when people were making wild-eyed offers on overpriced closets. We haven’t heard any recent reports of buyers slugging it out at an Alphabet City open house. But the high-end market has taken off into a stratosphere never before seen, with buyers going gaga over properties that cost $3 million and up.

Yes, the madness has returned.

Let’s throw out the requisite disclaimers: Interest rates might rise. A recession would hit housing extremely hard. Areas like the Financial District and much of Brooklyn are seeing an incredible amount of new development that will need time to be absorbed.

But consider this: The current Manhattan frenzy feels a lot more solid than the last time the market went into heat. Many recent eye-popping transactions involve buyers paying all cash for co-ops. Such transactions, of course, mean there’s no chance of defaulting on a million-dollar mortgage.

“Seventy percent of the housing stock in New York are co-ops,” says Hall Willkie, president of Brown Harris Stevens. “Co-ops are some of the best buildings in the city and you don’t even know the names of them. Every co-op restricts financing. So what you have is people paying $20 million in cash for an apartment.”

And Willkie and numerous industry insiders we spoke to have seen high-end properties not just selling, but selling for way over their asking prices.

“I’d say it’s much more of a frenzy” now than it was two years ago, says Shaun Osher, CEO of Core Group Marketing.

Osher points to an apartment he sold on West 23rd Street that Core had listed for $6.5 million. “It had been on the market for 3 1/2 or four years with five different brokers,” Osher says.

But shortly after taking it over earlier this year, Core had multiple offers above the asking price. The property went to contract for just under $7 million.

“The difference between now and two years ago is that two years ago the frenzy existed on any property anywhere,” says Pam Liebman, president and CEO of the Corcoran Group. “Today, it’s more of a focused frenzy. It’s really if your property is special, if it offers something unique . . . But where the frenzy exists, it’s just as strong as it was two years ago, and several brokers have told me it’s stronger.”

In the last year, the Corcoran Group saw a 31 percent price increase on lofts larger than 2,500 square feet. Prudential Douglas Elliman saw the price for apartments with four or more bedrooms jump 24.8 percent to an astronomical $8,957,570. And Brown Harris Stevens saw the average price per square foot for apartments with four or more bedrooms soar to $2,208. Last year, it was $1,615.

And if what’s happened in the last few months is any indication, those numbers are moving even higher.

“In December and January . . . we started [telling clients], ‘You have to be prepared to go 5 percent above asking price to get what you want,’” says Frederick Peters, president of Warburg Realty. “Then, more recently, we’ve been saying you have to go 10 percent. Just in the last couple of weeks, a few things have been more like 15 percent.”

“I just won a bid at 158 Mercer,” says Dolly Lenz, vice chairman of Prudential Douglas Elliman. “And the people just had to have it. They said ‘Whatever it takes.’ It was going for $8.9 million, they made an offer of $10 million. They just wanted to be sure it was theirs.”

Sellers have felt free to chuck an accepted offer in favor of a better one. Or they have made lavish demands like a 30 percent down payment. Immediately. In cash. Getting half a million dollars or even $1 million over the asking price is not so unusual.

And new condos like French architect’s Jean Nouvel’s 100 11th Ave. in West Chelsea have started out of the gate asking for $2,000 per square foot. This should hardly come as a surprise; Nouvel’s SoHo building, 40 Mercer, sold out with many units going for significantly more than $2,000 per square foot.
“If you have a three-bedroom in SoHo or TriBeCa,” says broker Darren Sukenik, an executive vice president at Prudential Douglas Elliman, “you can just make up a price and it will sell.”

“My heart is breaking for this one couple I have who have lost so many bidding wars,” says broker Wendy Maitland, a senior vice president at Brown Harris Stevens. “Every single loft that’s a good family loft in the West Village they’ve bid on and they keep getting outbid.”

And the frenzy is hardly limited to the super-trendy neighborhoods. A 3,721-square-foot penthouse above 100th Street listed by the Corcoran Group’s Deanna Kory and Karen Kelley, in a building with no doorman, sold for $4.95 million after just three days on the market.

Anecdotes aside, one can see this major uptick borne out by statistics.

According to real-estate appraiser Jonathan Miller of Miller Samuel, the average price per square foot of the top 10 percent of Manhattan apartments was $1,744 in the first quarter of this year - up 13 percent from the same quarter last year.

“The higher level of sales have really eaten into inventory,” says Miller, “especially at the high end of the market.”

And with less inventory, prices could continue to rise for a while.

How, exactly, did this happen? Part of it obviously has to do with the record $33 billion in bonuses on Wall Street last year. Another part has to do with how weak the dollar has been.

“There’s a ton of foreign money,” says Sukenik. “For Europeans, it’s like a 35-percent-off sale - a lot of these are foreign ego apartments.”

And Peters thinks it has something to with the fact that most potential buyers who stayed out of the market last year are simply tired of waiting around.

“No buyer wants to be the last person to pay a big price before the market goes south,” Peters says, “And people were apprehensive about how they were not going to be the last one to pay a lot. So you saw a lot of people sidelining themselves in ’06.”

But, Peters adds, “Successful people have only a limited tolerance for delayed gratification, and I think the tolerance was exhausted by the end of 2006. Maybe they got that big bonus and said, ‘You know what, we waited, the market didn’t go south and we’ve got to go on with our lives.’”

Also, it might have something to do with the fact that the suburbs are becoming a less attractive alternative for workaholic families.

“One of the things that’s really driven our boom has been the fact that moving to the suburbs was always predicated on a 9-to-5 work day,” says Peters. “Nobody has one of those anymore. If you’re working 9-to-8, adding a two-hour commute really affects the shape of your day, it affects spending time with your family, and I think that’s an influential factor for a lot of people to stay in the city.”

“People who used to buy in Armonk or Scarsdale or Greenwich . . . [now] want New York because it’s convenient for both parents,” says Sukenik.

Another part of the surge has been that despite all the new construction, there is surprisingly limited inventory for big apartments.

“There’s a really good supply of two-bedrooms that have been selling quickly, but developers didn’t want to develop too many large luxury products,” says Osher. “Basically, they didn’t want to put all their eggs in one basket. Luxury was kind of ignored by developers.”

“When we did the Time Warner Center and were offering 8,000-square-foot penthouses, people thought we were crazy,” says David Wine, vice chairman of the Related Companies. “But we saw the demand. You can get a tremendous amount of money from people with large families - well, wealthy families, not necessarily large. But they’re demanding the space.”

Does this mean that the era of the big buildings filled with small studios is coming to an end?

“We’ve thought about [designing bigger apartments], but we’re not sure if we’re going to do it,” says Elad Dror, director of residential property for the Moinian Group, developer of buildings like the Atelier, where buyers can use their American Express card for their down payment. (Think of the miles!) “There’s still a demand for more efficient-sized homes in the city ... If the market turns, we don’t want to be stuck with four-bedrooms. You’re better off with one-bedrooms.”

And Dror has seen why: If buyers can’t get a four-bedroom, they’ll just buy three apartments next to one another and build their own.

“I saw someone come into the Atelier and try to buy eight apartments - six two-bedrooms, and two one-bedrooms,” says Dror.

Despite the demand, developers like Related and Moinian aren’t rushing out to build complexes with 300 multimillion-dollar units. For many, this latest market move doesn’t feel like irrational exuberance. It feels more sustainable than what happened two years ago.

“I see right now a much more stable market,” says broker Jacky Teplitzky, an executive vice president at Prudential Douglas Elliman. “A crazy market is much more dangerous.”
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Playing the Waiting Game Two-bedroom penthouse, for sale, cheap! Unbudgeable tenants included. By S.Jhoanna Robledo  (Photo: William Mebane) April 16, 2007-- There’s nothing wrong with the spacious,…... Read more >

Playing the Waiting Game
Two-bedroom penthouse, for sale, cheap! Unbudgeable tenants included.
By S.Jhoanna Robledo 

(Photo: William Mebane)
April 16, 2007-- There’s nothing wrong with the spacious, bright apartment at 328 West 86th Street. So why is it priced at $549,000, barely half what it’s worth? You can buy it, but you can’t move in. The current occupants have a rent-controlled lease, and they can stay put for as long as they pay the bill. Which means a ghoulish calculation: “You pretty much have to wait for them to pass away, which could take five years or 30,” says listing agent Ray Kiswani of Bellmarc Realty.

For the very patient, an “encumbered” apartment can be a rare bargain. How else could one get a two-bedroom Sutton Place penthouse for less than a million? “The payoff is really terrific!” says Prudential Douglas Elliman agent Jerri Sherman, who’s representing two such apartments on West 13th. Of course, doing so “absolutely doesn’t make any sense for the typical buyer,” says Frederick Peters, president of Warburg Realty. Those old leases aren’t likely to cover the mortgage, let alone monthly charges. (The lucky soul in the Sutton Place penthouse pays $1,080 a month; the maintenance is $1,900.) These purchases are considered investments, which require commercial loans with higher interest rates than standard mortgages. You can try buying out the tenants, but they usually say no, says developer Andy Field, who co-owns the West 86th Street apartment.

How do you figure the price? It depends on three assumptions: how long the resident will stick around, what the real-estate market will do over that time, and what real dollars will do as well. Let’s say you think you’ll take possession in twenty years, and assume a 5 percent annual increase in the market, and expect a 10 percent compounded return on the investment—all decent guesses. An apartment that would ordinarily be priced at $500,000 today will, under those conditions, be worth $1.32 million twenty years hence. That amount, calculated backward into today’s dollars, with a risk factor calculated in, is about $200,000, which is how much you should offer.* Suggest less if your tenant jogs, and more if he or she loves bacon.

You also need to remember that you’ll pay any difference between the tenant’s rent and the maintenance fees. And remember that you’re gambling: If rent-control or -stabilization laws change radically, or if the lease is about to be destabilized, all your computations go south. (On the upside, there’s that luxury-decontrol clause: If your tenant makes over $175,000 for two years in a row and the rent edges past $2,000, you get to hike it as high as you want.)

All-cash buyers are the best candidates, because they can park money in these properties, treating them like a 401(k), says Kiswani.  No matter what kind of buyer you are, though, Peters says, you’re still betting that real estate will continue to appreciate. Besides, “in the event your analysis goes awry, it could be a very expensive mistake. Actuarial tables aside, your 90-year-old tenant could live to 105.”
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March 2007 Open houses become full houses By Lauren Elkies Heavily attended open houses are the place to be in Manhattan, and the constant crowds are more evidence that the residential market is resurgent.…... Read more >

March 2007
Open houses become full houses

By Lauren Elkies
Heavily attended open houses are the place to be in Manhattan, and the constant crowds are more evidence that the residential market is resurgent.

They "are mobbed, with 50 people, 70 people," said Frederick Peters, president of Warburg Realty Partnership.

Some people say that an unusually warm winter has spurred more open-house activity.

But Peters does not subscribe to the seasonality argument. He said he has seen as many people frequenting open houses on bitterly cold days as on warmer ones. Any connection between weather and real estate is merely a correlation, he said.

Nellie Wilson, a senior associate in the Carnegie Hill office of the Corcoran Group, said buyer interest is once again resulting in bidding wars.

"We've had very, very active open houses and some of those visits have resulted in offers," Wilson said.

"We're beginning to see a bidding war" climate, although not like the same frenzy of a year and a half ago, she said.

The recent spurt of activity follows a long stretch of inactivity that began in the second quarter of 2005, when potential buyers waited on the sidelines -- in many cases opting to rent -- for prices to drop.

Starting in November, sellers started pricing their apartments more realistically, real estate pros said.

"Buyers and sellers have finally come onto the same page," said Kathy Braddock, co-founder of real estate consulting firm Braddock + Purcell and the New York City real estate company Charles Rutenberg Realty.

A stable economy, good wages, flat interest rates, the Nov. 7 Congressional election and buzz about record Wall Street bonuses reignited interest in the market.

It's those buyers, partly, that waited out the market by renting who are attending the open houses.

"[They are the ones] soaking up the sales inventory," said Jeffrey Jackson, co-founder of appraisal firm Mitchell, Maxwell & Jackson.

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March 2007 Call it a comeback Slowdown gives way to boom as NYC's residential market rebounds By Stuart W. Elliott   To paraphrase Mark Twain, the rumors of the death of New York City's residential…... Read more >

March 2007
Call it a comeback
Slowdown gives way to boom as NYC's residential market rebounds

By Stuart W. Elliott
 
To paraphrase Mark Twain, the rumors of the death of New York City's residential market were greatly exaggerated.

After a year-and-a-half slowdown, apartment sales have clearly sprung back to life -- part of a revitalized bull market where open houses are crowded once again.

This month, a spring roundup by The Real Deal takes a look at the new environment from multiple angles -- at the change in pricing that has helped sellers lure buyers, how New York City stacks up against the national market (favorably), the best and worst case scenarios going forward, as well as the prospect for a new condo development glut now.

A strong fourth quarter of 2006 -- when the market came back to life, with a jump in sales and a sharp drop in homes on the market -- was followed by more strong sales activity in January, up 20 percent from the same time a year prior, according to Miller Samuel appraisers.

Bidding wars are back, brokers say, and the uptick is clearly visible at open houses.

They "are mobbed, with 50 people, 70 people," said Frederick Peters, president of Warburg Realty Partnership.

Stacking us up against the national market, New York City's unique position comes into greater relief.

Nationwide, the median sales price of a home inched up only 1.1 percent in 2006, according to the National Association of Realtors.

In Manhattan, the median sales price for an apartment was up nearly 10 times that amount. Prices were 10.7 higher in 2006 compared to 2005, even though sales were generally slow for most of the year because buyers didn't want to pay high prices.

Sellers have been pricing properties more competitively in recent months, and because sellers are lowering their prices, buyers appear to be taking the bait. But pricing discounts could be on the way out again, as a study by property listing Web site Streeteasy.com found.

Still, there are some storm clouds on the horizon, including a rising number of foreclosures and more new development coming on the market, which could cause oversupply and drag down prices. The stock market and economy are another concern.

Not everyone is a believer that New York is immune from the general national slowdown. For some, the revival may be short-lived. "New York is the anomaly," said Barry Hersh, associate director of the Steven L. Newman Real Estate Institute at Baruch College. "I just think it won't continue to soar while the rest of the country is going down. How can New York be an island?"

 

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The Real Deal March 2007 Will this rise be followed by a fall? By Lauren Elkies What goes up must come down, so the proverb goes. If that's the case with New York's real estate market, experts…... Read more >

The Real Deal
March 2007
Will this rise be followed by a fall?

By Lauren Elkies
What goes up must come down, so the proverb goes. If that's the case with New York's real estate market, experts are wondering whether the recent residential sales revival is only a brief pause on a downward slide that pulls the city into line with the rest of the country.

The market is also watching whether the amount of new development coming online will play a part in a decline.

"Right now we're seeing fairly robust activity, more than we did last year at this time, and that's contrary to a large portion of real estate markets in the rest of the country," said Jonathan Miller, president and CEO of Manhattan appraisal firm Miller Samuel.

Barry Hersh, associate director of the Steven L. Newman Real Estate Institute at Baruch College, said the pace inevitably will slow down again.

"New York is the anomaly," Hersh said. "I just think it won't continue to soar while the rest of the country is going down. How can New York be an island?"

Some market observers have warned that new condominium development could result in a glut, with an oversupply of units driving prices down. The number of construction permits issued for residential units in the city in 2005 and 2006 was the highest for any two-year period since 1965, and many of those projects are coming to completion now. Despite the slowdown in the market in the past year, only 2.1 percent fewer permits were issued in 2006 than in 2005, according to U.S. Census Bureau figures.

But Frederick Peters, president of Warburg Realty Partnership, doesn't think there is a problem.

Market saturation is unlikely because fewer new developments are coming online now than near the end of last year, he said.

"It looked more gluttish probably in September and October of '06 than it does now," Peters said.

Kathy Braddock, co-founder of real estate consulting firm Braddock + Purcell and the New York real estate company Charles Rutenberg Realty, said, "There are more than enough people out there that are interested in buying."

Still, by historical levels, condo inventory is high.

Between 2000 and 2006, condo inventory grew by 83 percent, Miller Samuel found. The number of available co-ops rose only a modest 8 percent during that time period.

Last month, there were practically the same number of condos on the market as co-ops, despite the fact that there are three times more existing co-ops in Manhattan than condos.

Looking at both condos and co-ops, overall inventory has been generally shrinking recently, but it is a far cry from the lower availability seen over the last six years.

February 2007 inventory was still higher than February 2001, 2002, 2004 and 2005, and just below the number in February 2003, according to Miller Samuel.

On the other hand, the absorption rate, which is a good barometer of the market, was 7.3 months in the fourth quarter of 2006, according to appraisal firm Mitchell, Maxwell & Jackson, a positive drop from the 10-month rate seen in prior fourth quarters.

"When inventory is above eight months you are in an oversupply situation and prices start to come down," said Jeffrey Jackson, co-founder of Mitchell, Maxwell & Jackson.

Others remain bullish on the future of the developments soon to hit the market.

Because of the volume of interest, at least two of the 10 new developments Warburg Realty Partnership is marketing -- one on the Upper East Side and one in Harlem -- are looking to raise prices, Peters said. Granted, the two projects are already almost sold out.

New development -- and the prospect of a condo glut -- will be hindered, also, because of the changes to the 421-a tax abatement program, to take effect at the end of the year.

"People are clearly taking a second and third look at their decisions to acquire a new site and are recalculating the numbers," said Steven Spinola, president of the Real Estate Board of New York.

Spinola estimates that that there will be 7 to 12 percent price growth this year.

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REAL ESTATE SHOWCASE: SPRING PREVIEW February 26, 2007 Point of View “New developments are hotter than ever,” says Frederick Peters, president of Warburg Realty Partnership. “But these…... Read more >

REAL ESTATE SHOWCASE: SPRING PREVIEW
February 26, 2007

Point of View





“New developments are hotter than ever,” says Frederick Peters, president of Warburg Realty Partnership. “But these days they seem less about over-the-top amenities and more about great design and relative value. A good example is our

Diamond House development on the Upper East Side where buyers are offered solid, well-designed family-size spaces at reasonable prices. At the end of the day, it’s the apartment that counts.”

 

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Market Overview Housing Bubble and Real Estate Market Tracker Posted on Feb 19th, 2007 Housing Market Heats Up Again in New York City Since the new year began, a burst of activity has broken out in Manhattan…... Read more >

Market Overview
Housing Bubble and Real Estate Market Tracker
Posted on Feb 19th, 2007

Housing Market Heats Up Again in New York City

Since the new year began, a burst of activity has broken out in Manhattan and several Brooklyn neighborhoods as New Yorkers frenetically hunt for co-ops, condominiums and town houses, sending prices higher despite sluggish sales in many other cities.

Preliminary indications from real estate firms showed that this increased activity, with open houses jammed and bidding wars taking place, has occurred in all price ranges — from tiny studios in the East Village to red-brick mansions on the Upper East Side — in counterpoint to the heavily weighted record sales of luxury properties that led the market in the late summer and fall.

Real estate brokers and statisticians are quick to point out that not every single apartment is flying into contract. During the last quarter of 2006, the major real estate agencies differed on which way prices were headed.

But now, the three largest real estate companies in the city agree: for January, at least, both prices and the number of signed contracts rose in double-digit percentages compared with the same month in 2006.

With higher Wall Street bonuses, a strong regional economy and pent-up demand from New Yorkers who were once worried that the city’s real estate market would crash, buyers’ attitudes have done an about-face. “Their psychology has changed,” said Frederick W. Peters, the president of the Warburg Realty Partnership. “For almost two years, they’ve been scared that the market would plummet and they’d end up like fools who paid too much.”

Real estate experts say they see no reason for the trend to not continue, with economists predicting stable mortgage rates and a continuing city budget surplus. However, other factors may alter New Yorkers’ renewed interest in buying real estate, including an expansion of the Iraq war, a changing employment picture or another terrorist attack.

Yet, there is “cautious exuberance,” according to Steven L. James, director of Manhattan sales for Prudential Douglas Elliman.

A week ago, one open house attracted 100 people to an Upper West Side one-bedroom; a $2.475 million house in the Park Slope neighborhood of Brooklyn sold in a day.

Across the board, the prices of Manhattan apartments are rising. Jonathan Miller, the president of Miller Samuel, an appraisal firm, said the number of contracts signed this January was 19.4 percent higher than in January 2006. Prices were up 14.4 percent in the same time period. Inventory, which was mounting last summer, is shrinking fast.

Now, according to Mr. Miller, statistics showed that sales of studio and one-bedroom units, stagnant over the past year, were up 13.7 percent in January. “It’s not like a lot of huge sales at the high end skewed the average up.”

According to a report released last week by the National Association of Realtors, prices are falling in many other metropolitan areas around the country. The report covered only the last quarter of 2006, and showed a modest increase of 3.1 percent for the New York area, which includes parts of northern New Jersey.

Anecdotally, there isn’t much talk of falling prices in Manhattan and in the most sought-after neighborhoods in Brooklyn, where young people looking for a break, empty nesters looking for a guest room and foreigners looking for a pied-à-terre say they want to live.

Katalin Shavely, a 30-year-old bedding designer in Manhattan, devotes her weekends to scanning the classifieds and attending open houses, searching for just the right one-bedroom apartment for less than $750,000. She can’t find it. “I made a mistake,” she said last week. “I should have started looking before Thanksgiving.”

Mr. Miller said New Yorkers had been reluctant to buy because of the feeling of an impending crash. “Last summer, a lot of information was being dumped on the consumer: stories about the glut of condos in Miami, Washington, D.C., and Las Vegas, exacerbated by the constant debate on the blogosphere about housing bubbles, mixed together with a barrage of negative predictions,” he said in a telephone interview.

Although no one can pinpoint the moment when New Yorkers started feverishly buying again, Kirk Henckels, the director of the private brokerage division of Stribling & Associates, said he thought the luxury market picked up after Labor Day.

He and others said the resurgence was partly fueled by the fall’s record-setting (and well-publicized) sales of a few multimillion-dollar apartments and town houses, like the Stanford White limestone palazzo at 25 East 78th Street bought by Mayor Michael R. Bloomberg for $45 million and the Harkness mansion at 4 East 75th Street sold in October for $53 million.

Then came this year’s stratospheric Wall Street bonuses, and the market exploded, real estate executives said.

“The plunger that freed up all the hesitation at all price levels was those bonuses,” said Diane Ramirez, the president of Halstead Property. “It cleaned the pipes and gave confidence to even small apartment buyers.”

Within the last month, the Corcoran Group, Halstead and Prudential Douglas Elliman, three of New York City’s largest real estate sales firms, say they have recorded double-digit increases in contract prices and in the number of transactions.

In a real estate market where 18 and 22 percent price increases were recorded in 2004 and 2005, last year’s 6 percent increase was depressing, Mr. Miller said.

Pamela Liebman, the president of the Corcoran Group, reported that the company’s contracts for this January totaled $1.3 billion, an increase of 53 percent from January 2006.

Prices in many areas of Brooklyn are going up, too. According to Marc Garstein, the president of Warren Lewis Realty in Park Slope, prices in what he called the downtown neighborhoods — including Brooklyn Heights, Park Slope, Carroll Gardens, Cobble Hill, Prospect Heights and Windsor Terrace — are now approaching 2004 highs, after being off about 10 percent in the last two years.

A town house at 171 Garfield Place in Park Slope, priced at $2,475,000, sold for the asking price one day after it was put on the market. Fifty people had shown up at the open house, Mr. Garstein said.
Customers said they had expected a buyer’s market in which they could call the shots, but found a race track, instead.

Jane LaFarge Hamill, a 25-year-old painter who lives in a “small, kind of stinky” studio in Chinatown, said she had looked at 60 apartments over three months, trying to take advantage of the lull she had noticed. “We decided to look while sellers were still worried that the market was crashing,” she said.

When she started looking last fall, there was still “wiggle room,” she said. But now, there is frenzy, said her mother, Leita Hamill, who, with her husband, Bill, is helping her daughter search for and buy a new home. The Hamills had gotten into a bidding war, one of many reported by brokers these days, for a two-bedroom co-op in Gramercy Park. They had started bidding above the asking price, but it wasn’t enough.
“There were people bidding on the apartment sight-unseen,” Mrs. Hamill said. The victors got the co-op through a sealed bid, she said. “It was like a pair of shoes that you absolutely had to have,” she said.
Real estate executives say they do not know how long the market’s heat will be turned up, although they say the regional economy looks strong.

They also say that the first two quarters of the year — the spring market — are traditionally stronger than the last two. Thus, the average for the whole of 2007 may or may not show the double-digit growth that the first part of the year is showing. “It’s all about price now,” Ms. Ramirez said. “The market is not in a spike mode, when anything, for any price, will sell.”

Ms. Ramirez, who has sold real estate for more than 30 years, said she expected that the current rocketing growth would be followed by a period of slower yet steady increases. “I don’t want to hear, ‘Oh my gosh, the market is slowing up again,’ ” she said. “With the number of deals we had last week, it has to calm down. But I feel much more confident than at any time in the last five years when the market had fits and starts and there was always a certain underlying nervousness.”

Toward the end of 2004, the real estate market in the city was booming. But then, brokers started seeing “great concern among clients that mortgage rates were about to jump and that house prices would suffer a sharp correction,” Mr. Miller said.

Since then, there has been change of leadership in Congress, Mr. Miller noted. In the region, unemployment has dropped. Mortgage rates didn’t soar. “Two years ago, we were predicting they’d be up to 8 percent now,” he said. (Rates for a 30-year fixed loan on a New York City co-op hover around 6.25 percent, according to the Manhattan Mortgage Company.)

After months of trying to push shoppers over the edge of indecision, brokers now say they spend time warning house hunters not to rush in heedlessly — advice the would-be buyers don’t always listen to.
“When my wife and I got into the market in mid-December, people told me there was a glut of one-bedroom apartments and I could take my time,” said Shelly Cohen, 51, an empty-nester. “When we actually got into the market, I found it was just the opposite.” He just found a newly created condominium in a beige brick high-rise at 1438 Third Avenue at 81st Street and quickly signed the contract. He said he felt he had to.

Mrs. Hamill, the mother of the young artist in Chinatown, offers her own advice to friends.
“Now I tell everybody: Be ready to write the check the minute you see something you love,” she said. “If it’s any good, it’ll be gone by the next day.” She paused. “Or, even by that same day.”

 

 

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Bucking nationwide trend, New York City  housing market hot again The Associated Press Monday, February 19, 2007 NEW YORK: New York City's housing market is hot again in spite of a tepid market…... Read more >

Bucking nationwide trend, New York City  housing market hot again

The Associated Press
Monday, February 19, 2007

NEW YORK: New York City's housing market is hot again in spite of a tepid market in many other urban areas around the U.S., according to preliminary indications from real estate firms, The New York Times reported in Monday's edition.

Droves of people are hunting for co-ops, condominiums and townhouses in New York City, sending prices higher, sparking bidding wars and jamming open houses, the newspaper said.
Both prices and the number of signed contracts rose in double-digit percentages compared with the same month in 2006, according to the city's three largest real estate companies.

Experts pointed to higher Wall Street bonuses, a strong regional economy and pent-up demand for the hotter-than-hot market. "For almost two years, they've been scared that the market would plummet and they'd end up like fools who paid too much," said Frederick W. Peters, the president of the Warburg Realty Partnership.

The market is hot across price ranges — from studios in the East Village to mansions on the Upper East Side.

A report released last week by the National Association of Realtors showed that prices were falling in many metropolitan areas around the country.

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February 19, 2007 Housing Market Heats Up Again in New York City By TRACIE ROZHON Since the new year began, a burst of activity has broken out in Manhattan and several Brooklyn neighborhoods as New Yorkers…... Read more >

February 19, 2007
Housing Market Heats Up Again in New York City
By TRACIE ROZHON

Since the new year began, a burst of activity has broken out in Manhattan and several Brooklyn neighborhoods as New Yorkers frenetically hunt for co-ops, condominiums and town houses, sending prices higher despite sluggish sales in many other cities.

Preliminary indications from real estate firms showed that this increased activity, with open houses jammed and bidding wars taking place, has occurred in all price ranges — from tiny studios in the East Village to red-brick mansions on the Upper East Side — in counterpoint to the heavily weighted record sales of luxury properties that led the market in the late summer and fall.

Real estate brokers and statisticians are quick to point out that not every single apartment is flying into contract. During the last quarter of 2006, the major real estate agencies differed on which way prices were headed.

But now, the three largest real estate companies in the city agree: for January, at least, both prices and the number of signed contracts rose in double-digit percentages compared with the same month in 2006.

With higher Wall Street bonuses, a strong regional economy and pent-up demand from New Yorkers who were once worried that the city’s real estate market would crash, buyers’ attitudes have done an about-face. “Their psychology has changed,” said Frederick W. Peters, the president of the Warburg Realty Partnership. “For almost two years, they’ve been scared that the market would plummet and they’d end up like fools who paid too much.”

Real estate experts say they see no reason for the trend to not continue, with economists predicting stable mortgage rates and a continuing city budget surplus. However, other factors may alter New Yorkers’ renewed interest in buying real estate, including an expansion of the Iraq war, a changing employment picture or another terrorist attack.

Yet, there is “cautious exuberance,” according to Steven L. James, director of Manhattan sales for Prudential Douglas Elliman.

A week ago, one open house attracted 100 people to an Upper West Side one-bedroom; a $2.475 million house in the Park Slope neighborhood of Brooklyn sold in a day.
Across the board, the prices of Manhattan apartments are rising. Jonathan Miller, the president of Miller Samuel, an appraisal firm, said the number of contracts signed this January was 19.4 percent higher than in January 2006. Prices were up 14.4 percent in the same time period. Inventory, which was mounting last summer, is shrinking fast.

Now, according to Mr. Miller, statistics showed that sales of studio and one-bedroom units, stagnant over the past year, were up 13.7 percent in January. “It’s not like a lot of huge sales at the high end skewed the average up.”

According to a report released last week by the National Association of Realtors, prices are falling in many other metropolitan areas around the country. The report covered only the last quarter of 2006, and showed a modest increase of 3.1 percent for the New York area, which includes parts of northern New Jersey.

Anecdotally, there isn’t much talk of falling prices in Manhattan and in the most sought-after neighborhoods in Brooklyn, where young people looking for a break, empty nesters looking for a guest room and foreigners looking for a pied-à-terre say they want to live.

Katalin Shavely, a 30-year-old bedding designer in Manhattan, devotes her weekends to scanning the classifieds and attending open houses, searching for just the right one-bedroom apartment for less than $750,000. She can’t find it. “I made a mistake,” she said last week. “I should have started looking before Thanksgiving.”

Mr. Miller said New Yorkers had been reluctant to buy because of the feeling of an impending crash. “Last summer, a lot of information was being dumped on the consumer: stories about the glut of condos in Miami, Washington, D.C., and Las Vegas, exacerbated by the constant debate on the blogosphere about housing bubbles, mixed together with a barrage of negative predictions,” he said in a telephone interview.

Although no one can pinpoint the moment when New Yorkers started feverishly buying again, Kirk Henckels, the director of the private brokerage division of Stribling & Associates, said he thought the luxury market picked up after Labor Day.

He and others said the resurgence was partly fueled by the fall’s record-setting (and well-publicized) sales of a few multimillion-dollar apartments and town houses, like the Stanford White limestone palazzo at 25 East 78th Street bought by Mayor Michael R. Bloomberg for $45 million and the Harkness mansion at 4 East 75th Street sold in October for $53 million.

Then came this year’s stratospheric Wall Street bonuses, and the market exploded, real estate executives said.

“The plunger that freed up all the hesitation at all price levels was those bonuses,” said Diane Ramirez, the president of Halstead Property. “It cleaned the pipes and gave confidence to even small apartment buyers.”

Within the last month, the Corcoran Group, Halstead and Prudential Douglas Elliman, three of New York City’s largest real estate sales firms, say they have recorded double-digit increases in contract prices and in the number of transactions.

In a real estate market where 18 and 22 percent price increases were recorded in 2004 and 2005, last year’s 6 percent increase was depressing, Mr. Miller said.

Pamela Liebman, the president of the Corcoran Group, reported that the company’s contracts for this January totaled $1.3 billion, an increase of 53 percent from January 2006.

Prices in many areas of Brooklyn are going up, too. According to Marc Garstein, the president of Warren Lewis Realty in Park Slope, prices in what he called the downtown neighborhoods — including Brooklyn Heights, Park Slope, Carroll Gardens, Cobble Hill, Prospect Heights and Windsor Terrace — are now approaching 2004 highs, after being off about 10 percent in the last two years.

A town house at 171 Garfield Place in Park Slope, priced at $2,475,000, sold for the asking price one day after it was put on the market. Fifty people had shown up at the open house, Mr. Garstein said.
Customers said they had expected a buyer’s market in which they could call the shots, but found a race track, instead.

Jane LaFarge Hamill, a 25-year-old painter who lives in a “small, kind of stinky” studio in Chinatown, said she had looked at 60 apartments over three months, trying to take advantage of the lull she had noticed. “We decided to look while sellers were still worried that the market was crashing,” she said.

When she started looking last fall, there was still “wiggle room,” she said. But now, there is frenzy, said her mother, Leita Hamill, who, with her husband, Bill, is helping her daughter search for and buy a new home. The Hamills had gotten into a bidding war, one of many reported by brokers these days, for a two-bedroom co-op in Gramercy Park. They had started bidding above the asking price, but it wasn’t enough.
“There were people bidding on the apartment sight-unseen,” Mrs. Hamill said. The victors got the co-op through a sealed bid, she said. “It was like a pair of shoes that you absolutely had to have,” she said.
Real estate executives say they do not know how long the market’s heat will be turned up, although they say the regional economy looks strong.

They also say that the first two quarters of the year — the spring market — are traditionally stronger than the last two. Thus, the average for the whole of 2007 may or may not show the double-digit growth that the first part of the year is showing. “It’s all about price now,” Ms. Ramirez said. “The market is not in a spike mode, when anything, for any price, will sell.”

Ms. Ramirez, who has sold real estate for more than 30 years, said she expected that the current rocketing growth would be followed by a period of slower yet steady increases. “I don’t want to hear, ‘Oh my gosh, the market is slowing up again,’ ” she said. “With the number of deals we had last week, it has to calm down. But I feel much more confident than at any time in the last five years when the market had fits and starts and there was always a certain underlying nervousness.”

Toward the end of 2004, the real estate market in the city was booming. But then, brokers started seeing “great concern among clients that mortgage rates were about to jump and that house prices would suffer a sharp correction,” Mr. Miller said.

Since then, there has been change of leadership in Congress, Mr. Miller noted. In the region, unemployment has dropped. Mortgage rates didn’t soar. “Two years ago, we were predicting they’d be up to 8 percent now,” he said. (Rates for a 30-year fixed loan on a New York City co-op hover around 6.25 percent, according to the Manhattan Mortgage Company.)

After months of trying to push shoppers over the edge of indecision, brokers now say they spend time warning house hunters not to rush in heedlessly — advice the would-be buyers don’t always listen to.
“When my wife and I got into the market in mid-December, people told me there was a glut of one-bedroom apartments and I could take my time,” said Shelly Cohen, 51, an empty-nester. “When we actually got into the market, I found it was just the opposite.” He just found a newly created condominium in a beige brick high-rise at 1438 Third Avenue at 81st Street and quickly signed the contract. He said he felt he had to.

Mrs. Hamill, the mother of the young artist in Chinatown, offers her own advice to friends.
“Now I tell everybody: Be ready to write the check the minute you see something you love,” she said. “If it’s any good, it’ll be gone by the next day.” She paused. “Or, even by that same day.”
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United Press International News. Analysis. Insight. February 18, 2007 Sunday 10:37 PM EST Housing sales spike in New York Real estate sales -- and property values -- are rising in New York so far in 2007,…... Read more >

United Press International
News. Analysis. Insight.
February 18, 2007 Sunday 10:37 PM EST

Housing sales spike in New York
Real estate sales -- and property values -- are rising in New York so far in 2007, at a time when sales are sluggish in many other cities.

Sales activity is spiking in Manhattan and several Brooklyn neighborhoods, as New Yorkers step up the hunt for co-ops, condominiums and town houses, The New York Times reported.
Real estate firms say the activity -- which features well-attended open houses and even some bidding wars -- has occurred across all price ranges.

During the fourth quarter of 2006, the newspaper said, major real estate companies differed on which direction the market was taking. Now, however, the three largest real estate companies in New York agree that in January, there was a double-digit increase over the same month in 2006, both in prices and the number of signed contracts.

The increase is being attributed to factors including a strong regional economy, pent-up demand and higher year-end bonuses on Wall Street.

Frederick W. Peters, president of the Warburg Realty Partnership, said homebuyers' psychology has changed.

"For almost two years, they've been scared that the market would plummet and they'd end up like fools who paid too much," he said.

 

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February 18, 2007 The Psychology of Pricing By TERI KARUSH ROGERS IN a market where buyers and sellers circle one another warily — each certain that he or she is being taken advantage of, no matter…... Read more >

February 18, 2007
The Psychology of Pricing
By TERI KARUSH ROGERS

IN a market where buyers and sellers circle one another warily — each certain that he or she is being taken advantage of, no matter what the conclusion of a deal — the asking price of a property is rarely a straightforward reflection of comparable values. While comparables may be a starting point, the price at which a seller offers a property is often also based on wishful thinking, propaganda and ploy.

Buyers, in turn, parry by deconstructing the price. They aim not merely to assess a dwelling’s fair value but also to plumb a seller’s bottom line and vulnerabilities. How a price tracks with similar properties, how large and hasty any reduction is, and even how parsed or rounded a number is — all these are grist for concluding, rightly or not, whether a price is firm, desperate or a sign of painful dealings to come.

Or even a sign of delusion.

Despite whispering advice like courtiers into the ear of a monarch, brokers say some sellers have delusions of grandeur, stemming from a failure to grasp that what they want for their home has nothing to do with what it’s worth.

“Most of the time a seller will start to talk about what they want, and I will say, ‘I don’t care — don’t tell me,’ ” said Andrew M. Phillips, a senior vice president of Halstead Property, who teaches classes on pricing to Halstead agents. “I will do my analysis and come back to you with quantitative information.”

Even when the seller and broker reach an agreement on a home’s value, it is often wise to adjust the asking price downward, and not just because buyers like bargains.

An equally compelling reason to fly low is to adhere to psychological “break points.” These are dollar thresholds that buyers are most likely to select as the top amounts they are initially willing to spend or to use in Internet searches.

(“Initially” is the key. Once buyers set foot in a house or apartment and make an emotional connection to it, they are more vulnerable to budget creep, by which a $25,000 increase can be rationalized as a little bump of $30 or $40 a month in the mortgage.)

Major break points occur at $500,000, $1 million, $1.5 million and so forth. Smaller ones occur every $100,000 and then at every $20,000 or $25,000. So, for example, if the market value of an apartment is around $610,000, brokers generally advise sellers to round down to $600,000 so that the property lands within a buyer’s budgetarily myopic field of vision.

(For each type of apartment, there are other contextual break points. For example, Mr. Phillips noted, many studio buyers say they won’t look at anything over $300,000, while buyers of small one-bedrooms often hover below $500,000 and, for larger one-bedrooms, below $750,000.)

Many brokers tweak break points even further, counseling their clients to name a price just under a break point — for example, choosing $599,000 rather than $600,000. While buyers intellectually recognize the lack of meaningful difference, the lower amount is said to appeal on a less conscious level. (It works in reverse, too: buyers in a bidding war are often counseled to offer an amount just above the next break point.)

“I always joke with people that I’m a department store pricer, because I think that psychologically the first number has an impact,” said Frederick W. Peters, the president of Warburg Realty. “Even though it may seem cheesy, it actually works.”

As an example, Mr. Peters said that it’s wiser to price a property at $4.995 million if it’s worth $5 million. “People are influenced by the first number,” he said, adding, “It’s the 4 that influences the way they perceive the price. Also, if you stay under a threshold, you are going to be found by more computer searches.”

Barbara Fox, the president of Fox Residential Group, suggests pricing a property slightly below a threshold but a little higher — say, 5 percent — than its market value. “Everybody likes to be able to negotiate a little bit,” she said.

Some brokers reject the relatively common $99 or even 99-cent endings. They argue that marching to a more distinctive rhythm — like $487,500 instead of $499,000 — may not only sweep aside listing clutter but also telegraph that the asking price has been so carefully calculated as to be nonnegotiable, assuming that is the desired message.

Theoretically, with a carefully calculated figure, “the power would be much more on the seller’s side in terms of a negotiating position,” said Joan Sacks, an associate broker at Stribling & Associates, “whereas when you get to the more typical type of pricing, rounded numbers, like $995,000 or whatever, the instant perception is that this is just the first asking price.”

A highly specific price reduction that follows a rounded original listing price may lead some buyers to more strongly infer nonnegotiability, which may or may not be the seller’s intention. But affixing a truly oddball number can also send that message.

“I’ve seen prices like $433,779,” said James Lake, a vice president of Bellmarc Realty. “It indicates it’s going to be a difficult transaction from beginning to end.”

Ms. Sacks agreed. “That would be a real turnoff,” she said. “Then, you’re talking about someone who’s going to be arguing about leaving a curtain rod.”

Even if round numbers invite negotiation, proponents say, they are more effective than fractional ones because soliciting bids of any amount is exactly the point, leading to snowballing and competing interest. (An exception: dwellings valued around $1 million. In New York and other states where buyers of properties priced at $1 million and higher pay a “mansion tax” of 1 percent of the purchase price, a listing of $999,999 is a better choice than $1 million.)

Using round numbers that catapult a listing to the top of a break point may confer an additional, subtle psychological advantage merely by being the first to trot onto the stage after an online search.

“The higher up you show up in the search engines, the better off you seem,” said Ravi Dhar, a professor of marketing and management at Yale and the director of the Yale Center for Customer Insights. He pointed to studies of voting habits that demonstrate a slight advantage to the candidate listed highest on the ballot. “The first few options you see are a reference point, a starting point, and all of the advantages of that apartment loom larger.”

Still, sellers are almost certainly at a disadvantage if their price towers over comparable properties’. Prices of more than 5 percent over the market will probably have a chilling effect on buyers, said Confidence Stimpson, a senior vice president at Stribling.

Sellers who think that buyers will simply show up and make their best offer do not understand how the market works. “The challenge is getting buyers to see it in the first place, because their broker is doing the search at $5 million, and you’re at $5.2 million,” Mr. Peters said.

The buyers who do see it, meanwhile, will be disposed to make negative comparisons with better endowed dwellings in the same price range. Even apartment hunters who like the place may shy away from making an offer at what they believe is a fair, but lower, amount.

“They feel like they’ll be rejected,” said Mr. Lake, “and they don’t want to be financially embarrassed.”

Sellers who have priced too high can still salvage the situation. Brokers say they must act quickly — ideally within a few weeks — and make sure there are buyers around to take notice. (“In July, a one-bedroom price drop will get activity, but a Classic 6 probably won’t because families are away,” Mr. Phillips said.)

Second, to be effective, the lower price must tempt a whole new group of buyers, which means slimming down to at least the next break point.

“Something dropping from $949,000 to $899,000 will suddenly show up on someone’s radar,” said Lisa Strobing, a Bellmarc executive vice president who teaches classes on pricing to agents.

For sellers already hovering just above a break point, the reduction can be small though psychologically significant, like going from $2.01 million to $1.95 million. But in general, Ms. Fox said, “small reductions are a waste of time.” She recommended whittling down by 5 to 10 percent, or more depending on the situation.

Of course, Mr. Phillips said: “A good broker will interpret certain things if a property’s been around for a month at $1.5 million, and then dropped by $100,000. If another couple of weeks go by and there’s no action, you will know a little bit of negotiation is possible there.”

Still, proper pruning can elicit a swift reaction.

Last February, Wendy Maitland, a vice president at the Corcoran Group, listed a client’s SoHo loft for $1.695 million, because her client “really wanted room to negotiate it.” The one-bedroom, two-bathroom co-op, which was newly renovated, languished for six months until the seller, motivated by a job transfer to London, dropped the price by $200,000, to $1.495 million. It went into contract for $1.48 million in October, less than two weeks after the reduction.

“In that case, it was a dramatic price drop because I didn’t want to drop it little by little,” Ms. Maitland explained. “It’s much more effective to do a one-time significant price correction than to drop something in dribs and drabs. It ends up staying on the market for too long and can become somewhat of a white elephant even if there’s nothing wrong with it at all.”

But problems can’t always be cured by price cuts alone.

Charlie Summers, a senior associate broker at Bellmarc, had a one-bedroom co-op in the Gramercy Park area listed last May at $499,000. “People looked at it as an overgrown studio, and we just couldn’t sell it,” he explained. Over the next six months, the sellers, Stacy Jessup, a 33-year-old accountant, and her husband, Cooper, a 33-year-old business analyst, dropped the price to $479,000 and then to $450,000, their bottom line all along. But they worried that buyers would bide their time waiting for further reductions. They knew from looking that that could happen.

“Sometimes you watch a place, and you see the price drop, and you think, ‘I’m not even going to look at it yet,’ ” Mrs. Jessup said.

Their concern seemed justified. “We still were getting nothing but nonserious offers,” Mr. Summers said. “People would smell blood, a stale listing and a desperate seller, and put in lowball offers like $360,000, $370,000.”

By December, with their first baby expected any day, the Jessups dropped the price to $399,000 and issued a public ultimatum with their listing: if their apartment didn’t sell by Dec. 20, they would take it off the market altogether.

“We were serious,” Mr. Jessup said. “We weren’t going to risk bringing all sorts of strange germs into an apartment with our baby there.”

The final two open houses, spaced two days apart, drew a total of 55 people, versus the meager turnout of 5 or 10 the previous showings had drawn.

“People could see it was obviously attracting a lot of attention, and their brokers were telling them it was underpriced so they should come in over the ask,” Mr. Summers said. “By that Wednesday I had collected six prequalified offers.” The apartment is in contract for substantially over the $399,000 asking price, and the Jessups, now the parents of a son, are house hunting on Long Island.

Like the Jessups, other sellers agonize that rather than whipping up buyers’ interest, cutting the price will dim a property’s luster and make them look desperate.

Professor Dhar suggested that some anxiety may be warranted.

“If we start getting a good deal on something, we always think, ‘Is there something wrong there?’ ” he explained. “It makes you look at the apartment through a more critical eye and notice the deficiencies, like buying products on sale in the marketplace.”

On the other hand, he said, “if you give people a reason why you’re dropping a price, then psychologically they interpret it differently.” Sellers could neutralize a buyer’s negative reaction, he suggested, by explaining that they were moving to another state.

As for brokers, many argue that seeming eager to sell — even if you aren’t — is a canny strategy.

“There’s always new infusions of people into the market, and it’s not like you’re soiled goods,” said Neil Binder, a principal in Bellmarc. “It would be good to let buyers perceive that you’re desperate so that they say, ‘Let’s run in and make a bid.’ I want to get a lot of people in there to develop a crescendo of activity and create a bidding war.”

Price reductions also work by making buyers feel more in control.

If, for example, an apartment is not drawing offers at $450,000, Mr. Summers said, then as a buyer, “you’re afraid to put in an offer for $410,000, possibly because you don’t see anyone else making offers, and you’re afraid you’re overpaying even at that price.”

 

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Playfuls.com - Targu Mures,Romania Housing Sales Spike In New York Real estate sales -- and property values -- are rising in New York so far in 2007, at a time when sales are sluggish in many other cities.…... Read more >

Playfuls.com - Targu Mures,Romania

Housing Sales Spike In New York

Real estate sales -- and property values -- are rising in New York so far in 2007, at a time when sales are sluggish in many other cities.
Sales activity is spiking in Manhattan and several Brooklyn neighborhoods, as New Yorkers step up the hunt for co-ops, condominiums and town houses, The New York Times reported.

Real estate firms say the activity -- which features well-attended open houses and even some bidding wars -- has occurred across all price ranges.

During the fourth quarter of 2006, the newspaper said, major real estate companies differed on which direction the market was taking. Now, however, the three largest real estate companies in New York agree that in January, there was a double-digit increase over the same month in 2006, both in prices and the number of signed contracts.

The increase is being attributed to factors including a strong regional economy, pent-up demand and higher year-end bonuses on Wall Street.

Frederick W. Peters, president of the Warburg Realty Partnership, said homebuyers' psychology has changed.

"For almost two years, they've been scared that the market would plummet and they'd end up like fools who paid too much," he said.

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February 2007 In post-boom, who's best and worst Harlem, Washington Heights top list of areas with largest gains By Lauren Elkies The first part of the winter in New York City was unseasonably warm. So…... Read more >

February 2007
In post-boom, who's best and worst
Harlem, Washington Heights top list of areas with largest gains

By Lauren Elkies
The first part of the winter in New York City was unseasonably warm. So was Manhattan's residential market in the last three months of 2006.

After a cooling-off period of more than a year as the housing boom receded, sales activity increased.

The uptick helped Manhattan's various neighborhoods, but not uniformly. The Real Deal looked at which areas have fared best and worst in the post-boom market, and found some wide variations in Manhattan's 16 neighborhood areas.

Upper Manhattan prices saw a bigger jump than any other section of Manhattan between the fourth quarter of 2005 and the fourth quarter of 2006, part of a decade-long rise in the area's fortunes.

Washington Heights experienced the largest percent increase in average apartment price, hitting $543,100 in the fourth quarter of 2006. Harlem and East Harlem saw the biggest rise in average price per square foot, which some brokers view as the most reliable yardstick of the market; it climbed 43 percent, from $474 to $678.

The price information was provided by the appraisal firm Miller Samuel, which cautioned that price data can fluctuate more widely for individual neighborhoods than for Manhattan as a whole, because there are fewer sales to form a comparative basis. Included below are charts showing the number of deals collected for each neighborhood.

The big Uptown increases come at a time when the average Manhattan price continues to edge up incrementally, rising 3.2 percent from the end of 2005 to the end of 2006.

"In Harlem, the neighborhood is improving, and the quality of the product that is available is improving," said Brett Grabel, an associate broker who works in the Harlem office of the Corcoran Group. "I think you can expect to see another increase."

Frederick Peters, president of Warburg Realty Partnership, which has an office in Harlem, said prices would likely keep climbing and would be positively affected by the small resale market.

"Inevitably, in a less mature market, people are more influenced by how people are pricing the units than the history of sales, because there is little history," Peters said.

After Washington Heights' 92.4 percent gain in average sales price over the last year, Hamilton and Morningside Heights finished second with a 42.6 percent rise.

While the gains may seem astronomical, they jibe with long-term trends in the area.

According to a 2005 report by Miller Samuel, median apartment prices in Uptown Manhattan rose 349 percent from 1995 to 2004, going from $68,000 to $305,000 -- twice as fast as in other parts of Manhattan.

Once-depressed sections of Downtown also saw a significant pickup in 2006, despite a slower overall residential market in Manhattan.

Co-op and condo prices in the Financial District climbed 21.5 percent for all of 2006 compared to all of 2005. (Full-year figures weren't included in the charts because not all neighborhood information could be obtained as of press time.)

Trendy Soho and Tribeca also notched large gains. Average prices for co-ops and condos were 20.9 percent higher in the fourth quarter of 2006 versus the fourth quarter of 2005. The average apartment price reached nearly $2.5 million, higher than in any other neighborhood. The high average price is also a function of the typical apartment size in loft-dominated Tribeca, which runs larger than apartments in other neighborhoods.

In last year's strong rental market, Soho and Tribeca fetched the highest average rents among Manhattan neighborhoods, too. According to Citi Habitats, fourth-quarter average rents for studios were $2,616; one-bedrooms hit $3,493; two-bedrooms, $5,079; and three-bedrooms came in at $8,772.

Warburg's Peters said differences between the neighborhoods were emerging: "I don't actually think they're really the same market anymore." Soho has remained steady, he said, but Tribeca has had a burst of activity.

Average prices per square foot were down in several prime neighborhoods, according to Miller Samuel. Between the fourth quarter of 2005 and 2006, the number dropped 2.3 percent in Chelsea, 2.6 percent in Greenwich Village, 2.8 percent on the Upper West Side, 2.9 percent in Midtown East/Turtle Bay and 3.9 percent on the Upper East Side.

For Manhattan as a whole, the average price per square foot was down 0.4 percent for the year, even while the average total price edged up a bit. The divergence between these two indicators was also seen with a number of neighborhoods, which may indicate that a few large sales drove up the average price while the average price per square foot remained unaffected.

Overall, the market ended the year on a positive note, with fourth-quarter sales up 55 percent compared to a year earlier, and inventory down, even if prices declined slightly for the quarter (see Big numbers bode well for '07).

"The increase was likely due to the expenditure of record Wall Street bonuses and the continuing rise of new development," said Jonathan Miller, president and CEO of Miller Samuel. "You'll see more of that."

The 2007 outlook for Manhattan real estate remains strong, and activity has been brisk since the beginning of December, said Peters.

Peters attributed price increases to the strength of the upper end of the market, which thrives on bonuses. "It's the luxury product that's bringing up the numbers," Peters said. The ripple effect of two consecutive years of record Wall Street bonuses will show up in the first two quarters of 2007, though Peters cautioned that "bonuses in and of themselves are not the only market driver."

 

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February 2007 Residential firms, from staid to splashy Manhattan brokers offer behind-the-scenes look at their office cultures By Lauren Elkies Anyone in the midst of a shop talk conversation knows…... Read more >

February 2007
Residential firms, from staid to splashy Manhattan brokers offer behind-the-scenes look at their office cultures

By Lauren Elkies
Anyone in the midst of a shop talk conversation knows that it's not just what you do that makes you happy; it's where you do it. New York real estate brokerages are as varied as the properties they represent, though some differences are more obvious than others.

The Real Deal talked to residential brokers and their bosses last month, conducting an unscientific survey that sought to explain how corporate culture reflects each firm's work. Questions ranged from dress codes to where they dine to how agents do business.

Our findings aren't set in stone, but the results helped The Real Deal divide the brokers into five different categories: Upper East Side boutique brokers that talk about how the rich -- often including the brokers themselves -- are different from the rest of us; the brokerage behemoths that dominate much of the market; the ranks of young, energetic rental brokers who are sometimes looked down on by their sales broker colleagues for their inexperience; mid-sized firms, some of which are more corporate and maintain mass market appeal, as well as others that are slightly more upscale; and Downtown boutique brokers that mirror their hip clients in Chelsea and farther south.

For the most part, the cultures of the firms mimic the demographic they serve -- Upper East Side brokers will dress and act like their clients and the same thing is true Downtown. Most brokerage executives touted their comfortable offices and low employee attrition rates. While the Uptown boutique firms said that they only hire people they know, mid-size and large companies recruit to help fill their ranks. Citi Habitats is the most aggressive recruiter, giving weekly pitches to students at New York Real Estate Institute.

Differences between brokers and management, and the vibe in a firm's offices, can affect the bottom line. A poisonous office culture can drive brokers away and repel top talent. A supportive and dynamic culture -- mostly conveyed through the firm's leadership -- motivates agents to get deals done.

But it's probably better to let the brokers and executives speak for themselves. We'll start at the top drawer:

Uptown boutique firms

It's clubby at the top. Uptown boutique firms rely on reputation, their hold on a niche market and their sophisticated sales associates. They get their employees the same way they do their clients -- referral and reputation.

Kathy Braddock, co-founder of real estate consulting firm Braddock + Purcell and the New York City real estate company Charles
Rutenberg Realty, said that these small companies "are the last holdouts" in a consolidating market where bigger is better.

In a climate where mergers and buyouts are shrinking the number of brokerages doing business in Manhattan, some of these long-established -- and perhaps a little uptight -- boutique firms are discovering that in order to survive, they need to modify the way they do business.

Upper East Side firms such as Alice F. Mason, Fox Residential Group and Gumley Haft Kleier, for example, have expanded from their traditional areas of focus to doing business in the Downtown market.

It's a business where customers are friends, and even potential employees. Edward Lee Cave, owner of the brokerage that bears his name, lives on Park Avenue and has a house in Connecticut where he retreats for weekends. One of his 20 employees has an apartment on Sutton Place and a second home in Connecticut. Another broker lives on Fifth Avenue, has a place in Maine and visits her family frequently in London. "That goes right down the line with our people," Cave said. "We live the life we sell."

Cave has been known to boast, "Our clients, we either know them socially, we went to school with them, or we once were married to them."

Cave has roots in the art world, and maintains his own collection. He was the first American to be offered a senior position at the real estate arm of the storied British auction firm Sotheby's. He was the senior vice president in charge of operations at the auction company and became the founding chairman of their international realty company.

He started his real estate company in 1982, and soon broke some records. He sold Dino de Laurentis' Beverly Hills mansion, which was the highest price paid for a private residence in the country at the time.

Cave focuses on selling "superior" homes rather than just large units or a simple studio or two-bedroom apartment.

"We're like the private banking division in a bank," Cave said.

In this niche, work often imitates life. Barbara Fox, president of the 40-agent Fox Residential Group, said new employees tend to imitate her style, wearing dark-colored jackets and pants, but there is no dress code. Unlike some of the other Uptown boutique firms, Fox Residential Group is a little more relaxed. Employees can wear jeans when they don't have appointments, and they generally eat lunch in the office, often getting the food from the restaurant EAT, a neighborhood diner or sushi.

"They're very down-to-earth businesspeople. That's who I hire," Fox said.

Some Fox agents specialize in neighborhoods outside of the Silk Stocking District, including Downtown and far Uptown. Her agents tend to live in the areas they cover, Fox said.

"I try to have a very well-rounded group, so there's someone for everyone. There's a broker for every buyer," she said.

Fox lives on the Upper East Side and has a country house in Connecticut; other employees have second homes in Connecticut, Westchester, Columbia County and Long Island, including the Hamptons. Her agents have vacationed recently in Mexico and the South of France.

"I'm the only one that doesn't take a vacation," she says.

Brokers range in age from their 20s to their 70s. Fox said, "again -- something for everyone."

Michele Kleier's shop, Gumley Haft Kleier, is known for its high-end Upper East Side business, but with her two young daughters on board in addition to other family members, the company is a little more easygoing.

At the 2005 Gumley Haft Kleier holiday party, held in Kleier's Park Avenue apartment, "The parlor and living room were filled with chic-looking middle-aged agents and their spouses. There were some younger brokers looking like Junior Leaguers and some real estate reporters happily munching food," according to an article in the New York Times.

Still, like at other Upper East Side boutiques, the brokers at Gumley Haft Kleier reflect the client base.

There is no one working there that "I haven't known" in some way, said Kleier, the company's president and chairman. "I don't like dealing with strangers."

Kleier and her husband, Ian, run the 40-person company -- she is a broker, and he handles advertising and the business end. Kleier's best friend and son-in-law work there. And daughter Sabrina Kleier Morgenstern is executive vice president, and her sister Samantha Kleier Forbes is vice president.

Upper East Side natives Morgenstern and Forbes graduated from the prestigious Horace Mann School and the University of Pennsylvania. They both still live on the Upper East Side. Morgenstern started her career at NBC's Access Hollywood before going into the family business.

Two other firms that are holding the old line are Phyliss Koch Real Estate and Alice F. Mason.

Technology, for example, has not been a huge boon to these brokerages, though it's transformed the business at mass market shops.

Alice Mason of Alice F. Mason and Phyliss Koch of Phyliss Koch Real Estate do not rely on e-mail for communication. "I like to speak to people," Koch said. "A lot gets lost in an e-mail."

Koch said that while Corcoran and some of the other big firms will hire "anyone," she only hires people she knows who have a built-in network and knowledge of the city's apartment buildings.

The youngest of her nine agents is in his 40s, Koch said. Koch depends on referrals for customers and her husband and employees for technological matters. She said the Web isn't the answer in real estate because you need to see a property to buy it. "I believe in the personal touch."

Koch lives in the San Remo and vacations in tony Atlantic Beach on Long Island. Known for her focus on the West Side, Koch also does a fair number of deals on the East Side. It's not that Koch hasn't broken any ground. "We've always been up at Columbia when no one would go up there," she said.

She said all the big firms have approached her to buy her out, but she has rebuffed their offers. "We do what we do and we do it fine," Koch said. Besides, she said, "people don't necessarily want to work with a larger firm."

Mason has been in the business since 1953, a time when tony cooperative apartments only sold to people in the Social Register, a directory of the privileged class. At the time, shut out of the social elite, Mason capitalized on Manhattan's rental market. She even found Marilyn Monroe a rental apartment at 2 Sutton Place in 1956 (see How it feels...).

Mason is known for having hosted celebrity-packed dinner parties with guests including Presidents Bill Clinton and Jimmy Carter. She has maintained a stronghold on the Upper East Side high-end market, but as luxury real estate development has extended to Downtown Manhattan, her company is following suit. She says her agents also will handle deals below $1 million.

Times have changed, but Mason still relies solely on the telephone to communicate with her office. She has stayed in her Upper East Side rental apartment for 44 years, where she also works. While many companies are hiring fresh, young talent, most of the 12 employees at Mason's office are in their 50s. All came with built-in networks. Her daughter and senior vice president, Dominique Richard, 45, has worked with Mason for 23 years.

Rental firms

Manhattan's large rental firms are at the other end of the spectrum, with their brokers working to house large numbers of people as fast as they can be put into apartments.

Rental firms attract young employees that need a steady income and are drawn to the promise of a quick paycheck. In contrast to the exclusive, top-drawer mores of the boutiques and sales-oriented firms, turnover is greater and payouts are smaller. Sales agents tend to dismiss rental agents as professional novices.

At the top of the rental food chain is Citi Habitats, the biggest rental company in the city.

Founded by Andrew Heiberger, Citi Habitats has grown from two agents to 680 employees, spread out across 16 Manhattan offices, according to Gary Malin, the chief operating officer since 1998. The company is also the on-site leasing and sales company at 12 buildings in Manhattan.

"Citi Habitats has evolved since its inception in 1993," Malin said. "We're not the new kid on the block."

The company proved the value of its high market share in 2004, when Heiberger sold it to NRT, a subsidiary of the public Realogy Corp. The company, which owns the Corcoran Group, Sotheby's International Realty and Coldwell Banker Hunt Kennedy, paid $49 million for a mix of quantity and quality. Heiberger is now president and CEO of developer Buttonwood Real Estate.

Citi Habitats has served as the breeding ground for many brokers that later went on to start their own rental firms, including Bond New York, Kurland Realty, A.C. Lawrence and Company, and the Real Estate Group New York.

While some agents drew criticism for their business methods in the early years of the firm, Malin's guiding hand improved Citi Habitat's reputation, according to brokers.

Malin said he still hopes to maintain a family-like atmosphere. He said he sends a congratulatory e-mail to agents when they make their first sale and their commission cut increases.

Bond New York, co-founded six years ago by Bruno Ricciotti and Noah Freedman, aims for widespread appeal, as reflected by its employees.

In the company's Greenwich Village office, there are artists, actors, musicians, former Wall Street guys, real estate building managers and even an art professor, said Shane Kramer, 36, the rental manager in the office.

The sales associates dress in Downtown-chic clothing, Kramer said.

"We do have a dress code, but we allow the agents to have their individuality," Ricciotti said. "We're definitely not a robotic operation."

Most of its employees are between 28 and 37 years old, though they range up to 69 years old.

Ricciotti and Freedman are in their early 30s. Freedman likes to surf.

"A lot of people that come here think we're very young and tech savvy," said Ricciotti. "We are super, super cool," he said, tongue-in-cheek.

Benjamin James Associates president Douglas Wagner said his firm "in some ways is the anti-broker in that we've never established a corporate culture. Instead we've always attracted the more sort of freelanced, entrepreneurial, somewhat creative profile in our agent ranks."

Today, the 14-year-old, Downtown-oriented firm's business is 65 percent rental and 35 percent sales. Because of its rental focus, the company appeals to young people, some of whom have been with the company since its inception, Wagner said. Its 80 agents are mostly in their mid-20s to mid-40s, though some agents are in the 50s and 60s, Wagner said.

The company's founder and Wagner's partner, James Ferrari, helped produce a film that debuted at the 2006 Tribeca Film Festival, the romantic comedy "Kettle of Fish," which starred Gina Gershon and Matthew Modine.

"That also influences the creative factor at Benjamin James," Wagner said.

Large firms

The city's biggest firms have an advertising and marketing presence so ubiquitous that casual observers might see them as indistinguishable brands, along the lines, say, of the car rental companies Avis and Hertz.

The Corcoran Group and Prudential Douglas Elliman continue to vie for the top dog spot, said Braddock, a former general sales manager for Douglas Elliman turned consultant.

She says the struggle for the No. 1 spot puts each at risk of losing its unique identity.

"For the broker they're all beginning to feel like they are a Bloomingdale's," Braddock said. "They're the place you can go to get a little bit of everything. You're not going to be blown away by anything, but you won't be lacking either."

But it's nearly impossible for apartment hunters to disregard Corcoran and Elliman, which command huge total market share across a wide spectrum of residential property types. In April 2006, together they accounted for more than 60 percent of listings among the 10 biggest residential firms -- 2,658 out of 4,426, according to a survey by The Real Deal.

Elliman had the most agents of any firm in Manhattan -- 1,337 at the time of the survey. Corcoran had the second-highest total, with 877 agents. The other firms in the top 10 biggest list were (in order of size) Citi Habitats, Halstead, Brown Harris Stevens, Bellmarc, Coldwell Banker Hunt Kennedy, Stribling, Warburg and Sotheby's.

Even in a large organization, a dynamic leader can make a big company feel a lot more like family. When Corcoran founder Barbara Corcoran sold the company to NRT six years ago and Pamela Liebman became the president and CEO, conventional wisdom -- and employee chatter -- indicated that the company went from a family-run business to a corporate environment.

Under Barbara Corcoran, agents were offered in-house weekly massages, manicures and shoeshines. The perks have disappeared and so has a bit of the spirit, some brokers say.

"She was a leader that people followed. She appealed to many people," said an industry source who requested anonymity.

Corcoran herself described the company she ran: "It was very much a family atmosphere because I knew every agent and we put every agent first. The agent was the God we served, not the customer."

The insider added that Pamela Liebman is more businesslike and buttoned-up.

But, the culture shift at Corcoran is not really about Liebman versus Barbara Corcoran, Braddock said. It's about being a part of a public conglomerate rather than a private entity.

But real estate pros still praise aspects of Corcoran's operations, particularly the strength of the brand name and the company's comprehensive Web site.

Brokers that stayed at Corcoran or joined since the NRT sale have benefited from Liebman's no-nonsense style, which is responsible for expanding the firm significantly in the Hamptons and Florida. The Corcoran Group declined to comment for the story.

In many ways, Corcoran's rival Elliman shares a similar atmosphere.

They are both large companies under the leadership of a strong woman. CEO Dorothy "Dottie" Herman is seen by some as dynamic and similar to Barbara Corcoran.

"Dottie Herman is like what Barbara Corcoran used to be," said Leonard Steinberg, a Downtown broker who has been with Prudential Douglas Elliman for five years. But, unlike Corcoran, Steinberg added, there is the advantage that Herman is a broker. "She's definitely a broker's broker."

Elliman also declined to comment for the story.

Esther Muller, who runs the Real Estate Academy for Continuing Education, said Herman and chairman Howard Lorber run the company like a mom-and-pop shop despite its size.

While some people thrive on just being with a large company, others at big brokerages strive to create the boutique feeling by partnering up with other sales associates.

"The teams are taking over," Braddock said, "I think much more so." Like individual imprints at large publishers, the giants offer room for branding and individual identities through these groups. At Elliman, that's evident in the Bracha Group and the Jacky Teplitzky Team.

Others, including Michael Shvo and Shaun Osher, have ridden on the coattails of their success at Elliman to start up their own firms. Shvo headed the top producing group at Elliman in 2003, and Osher did the same in 2004.

Osher left two years ago to start up Core Group Marketing.

"I created my firm to provide individual attention," Osher said. "The larger these companies grow, the more they have to operate like a corporation. And buying a piece of real estate is a very personal and not corporate decision."

At another large firm, Halstead, sister company to Brown Harris Stevens, there are still some personal touches.

Richard Hamilton, a senior vice president in the Halstead Village office, gets a five-figure ad budget -- and access to a refrigerator filled with cold drinks, he said. "They put Diet Dr. Pepper in there for me."

Higher-end mid-sized firms

For agents who like the small-company feeling but find a boutique firm to be too stifling and a large brokerage too impersonal, a mid-size company is often a good option.

Mid-sized firms roughly divide into two categories in Manhattan -- the mostly independent, Upper East Side higher-end firms that are cousins of the Uptown boutique brokerages, and middle-market firms aimed at the bulk of the market.

At these mid-sized firms, management is still able to have an influence on the day-to-day affairs of every broker.

Frederick Peters, president of Warburg Realty Partnership, does not concern himself with providing free soda, juice and ice for agents.

"As far as I'm concerned, a lot of that stuff is gimmicky, and that's not what we're about," Peters said.

Peters is more concerned with the preservation of his company's image. "We certainly have high behavioral standards," he said. Keeping his finger on the pulse of the company is important to Peters -- he manages 150 agents in the company's five Manhattan offices and interviews job candidates personally. He also runs office meetings.

Similar to many other high-end brokers and managers interviewed at large and small firms, Peters has a second home in northwestern Connecticut.

"We are an intimate pick that is still a status pick," Peters said. He said Stribling, a rival firm, is most like his own company.

Venturing a bit beyond the company's traditional areas of coverage, Warburg established a luxury brokerage office in Harlem in 2004, and has recently added Downtown offices as well. Peters has expanded the company from 60 to 150 brokers, and from one to five locations since acquiring and renaming the 95-year-old firm Albert B. Ashforth in 1991.

Elizabeth Stribling, owner and president of Stribling & Associates, is as famous for her stylish suits -- all made by French designer Christian Lacroix -- as she is for the zip codes of the homes she markets, including the residences at the Plaza Hotel.

That concern for presentation filters down to her employees. A dress code is strictly enforced in the 200-person company, whether agents are hanging around the office or out showing property. "Jackets for men and a suit or a dress for the ladies," Stribling said via telephone from France. "I'm an old fashioned gal."

Like Cave, Stribling lives the life she sells and the business follows suit. She owns a townhouse in the East 80s and retreats to her two homes in France to escape. Likewise, Stribling & Associates has a Manhattan and European presence. The company has three Manhattan offices -- on the Upper East Side and in Tribeca and Chelsea -- and conducts business in the West End of London and the South of France, Stribling said.

Of all the firms, Stribling said, Brown Harris Stevens most closely matches her company. "I think Brown Harris puts a lot of emphasis on professionalism, comportment, service."

More upscale and smaller than its sister brokerage Halstead Property, both part of privately held Terra Holdings, whose owners include two members of the Zeckendorf real estate family, Brown Harris Stevens focuses on the high end of the market.

Brown Harris is the biggest of the white-shoe brokerages and among the most respected. The firm had 264 agents at the time of The Real Deal's biggest firms survey in April 2006.

"I think in most ways we try to be the luxury brand," said Jim Gricar, an executive vice president and director of residential sales for the West Side division of Brown Harris Stevens. "We tend to have the most luxury, white-shoe image."

Of the department stores in the city, Bergdorf Goodman most closely reflects the image of Brown Harris Stevens, Gricar said, "in terms of size and presence."

Brown Harris Stevens' agents work in seven New York City offices on the East Side, West Side, Downtown and in Brooklyn. The company also has offices in the Hamptons.

Brown Harris Stevens has always been "considered a little bit more buttoned-up," and Halstead is a bit cozier, said Braddock of Braddock + Purcell.

Sotheby's International is another high-end firm with a mid-sized presence in Manhattan. It is different than Stribling, Warburg and Brown Harris Stevens because it is part of the NRT national conglomerate, which includes Coldwell Banker Hunt Kennedy, the Corcoran Group and Citi Habitats -- even if it is a high-end part of that chain.

Kathryn Korte, the new president and CEO of Sotheby's International Realty, said the firm is known for its 200-year history as a luxury brand name and its art auction business, which often refers collectors to buy multimillion dollar homes from the brokerage.

"The Sotheby's auction client is the Sotheby's real estate client," said Korte, who has spent her 22 years in real estate at the firm.

Like Manhattan's boutique firms, Sotheby's hires through word of mouth, and its employees tend to live the lifestyle they sell, said Korte.

Sotheby's Manhattan brokers live on the East and West sides and Downtown, except for one agent who resides in Locust Valley on Long Island, Korte said, and many have second homes in the Hamptons; Litchfield, Connecticut; and Millbrook, NY.

Elliman's Steinberg described the Sotheby's Downtown office as friendly, but "Uptown it's cold, it's like the temperature is on 40 degrees."

Middle-market, mid-sized firms

In a rapidly consolidating market, the future looks grim for middle-market, mid-sized firms, some observers say. Buyouts may soon swallow firms of this size until the market is split between behemoth brokerages and boutiques. Managers at these firms disagree, though it seems that mid-market prosperity comes with affiliation with a larger company.

One mid-sized firm backed by national real estate conglomerate Century 21 is trying to grow into a larger firm by assembling pieces of smaller firms.

The marriage of two distinctly different brokerages, Dwelling Quest and Century 21 Kevin B. Brown, resulted in the 140-person Century 21 NY Metro, which is split between two Manhattan offices, one on East 57th Street and the other in Harlem. The franchise, which does not specialize in the high end of the market, includes Dwelling Quest's hip, tech-savvy brokers and Century 21 Kevin B. Brown's more seasoned and mature brokers.

"The young, upstart side of the business has really carried us," said Michael Simon, president of Century 21 NY Metro.

But the two sides have found a common ground, with Dwelling Quest employees turning to their older colleagues for experience and training, and the Kevin B. Brown folks looking to their younger colleagues for their Interne t know-how, Simon said.

Also part of a franchise with worldwide connections, Coldwell Banker Hunt Kennedy has more than 275 agents in the New York City division, at the company's three Manhattan offices.

Like Century 21, Coldwell Banker is not necessarily a super-luxury market specialist, but JoAnne Kennedy, COO of Coldwell Banker, said that agents at the brokerage will make money and get stock options.

About 20 percent of the New York City business is rentals, Kennedy said. The downtown office is the most laid-back, young and fun of the three Manhattan offices, Kennedy said.

Kennedy lives on Riverside Drive and has a house in Dutchess County. If she had to pick a department store that best represented Coldwell Banker, "we're probably Saks," she said.

Not every middle-market firm is part of a conglomerate. Bellmarc, which has 250 agents in six Manhattan offices, has been going strong for 27 years. Janice Silver, executive vice president and sales manager of Bellmarc's East Side office, said that only about 5 percent of the company's business is rentals.

Neil Binder and Marc Broxmeyer established the Bellmarc Companies in 1979.

While Broxmeyer focuses on the company's real estate investment acquisitions and management, Binder guides the direction of the company, develops the new agent training curriculum and leads many of the seminars.

Muller, of the Academy for Continuing Education, said that Binder is a "born teacher," and likes to hire new agents so he can train them himself. Muller said that Binder's emphasis on education is evident in that agents cannot take a buyer out to see a property unless they have memorized the contract of sale.

Downtown specialists

Just as Uptown has its boutique brokerages, so does Downtown. Like with other firms, their companies' cultures tend to line up with the types of clients they serve. In this case, it's the more artsy Downtown demographic.

Among the many boutique brokerages Downtown, DG Neary Realty and its 30 or so agents (according to the firm's Web site) have had a hold on the Chelsea market for 20 years. In addition to the company's sales and rental business, it's also one of the only residential real estate companies that explicitly caters to the gay community and helps run the Gay Roommate Information Network.

"Pretty much everybody lives in the neighborhood and works in the neighborhood," said managing partner Gil Neary. "We're kind of neighborhood people. I rarely leave the neighborhood."

Neary and his partner Dan Gerstein run a mom-and-pop shop, sitting just an arm's length away from the agents.

The agents can dress very casually; even Neary wears jeans and sneakers when he has no appointments with clients.

Another firm with a big Downtown presence, JC DeNiro & Associates, has 12 agents in its Chelsea office, where Christopher Mathieson, partner and co-owner, is based; 11 in the West Village; and six on the Upper West Side. The other three agents work from home.

Mathieson, who co-founded the four-year-old company with Florida-based 82-year-old Jack DeNiro (who is also Robert De Niro's uncle), puts an emphasis on the appearance of the storefront offices and the appearance of the block.

He is involved in street beautification and designs and buys the furniture for the offices himself. Each desk and chair is unique.

"People think it's a gallery or a furniture store," Mathieson said.

The agents range in age from 24 to the mid-40s and hail from the neighborhoods where they work. Part of the company's business model, Mathieson said, is "where we have offices is where we hire agents. They're part of the fabric of the community."

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Real Estate The September Factor September 18, 2006 Amid talk of “plateaus” and “softening,” the real-estate world is watching this month extra closely. • By S.Jhoanna Robledo   It’s…... Read more >

Real Estate
The September Factor
September 18, 2006
Amid talk of “plateaus” and “softening,” the real-estate world is watching this month extra closely.
• By S.Jhoanna Robledo
 

It’s been a funny sort of summer in the real-estate world, as the July and August doldrums have felt less like the usual quiet and more like the beginning of something bad. Ask Prudential Douglas Elliman broker Lisa Wong, who admits to a little survivor guilt. Though she’s been able to buy and sell properties for a steady trickle of clients—a big difference from the deluge a year or two ago, she does admit—many of her colleagues have found themselves with more time on their hands to agonize over the flattening market. Will it get better? Or worse? “I’ve heard that it’s dead,” she says.

April may be the cruelest month, but many agents say it’s September that’s make-or-break time for them. “It’s a litmus test for what the rest of the year will be like,” says Christopher Mathieson, managing partner at JC DeNiro. “This one’s really important because we want to see if the market’s going to continue to plateau.” And they’re hoping the news is good, given all the pessimism out there. A recent Halstead Property report showed that prices dipped 12 percent from June to July this summer; brokers say August was even more sedate. To make deals stick, “you have to work two or three times harder,” says Wong. “You’re getting lowball offers and calls you’d never get before. For something worth $1.9 million, you’ll get an offer for $1.6, something crazy.” Which explains why many agents look forward to the early fall, when beach homes have been shuttered, kids are back in school, and vacation days are used up. “It’s a renewal,” says Barak Realty’s Catherine Holmes.

Or maybe not. “September is clearly a better gauge than July or August. That being said … brokers are like everybody else. They’re looking for benchmarks. Obviously, if you can create some kind of benchmarking for September [and you reach it], it’s reassuring,” explains Frederick Peters, president of Warburg Realty. But if not, says broker Barbara Fox, it’s no reason to reach for the panic button, either. “We’re coming off the most frenetic market in history, and what we’re seeing now is more normal,” she adds. “This is what people who’ve been in business a while are used to.” Besides, says Mathieson, the calmer market may actually be a blessing. “It can be a little boring,” he says, laughing, “but it’ll give us an opportunity to have a life.”

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September 10, 2006 When a Deal Turns Sour By TERI KARUSH ROGERS THOSE who bought an apartment in the last dozen years or so — and who may well have fought to get it — may be shocked and very likely…... Read more >

September 10, 2006

When a Deal Turns Sour
By TERI KARUSH ROGERS

THOSE who bought an apartment in the last dozen years or so — and who may well have fought to get it — may be shocked and very likely offended to learn that they are actually living in a lemon. They are hardly alone.

“The concept of anything being hard to sell is completely unfamiliar at this point to a whole generation who have grown up in the market since around 1992,” said Frederick W. Peters, the president of Warburg Realty, referring to the fact that in a rising market, buyers are more likely to snatch up flawed properties. “A 20 percent increase in your value of real estate was like a constitutional guarantee, kind of like life, liberty and happiness. But buyers are more anxious in a slower market.”

That anxiety is creating a more expansive crop of so-called lemons, Mr. Peters explained. Defects like airshaft views are becoming deal killers as buyers agonize about how such shortcomings will affect price when it’s time to sell. And with so much more on the market to choose from, buyers are favoring blue-chip properties over cubic zirconia or even diamonds in the rough.

So what is a lemon these days? Rising construction costs and more onerous construction rules in some co-ops have made a lemon out of anything that needs a gut renovation, once a mainstay of up and down markets alike. But many problems — like impaired views, lack of light and high maintenance or common charges — retain their repellent qualities in any slow market.

Other immutable lemons include properties with extraordinary flip taxes, which may limit sellers’ ability to negotiate, and buildings that don’t own the ground beneath them.

Consider the young couple who bought an apartment in an Upper East Side postwar building with a land lease in April 2004. They thought they had negotiated a good deal, paying around $600,000 for a two-bedroom, two-bath unit on the 11th floor with open city views and a full dining room.

Then they executed “the perfect renovation for this kind of apartment,” said Audrey F. Ruden, the Prudential Douglas Elliman broker who recently attempted to sell it. “They didn’t overimprove it — they paid a lot of attention to the details that matter, installing a washer/dryer, a great kitchen and bathrooms, and windows with extra insulation in the master bedroom so it was soundproofed.”

The couple listed it in April for $1.15 million. The apartment sparked intense interest from the 40 or so buyers who saw it, Ms. Ruden said. But the building itself sat on leased land scheduled to be revalued in December and every six years thereafter, an unusually short period for land leases, which are normally recalibrated every 20 or 30 years, or even longer.

Because of rocketing real estate values in recent years, much higher land-lease costs could increase the apartment’s monthly maintenance of $2,170 by nearly $1,000. The apartment’s only bid, for slightly under its asking price, failed to go forward.

Meanwhile, the remaining would-be buyers drifted away wistfully as they — or their lawyers — noted the likely spike in maintenance, Ms. Ruden said. The sellers took the apartment off the market in June; they plan to try again once the land lease is recalibrated in December.

As with any citrus-y drawbacks, often the best strategy for a stricken seller is to offset flaws with a lower price. “There is a lid for every pot,” said Barbara Fox, the president of the Fox Residential Group. “Everything is salable for a price.”

Last year, Ms. Fox herself bought what she described as a lemon: a two-bedroom East 70’s penthouse with a wraparound terrace, owned by a 50-ish Austrian bachelor, that had been on the market for more than a year.

“Every wall had either some sort of gun or saber,” she recalled. “Also, every book on the bookshelves was about Adolf Hitler or the Third Reich. The apartment had not sold because the vibes were so negative.”

The asking price for the prewar co-op plunged from $4.3 million, to $3.99 million, to $3.650 million. Ms. Fox and her husband, James Freund, an author, mediator and retired lawyer, bought it for $3.3 million in June 2005. “We gutted every single interior wall,’’ she said. “We just purged it all.”

But pointing to a major turnabout in the market, Ms. Fox and other brokers say that fewer buyers are willing to shoulder increasingly grueling gut renovations. The shifting attitude toward fixer-uppers seems to contradict the proliferation of home-improvement shows on television over the past decade.

“In the early 90’s, during the recession, there was a whole cottage industry of people buying apartments, renovating and flipping,” said Jonathan J. Miller, the president of the Miller Samuel appraisal company. Next, during the housing boom, “there was such tight supply that people would buy anything,” he said.

One reason for the growing disinclination toward renovation is that while the discount for a wreck has remained steady at around 20 to 25 percent, the cost of construction has soared, Mr. Miller said.

Mr. Peters of Warburg Realty blamed Hurricane Katrina for the spike in the price of building materials. “It’s hard to do a decent renovation in New York now for much less than $200 a square foot,’’ he said, “and even that’s relatively low.”

But cultural change may also be forcing the fixer-upper’s fall from grace.

“In New York, every year it seems people work longer hours, so the truth of the matter is that the number of people prepared to undertake renovation seems to grow smaller and smaller,” Mr. Peters said. “They don’t want to devote their leisure time to supervising a renovation.”

Also, the intensive marketing sparked by thousands of new condominiums may have stoked a desire for immediate gratification and a tropism toward brand-new apartments. “I don’t know if all those new condos were built in response to a new demographic that just had no patience for renovation or if the new condos created the culture,” Mr. Peters said. “I don’t know if it’s the chicken or the egg.”

Ray Kiswani, a senior vice president of Bellmarc, faced a double whammy when he was hired to market “an absolutely unlivable” wreck, a 500-square-foot junior one-bedroom in a prewar co-op on West 86th Street. The sponsor had tried to sell it for almost a year.

“There was no kitchen, only a sink, and the wires were hanging from the ceilings,” Mr. Kiswani said. “There were no hardwood floors, just cracked concrete.”

In addition, he said, maintenance was more than $2 per square foot “because when the building was converted to a co-op, the attorney who did the offering plan thought that the attached terrace belonged to the apartment.” Standard maintenance charges run about $1.50 a square foot.

Mr. Kiswani asked an architect to create a set of renovation plans so that buyers could see past the dismemberment, and also persuaded the sponsor to offer a $300 per month rebate on the maintenance for three years. Two weeks after the apartment was listed for around $400,000, it sold in a two-way bidding war to Javier Frias, 27.

Mr. Frias is negotiating to buy the terrace from the building so that he can create a two-bedroom, two-bath apartment. But it’s taking months longer than he expected, which is another reason wrecks are less popular than ever.

Another reason is that building boards are taking a dim view of renovations. “The boards and the buildings have gotten so much tougher on their alteration agreements,’’ said Diane M. Ramirez, president of Halstead Property. “It’s almost like one building will think of something” — yet another rule — “and another will add it. On the top of the list is ‘summer renovations only.’ What if you buy an apartment in June?

“You have to wait till the next summer. So added to the cost of the apartment is a year’s worth of carrying charges. And if there is a renovation following yours, you sometimes have to go to the back of the list again to finish up.”

Just like apartments that need extensive renovations, a dreadful view can scare buyers away. The price penalty could be “10 to 20 percent if you’re looking at an airshaft or in very close proximity to a building, as compared to clearing the roofline of the adjacent building,” Mr. Miller said.

So how close is too close? “If you’re looking out the window and can read the headlines in the person’s paper across the way, it’s going to be tough to sell,” said Marc G. Windheuser, an associate broker at Prudential Douglas Elliman.

Jorden Tepper, a vice president and a managing director of Manhattan Apartments Inc. and of Manhattan Lofts Inc., said: “It’s not views especially but having some kind of openness. If you’re looking into a brick wall, it will take a lot longer to sell.”

Or not, with the right spin or the right buyer.

“I used to hold my breath and say, ‘This would make a great media room,’ ” said Harriet M. Norris, a sales agent at Prudential Douglas Elliman, who was referring to a bedroom that faced a wall in a $4.5 million Central Park West apartment she marketed last year. She eventually sold the apartment to a banker who planned to use the view-challenged bedroom for a small child.

Dim rooms have also been pitched as photographer’s darkrooms or meditation spaces. “Frequently you can compensate if you decorate well and have clever lighting,” said Mr. Peters, who suggested installing sheer curtains backed by small light bulbs that mimic daylight. “It improves the situation enormously. You’re less aware of something ugly outside the window, and you create the illusion of light coming in.”

Other properties prone to purgatory include walk-ups — particularly those on the upper floors, which are typically coveted by only a narrow subset of buyers. “Usually it’s a younger person who’s just out of school who’s maybe already lived in a walk-up building,” said Jill Sloane, a senior vice president of Halstead. But buyers accustomed to living in an elevator building or those with young children are much less interested.

The problem posed by a different sort of walk-up — the penthouse apartment, often one added later, that must be reached by a flight of stairs after an elevator ride — can occasionally be surmounted, literally: “Sometimes with rich people, what happens is they figure out a way to bring the elevator up to their apartment,” said Ms. Ruden of Prudential Douglas Elliman.

Brokers say apartments with tenants living in them, particularly messy tenants, are hard to sell, as are those owned by divorcing couples when one spouse is not in favor of moving and attempts to sabotage everything from showings (like canceling them at the last minute or loitering on the premises) to appraisals (pointing out the apartment’s every fault).

Overly customized apartments (“I’ve seen stuff like bathroom tiles bearing the faces of the owner’s kids,” Mr. Miller said) or overly improved apartments (a glorious renovation in a rundown building) do not fare well.

Maintenance much higher than $1.50 per square foot in a full-service building can also dull a buyer’s appetite, as can a prohibitively high flip tax that handicaps a seller’s willingness or ability to negotiate. A flip tax is money collected by a co-op board from a seller; it can be based on the number of shares held, although it is often a percentage of the sale price or of the seller’s profit. Although very high flip taxes can have a negative impact on a sale, the opposite could be true for a more modest flip tax, Mr. Miller pointed out, because it helps the building finance future capital improvements.

Ms. Sloane is currently listing a $499,000 one-bedroom co-op in move-in condition in a brownstone on West 88th Street. It has 12-foot ceilings, a $521 maintenance and a whopping 33 percent flip tax. It was on the market for eight months with two other brokers and after a $100,000 price reduction, has been listed with Ms. Sloane since June. She said it has received no offers.

Fortunately for sellers, it’s tougher nowadays to be disqualified on the basis of location. “There are no neighborhoods anymore — it’s just Manhattan,” said Ms. Ramirez of Halstead. “People have their preferences, but it’s just, ‘Find me a great apartment.’ Whereas in the past everything was advertised ‘East of Lexington.’ ”

While brokers contend that the one sure way to make lemonade is to lower an apartment’s price, sellers beg to differ. Much like parents who are blind to their children’s double chins, owners who were grateful to lay their hands on an apartment — any apartment — during the recent boom resist the notion that today’s buyers may be less willing to overlook its drawbacks.

“I have an apartment I absolutely love,” said Caroline Dawson, 30, who paid $379,000 two years ago for a duplex in a walk-up building on West 49th Street between Ninth and 10th Avenues. The 700-square-foot apartment has two full baths, high ceilings on the second level and a bedroom and sitting area in the partly-below-ground basement.

Ms. Dawson, who certifies fitness instructors, is moving to New England and has put the apartment on the market in May for $499,000. Her broker, Ms. Sloane, cited its ground-floor location as a turnoff for many buyers. “There’s been lots of interest,’’ she said, “but no one has pulled the trigger.”

Ms. Dawson said she didn’t look beyond the low maintenance (now $490 a month) and certain aspects of the apartment’s aesthetic appeal when she bought it, failing to consider how the ground-floor issue might downgrade the duplex’s charm.

“I never once considered the resale value of the apartment,” she said, pointing out the positive aspects of a basement bedroom insulated against the summer heat and winter chill. “Maybe I should have.”

 

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August 2006 Manhattan real estate feels pinch from stock market Link between Dow, New York real estate hard to pin down, but both now in rockier straits By Lauren Elkies    In normal conditions,…... Read more >

August 2006
Manhattan real estate feels pinch from stock market

Link between Dow, New York real estate hard to pin down, but both now in rockier straits

By Lauren Elkies 
 

In normal conditions, investors turn to stocks when real estate offers little promise, and head for property when equity returns taper off.

However, the last few months have shown an unwelcome correlation between two generally separate investment arenas: The benchmark Dow Jones Industrial Average of blue chip stocks sagged 4.3 percent from mid-April through mid-July and, at the same time, most key real estate market indicators sagged in New York City. Inventory rose and time on the market increased, though high-end properties kept median prices fairly constant.

But pundits differ on how stock market performance affects real estate prices.

How it affects New York real estate purchases is a bit more clear. It's more about the volume than its direction, said Jonathan Miller of appraisal firm Miller Samuel.

"It's a big misconception that the directions of indexes allow you to anticipate the real estate market," he said. "It's the churn, the volume of trades, that would likely have more of an impact on real estate."

Greater trade volume generates greater profits, and in a city where high-end real estate is bought and sold by the titans of finance, there's a link between yearly bonuses and apartment purchases.

"I think when you look at Wall Street, the first thing to zero in on is income and jobs," Miller said. "When everybody makes more money, it affects real estate purchases."

While the stock market is not on pace with last year's, the economy is doing quite well, said Susan Wachter, professor of real estate and finance at the Wharton School of business at the University of Pennsylvania. Indeed, the number of private sector jobs nationwide increased by 368,000 in June, according to a report released by Automatic Data Processing, a payroll services company.

Real estate established itself as a separate asset class in 2000, following the collapse of the stock market and the end of the technology boom, said Frederick Peters, president of Warburg Realty Partnership.

"Certainly [the market] affects real estate purchasing," he said. "It doesn't affect it precisely the way it used to." Before the crash, the real estate market would imitate the stock market six months later, Peters said.

"People, when they're unsure about the stock market's future, they want something they can see, touch, feel," said Gregory Heym, the chief economist for the brokerages of Terra Holdings, including Brown Harris Stevens and Halstead.

The Dow Jones Industrial Average and the average Manhattan apartment sale price have seemed to rise together over the years, a chart (below) by Miller Samuel shows. But Miller noted that there is no correlation between the two graphs; their similarity is coincidental, he said.

While there's uncertainty about what bonuses will be in December, people in the finance industry are more preoccupied with the amount Federal Reserve Chairman Ben Bernanke will raise interest rates, Heym said. Some economists worry that the Fed will overinflate interest rates.

At the end of June, the 30-year fixed mortgage rate was 6.8 percent, up from 5.8 percent at the same point last year, but still nearer to historic lows than prohibitive highs.

Rising interest rates don't just affect mortgage payments, but also affect the overall economy, which in turn affects real estate, Peters of Warburg said.

"I think the issue with interest rates is what are they a reflection of," Peters said. "To the degree that interest rate changes are a reflection of the Fed concern with inflation and to the degree that concern with inflation could slow down the whole economy, it definitely affects my industry."

Generally, economic factors work in concert and affect both the real estate market and stock market, rather than creating a direct correlation between stocks and real estate.

"Fluctuations on Wall Street always affect real estate buying," said Steven Spinola, president of the Real Estate Board of New York. "How Wall Street goes, so goes New York City real estate."

Sometimes the financial market does not seem to have any relationship to the real estate industry.

"The greatest increase in real estate was when the market was doing nothing between 2002 and 2005," said Ron Gallen, a Manhattan financial counselor. "That was an unbelievable boom."

On Wall Street, (bonus) size matters

Of course, bonus size is driving real estate purchasing decisions for Wall Street bigwigs -- and this year's dividends climbed to a record level.

The yearly payouts by Wall Street firms contribute more to decisions affecting New York real estate than the movement of the market, said Ron Gallen, a Manhattan financial counselor.

"The record bonuses are making people buy higher-priced apartments," said Debbie Baum, senior associate broker at the Corcoran Group.

Bonuses have "empowered those people that got really big bonuses to go ahead with the real estate they were already hoping to buy," said Frederick Peters, president of Warburg Realty Partnership.

A real estate purchase does not always immediately follow receipt of a bonus.

"People that are getting these bonuses and are buying real estate may not buy the first year," said real estate appraiser Jonathan Miller. "They have it in their purchase arsenal."

 

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Running the real estate numbers ragged Oft-quoted facts and figures about New York markets require second look and a critical eye By John McMurray In early summer, the Real Estate Board of New York issued…... Read more >

Running the real estate numbers ragged

Oft-quoted facts and figures about New York markets require second look and a critical eye

By John McMurray

In early summer, the Real Estate Board of New York issued a press release saying that median sale prices for Manhattan condominiums rose by 22 percent in the first quarter of 2006 relative to one year ago, while sale prices for co-operatives were up by 5 percent during the same period.

Although the figures in the REBNY release are correct to the extent that transaction data is available, those numbers don't tell the whole story about getting a correct interpretation of real estate data.

In Manhattan, where the majority of co-op sales data is private, most prices are not made public. So price data for co-operatives is often incomplete (though that looks likely to change under a bill expected to be signed into law by Gov. Pataki making co-op sales data public), and the numbers that circulate are inadequate. At the same time, median price figures can vary widely from quarter to quarter since one very large sale can raise the median significantly. Price-per-square foot is a much more reliable indicator, though that figure, too, is often not available for co-op sales.

"Whenever a market report is released, it's always possible to take a single statistic and harp on it," says Greg Heym, director of research and chief economist for Halstead Property in Manhattan. "People may say, 'Look, this area of the market is slowing, and here's the number that shows it.' That's why it's always important to use statistics like average or median price in conjunction with other indicators to get an accurate idea of what's happening."

Also, in Manhattan, many commercial brokerages do not use standardized neighborhood boundaries. As a consequence, the vacancy and rent data which brokerages publish in their respective real estate reports can differ widely over what may not be the same turf.

According to Maria Sciola, senior managing director for national research at Cushman & Wakefield, "When you see variations between companies, it's usually due to how the geographic boundaries are assigned and how spaces are defined. Do they include all buildings? Is it just buildings over a certain size? Is it only buildings that have space available? Answering those questions differently can yield different results. Even with these variations, though, companies agree on the overall direction that things are going 99 percent of the time."

Relying on national housing data can also be problematic to home buyers, says Frederick Peters, president of Manhattan-based brokerage Warburg Realty.

"Buyers should always rely on regional data because we're just too big a country for what's going on in Spokane or Miami to be germane to our market," Peters said. "After the oil bust, the Texas housing market was in the doldrums for decades, but that had no impact on what was going on in Manhattan. You also need to make distinctions about why people are buying and selling. A market where second-home purchasers and investors are putting no money down is very different from Manhattan, where people are regularly putting down 50 percent when buying co-ops."

Peters also believes that the news media should be vigilant in specifically defining the housing statistics that they discuss. Moreover, in writing about April closings, for instance, Peters contends the media should stress that those closings are really an indicator of housing activity two or three months earlier. By not doing so, Peters feels the media hypes the data as being inappropriately current.

"Making that distinction doesn't require rocket science," he says. "Nonetheless, it's rarely acknowledged."

In housing data, statistical variations abound, and the average buyer can feel overwhelmed. "You can never have too much data or too much information when it comes to housing," says Sciola. "The challenge is being able to interpret it."

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A REWARDING MARKET FOR SAVVY BUYERS AND SENSIBLE SELLERS 2006 Mid-Year Market Review By: Frederick W. Peters, President, Warburg Realty Partnership New York City in the first half of 2006 has seen a stable…... Read more >

A REWARDING MARKET FOR SAVVY BUYERS AND SENSIBLE SELLERS
2006 Mid-Year Market Review

By: Frederick W. Peters, President, Warburg Realty Partnership

New York City in the first half of 2006 has seen a stable active market with little real price growth over the last quarter of 2005. Supported by a strong national economy and local job growth fueled by a busy Wall Street, and controlled by rising interest rates and buyer caution regarding overpricing, this market has rewarded the careful buyer and the sensible seller. Well priced properties have sold briskly, many in overbids, as have both the highest end new construction in the luxury areas and those projects whose less traditional locations have been offset by reasonable pricing. Overpriced properties on the market in every part of the city have languished, causing sellers to lower these prices to more reasonable levels in order to become competitive. This phenomenon has been misinterpreted by the press, who tout it as an indication of a weakening market. It is not.

Certainly the market is much different from that of late 2004 and early 2005. We do not have runaway price increases. Every property, no matter its quality or provenance, does not attract several bidders who feel they must offer the asking price to even get into the game. As sellers continue to ask overly ambitious prices for their properties, they linger longer in the marketplace. Inventories rise. Thousands of new condominiums move into the marketplace, boosting the stock of available properties still more. Reports are no longer about the bubble bursting, but about gradual deflation, making buyers already fearful about making a mistake even more anxious.

Actually today’s residential market is filled with buyer opportunities. In the one bedroom and small two bedroom markets, ambitious sellers have priced many properties beyond their value. As a result there are many choices for the buyer, who can leverage one property against another to make sure he or she gets the best possible price. Buyers, who in recent years have been reluctant to make offers because they felt anything below the full price would fail to interest the seller, should now be prepared to negotiate. If a property has lingered on the market, it is frequently possible to offer 10% to 15% below the asking price and get a seller response. As rents have stabilized and increased, and landlords have become less flexible about giveaways, buying is once again a better and more intelligent financial option for many consumers eager to both build equity and get a stakehold in the New York market.

The family apartment market has expanded to every corner of the city. Conversions in northern Manhattan, new condominiums and conversions in Harlem, high rises appearing along the Broadway corridor between 90th and 106th Streets on the Upper West Sides, and cranes on every corner in midtown both East and West, in the East Village and on the lower East Side, in Tribeca, in Williamsburg and Greenpoint in Brooklyn, are all adding inventory to the options available for this demographic group. Families are being courted everywhere. While the prices of the traditional pre-war five, six, seven and eight rooms co-ops on the Upper East and West Sides have held firm and even risen slightly, there are opportunities at a wide range of different prices in the neighborhoods mentioned above, as well as Brooklyn’s exquisite brownstone areas, Long Island City, and for the adventurous SoBro, the newly rechristened South Bronx. And each, with its new and renovated housing stock, pocket parks and gradually increasing influx of services, is attracting its own enthusiasts.

The luxury end of the residential market has never been more active. Here there is never quite enough inventory along the fabled avenues and streets of the city’s most elite neighborhoods. Wall Street executives, hedge fund pioneers, and the wealthy from South America, Europe, Russia, Korea, China, and around the world wait anxiously for a new alternative and then rush to see it, once again bidding against one another to secure their piece of the top of the rock. The very large co-ops and condos in the most desired buildings are quickly bought up for prices at $4000 per square foot and higher, while the ultra luxury townhouse market is depleted. For these properties 2006 has been a record breaking year.

For the consumer the current market is difficult to penetrate. The press reports stable or slightly increased prices but uses increased inventories and slowing rates of increase to predict a downturn. The national economy is strong, but the Federal Reserve fears inflation and interest rates have mounted steadily for a year and a half.

At Warburg we recommend sticking to fundamentals. Do not buy if your goal is to double your money in twelve to eighteen months. New York real estate is a great investment, but it is best to have a time horizon of at least three to five years. There are a range of options, from introductory units to the most luxurious, in almost every neighborhood. Do your homework, both on line and through your broker, to determine which area and property type best suits your needs. Buy and sell in the same market. In our experience, those who try to sell at the top and buy at the bottom only outwit themselves 99% of the time. And don’t think of your home primarily as an investment. This is the world’s greatest city, with an extraordinary diversity of neighborhoods, of ethnic groups, of arts and culture, of restaurants, schools, and experiences. More than anything else, your home in New York is your passport to the richness of life in this amazing place.

 

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Are There Enough Buyers to Go Around? By JOSH BARBANEL CONDOMINIUMS have become a familiar sight in Manhattan in the last couple of years, punctuating the skyline from Battery Park to Harlem and most…... Read more >

Are There Enough Buyers to Go Around?
By JOSH BARBANEL

CONDOMINIUMS have become a familiar sight in Manhattan in the last couple of years, punctuating the skyline from Battery Park to Harlem and most neighborhoods in between.

But as these condos are marketed — each carrying sky-high prices and a competitive list of amenities — and still more are breaking ground, it is hard not to wonder whether there are enough buyers to go around.

Not only are there thousands of condos currently on the market, but a review of building plans submitted by developers to the state attorney general's office shows that this building binge has not yet slowed down and may produce a supply of new apartments that could be around for a while.

So far, applications have been submitted for more than 24,000 condominium apartments since January 2004, 7,000 of them in the first half of this year alone. This increase in filings comes as supply in the current market has been rising steadily, with broker listings nearly doubling since 2004. And since many developers list only a sampling of apartments in new buildings, the numbers of apartments available for sale is probably significantly larger than the inventory listed with brokers.

Still, despite caution by some lenders and some customers, many others, including condo developers, brokers and buyers who are still signing contracts and putting down hefty deposits, say they have an abiding faith in the resilience of the market in Manhattan.

Sales slowed sharply at the beginning of the year, when buyers hesitated because of the uncertainty about the direction of housing prices. But now brokers say that the pace is picking up, and they are seeing a slow but steady stream of visitors to sales offices and of contracts signed for new apartments.

Asking prices on new developments are no longer rising sharply, but confounding skeptics, they have remained fairly steady, at prices that are higher than buyers ever imagined five or 10 years ago. Developers say they are, for the most part, holding the line on prices, convinced that they have produced the right product for the right market.

"How strong is the market for $2 million apartments? Extraordinarily strong," said Gary Barnett, the president of Extell Development, which is currently marketing six condominium projects across Manhattan. "The market for $3 million and $4 million apartments is strong, too."

He said that the rising prices for land, soaring construction costs and careful reviews by lenders would eliminate weaker projects now under development, especially those by inexperienced developers, limiting the growth in supply over the next few years.

Jeffrey Jackson, the president of Mitchell, Maxwell & Jackson, an appraisal company, said he had been consulted on half a dozen projects that may be postponed or converted to rentals.

The Manhattan market is subject to the same laws of supply and demand as the rest of the country. But the bullish view of the Manhattan real estate market is based on the belief that it is unique. The first tenet is that it is a magnet for wealth from across the country and around the world. The second tenet is that there is a strong demand for larger apartments with higher ceilings, open views and well-designed kitchens and bathrooms — the type of apartments that have not been built in large numbers in a generation.

While rising interest rates may reduce the purchasing power of middle-income buyers, the market for the affluent will remain strong, brokers say, as the local economy remains solid; incomes for hedge fund managers, investment bankers and law partners remain high; and buyers from across the globe continue to view New York as a good place to invest.

"There is a tremendous amount of demand, and there is little housing in New York," said Stephen G. Kliegerman, the director of marketing development for Halstead Property. "There is a desire to live in New York City, and as fuel costs go up, even more people will want to live here."

Or as Mr. Barnett of Extell put it, "New York is the epicenter of the world, and everybody wants to own something here."

Of course, even the Manhattan market has had its low points. Park Avenue palaces faced foreclosure in the Depression, and town houses on the West Side sold for a pittance in the 1950's. In the 1980's, after a wave of apartment construction and conversions, many developers faced foreclosure. And the terrorist attack in 2001 sent rumbles through the market.

Frederick W. Peters, the president of Warburg Realty, said that he had experienced several downturns over the decades and likened the experience to driving off a cliff. And he does not see that occurring now. "The fact that we have experienced minimal price growth for a year suggests that the market has slowed down," he said. "The 'driving off a cliff' experience doesn't seem to be happening."

Jonathan J. Miller, an appraiser and the president of Miller Samuel, said he believed that many prospective buyers were ready to act but were holding back because of market uncertainty. At the same time, he said, Manhattan developers were holding the line on prices, confident that the new condos were worth their high prices.

"There are a lot of buyers, with money to spend, on the sidelines," Mr. Miller said.

Susan Petri, who works in communications for American Express, said that she and her husband have been shopping for a condo and that they found the same high prices at every place they looked. "This is New York — the demand will always exceed the supply," she said. "Everyone wants to live here."

But her husband, Roland, was more skeptical. They are trying to decide whether to settle in New York, where she now works, or in Scottsdale, Ariz., where he practices emergency medicine. He observed that the amenities touted in buildings in Manhattan were not that different from those found in new homes in Scottsdale and wondered whether they should wait to see if prices came down.

Julia Bohan said she carefully researched the housing market, systematically comparing prices per square foot, before signing a contract a few weeks ago to buy an apartment at the Ariel East, one of the two glass towers facing each other across Broadway at 99th Street. But in the end, she said she relied as much on intuition as cold, hard facts.

Two years had passed since her husband died, and she was in contract to sell their Upper East Side apartment, with a wraparound terrace and park views. The sale price was high enough to enable her to spend about $2 million at the Ariel for about 2,000 square feet of space, and put away some money for tuition, too. The apartment had lots of space at a better price than she found elsewhere in Manhattan.

"It is scary to do it alone after being married for 15 years," she said, "But I really feel confident that it is a solid investment. And it feels right, too.

During the years when prices were rising sharply and apartments were scarce, buyers were conditioned not to ask for concessions. If the price was too high, they would walk away. Today, Mr. Miller has this advice to buyers: "Always try to negotiate. Developers may be more open than in past years to negotiating. You have to ask."

Pamela Liebman, the president of the Corcoran Group, agreed but added that the developer's response would depend on "the mind-set of the building, how the building is doing."

"We have buildings where we have not done one penny of negotiation," she said.

During the ultrahot seller's market a few years ago, some developers would submit weekly or even daily amendments to offering plans, raising prices on new condominiums. Price increases come less frequently now, and a few developers have filed amendments lowering prices, though they attribute that to pricing errors, rather than to a faltering market.

At the Avery, which Extell is building on Riverside Boulevard at West 65th Street, buyers learned that many of the closing costs would be picked up by the developer, up to a total of 3.7 percent of the purchase price. But that's down from the 5 percent offered a few months ago.

Mr. Barnett, the Avery's developer, said that close to half of the apartments were now sold and as sales continued, help with closing costs would end entirely.

At 170 East End Avenue, Skyline Developers' 19-story glass tower near 87th Street, brokers were saying earlier this year that sales were slow. Orin Wilf, Skyline's president, disputed this but added, "We have been negotiable on our prices."

"We feel that our sales have been very steady because we are willing to work with customers," he said. "If a customer walks into our sales office and wants to spend $5 million on an apartment, and the apartment they want is $5.4 million, over 99 percent of the time the deal gets done."

He said that he had not offered to pay closing costs and expects prices to tighten in the future. "At almost 50 percent sold, we plan on doing less negotiations and more selling at higher prices."

When sales were slow at the Ariel East, Extell filed an amendment with the attorney general lowering prices on 42 apartments, with cuts ranging from $5,000 to $260,000 for one sixth-floor apartment. But prices on some upper-floor apartments were raised.

Mr. Barnett said that the price cuts were made because apartments in the Ariel West building had been selling faster, and that he wanted to encourage buyers to consider Ariel East. He said that when the price changes at the two condominiums were combined, prices actually went up.

At another smaller project, the Abbey, a former parish building on East 16th Street being converted to condominiums, most of the apartments sold for the asking price, or close to it. But according to property records, one apartment, a duplex on the top two floors, sold at a discount of $500,000, or about 27 percent below the asking price. Eight of 31 apartments are still listed as available.

The developer, Herbert Hirsch, said that he became convinced that a sloping triangular roof limited the use of some of the top floor of the duplex, so he reduced the price to account for this. He said buyers were out there looking but were worried by press accounts about the market and were postponing purchases.

"From the developers' standpoint the market talks to you," he said. "The market tells you what your property is worth, to the extent that people come through and love your product and pay the prices."

The New York Times reviewed condominium plans for larger projects — those with at least 30 units or those valued at more than $20 million — filed with the attorney general's office, which oversees all co-op and condominium offering plans for their compliance with state laws. But in addition to apartments, the listings of condominium units provided by the state often included retail stores, storage lockers and parking spaces, sometimes even wine cellars. So to get an accurate estimate of the number of apartments in the pipeline, those filings were compared with records from the New York City Buildings Department.

The review found that applications for 24,400 apartments in 240 larger projects in Manhattan and 5,000 apartments in 75 projects in Brooklyn had been submitted since January 2004. Of these, by the middle of June more than 13,000 had been approved for sale in Manhattan and 2,900 in Brooklyn. It is not known how many of these apartments were actually built and, if built, how many have been sold.

What is known is that the 24,400 applications far exceed the number of apartments actually on the market.

Last week, a report by Prudential Douglas Elliman put the current inventory at 7,640 apartments, both co-ops and condominiums, up from 3,922 in 2004. In recent years, the total number of annual apartment sales in Manhattan has been estimated at 10,000 to 12,000.

The filings with the attorney general's office also show that many newer projects, including conversions of rental buildings, are also in the works. There were 10,800 apartments in large Manhattan projects still awaiting approval for sale, including the 7,250 apartments in 59 projects submitted this year. About 2,300 apartments in Brooklyn are also awaiting approval for sale. If all these apartments are actually built, they could weigh on the market for several years to come.

But many developers said they believed that the condominium market was beginning to correct itself, and that the weakest projects may never get built. Banks, worried about overbuilding, have tightened up on financing. The boom in construction has pushed up land prices and construction costs, making fewer projects profitable.

In the meantime, some developers are not cutting prices no matter what. At 165 Charles Street, Izak Senbahar thought he had his finger on the pulse of the market when he put up a 16-story glass building designed by Richard Meier along the Hudson River, next door to two other Meier projects, and set prices as high as $20 million for the 31 apartments.

But last October, after about half the building was in contract, sales stalled. Not a single contract was signed for about six months, until April 2006.

Mr. Senbahar received a series of offers below the asking prices and could have sold out long ago, said James Lansill, a senior managing director of the Sunshine Group, which is marketing the building. Even brokers urged him to cut his prices, but he would not.

"He placed his bet and stuck with his bet," Mr. Lansill said. "He had a belief in his goal that is unwavering. He just said when the building is completed, people are going to come and buy this."

After vacant apartments were used for an exhibition of modern furniture earlier this year, sales took off once more, Mr. Lansill said. Since April, he said, five apartments have been sold, leaving five apartments available.

Two of those five apartments are being combined into a larger unit, he said, and a price increase was just filed with the attorney general's office.

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A Slower Market, With Wall Street Fizz By STEPHANIE ROSENBLOOM FOR four years, people feasted on Manhattan's robust real estate market with a kind of bacchanalian revelry, so when prophesies of a bubble…... Read more >

A Slower Market,
With Wall Street Fizz
By STEPHANIE ROSENBLOOM

FOR four years, people feasted on Manhattan's robust real estate market with a kind of bacchanalian revelry, so when prophesies of a bubble began circulating last year, many braced for the worst.

Today the state of the market is certainly more sober and measured. The pace has slowed, there is more inventory and buyers are taking time to shop around. And while some brokers report a significant bump in sales thanks to record Wall Street bonuses estimated at $21.5 billion, others say they have not noticed so much as a blip. Still, two months into 2006, a death knell has yet to chime.

In many ways the new year ushered in a better environment for buyers. There is more inventory to peruse (up 35.6 percent over January 2005 according to Jonathan J. Miller, president of the Miller Samuel appraisal firm). Properties are staying on the market longer (137 days in the fourth quarter of 2005, up from 96 days in the final quarter of 2004, according to Miller Samuel).

At most price levels, buyers are likely to enjoy more attention from their broker and more elbow room at open houses. And many sellers have accepted that the market is no longer red hot — and have priced their apartments accordingly. Brokers can schedule appointments in advance and show a half dozen properties instead of asking clients to make split-second decisions.

"Buyers find it much more comfortable," said Patricia Cliff, a senior vice president and the director of European sales for the Corcoran Group. "They can comparison shop."

Gone, too, are the sellers who put their apartments on the market solely to cash out. Those whose apartments are on the market today tend to want to do business and are often willing to negotiate.

"The problem was you really could not differentiate between serious sellers and those that were testing the market," said Jacky Teplitzky, an executive vice president at Prudential Douglas Elliman, referring to 2005.

Buyers seem to be more cautious now, a feeling that manifests itself in a desire to view as much inventory as possible.

"Even if they see the apartment and are in love, they want to see what is out there before they put in an offer," Ms. Teplitzky said.

Indeed, many brokers think a new class of educated buyers has emerged, one that refuses to overpay and has a good grasp on property values. "People are taking notes, pictures with their cellphones, coming back the next week and asking for building financials," said Richard J. Ingenito, an associate broker at Bellmarc Realty. "These buyers seem to really know their stuff."

That buyers do their homework, are able to see more inventory and have time to deliberate also means that fewer deals fall through because there are fewer last-minute cases of cold feet, Ms. Teplitzky said. She pointed out, however, that this is not the time to buy something with the intention of selling it next year. "This is a market you're in for the long haul," she said, meaning five to seven years.

Marc Marin, 39, a management consultant who signed a contract on his first apartment — a two-bedroom co-op on the Upper West Side — last week, did not know if it was the best time to buy, but he figured he would be living there for a while and would not be distraught if the market dips.

Brian Lewis, a senior vice president at Halstead Property, said Mr. Marin searched for apartments for about two months and bought his place on Riverside Drive, which is in the $900,000 range, for below the asking price.

"It never gets easier, it seems," Mr. Marin said. "You just need to take the plunge."

Taking the plunge felt a lot better now than it did six months ago, he said, adding that buying in 2005 was somewhat intimidating. "I was feeling a little bit more power in this market," he said. "You had some negotiating room."

While that may be good news for buyers, it can mean more work for brokers. "I feel like I'm showing like mad and it takes forever to get an offer," said Sarah Smith, a sales associate at Warburg Realty.

Ms. Smith, like other brokers, said the calmer market makes for a more pleasant work environment, though the offers she is getting are lower than they had been in recent years. Her open houses have been busy, yet she has not noticed an influx of Wall Street bonus money.

In January, State Comptroller Alan G. Hevesi estimated that Wall Street bonuses would be a record $21.5 billion in 2005 (the previous record, in 2000, was $19.5 billion). The average bonus was also estimated to be a record $125,500, up from $114,300 in 2004.

"We are so dependent on the money from Wall Street," said Mr. Lewis. "If Wall Street is a shark, the real estate industry is the thing that cleans its teeth."

Bonuses tend to trickle down and jump-start activity across the board. But not everyone is feeling the ripples of the lush payouts. Mr. Ingenito of Bellmarc said that while he has had about 30 to 40 people at recent open houses, he has not noticed a major impact from Wall Street money.

"There are a lot of people waiting to see what will happen," he said. "If it looks like interest rates will go up rapidly, that should change."

Many buyers are content to play wait-and-see, hoping prices will fall. Not surprisingly, no broker predicted that prices would continue to decline. Still, brokers have certain historical markers on their side.

Ms. Cliff noted that the New York market is so insulated that even after Sept. 11, 2001, it came roaring back. "To wait on the sidelines and try to second-guess the market, I think, is always a very dangerous game," she said.

Ray Kiswani, a senior vice president at Bellmarc, explained that in the previous three years, buyers thought that deliberating about an apartment for a few months would cost them 5 to 10 percent in price increases. Therefore, they were willing to borrow from their parents or from their retirement fund to seal a deal. Now, they do not feel they have to act quickly to avoid a price penalty.

"Today, the market is stabilized, and it's very unlikely a major change will occur in the next few months," Mr. Kiswani wrote in an e-mail message. "Therefore, buyers — understandably — feel a couple of more months simply won't make a significant difference."

That attitude could potentially backfire, though, if you want to buy in some of the new luxury buildings where Wall Street bonus money has been spent in the last few weeks.

"The bonus season came around and it was a great year for a lot of people," said Tim Wright, a 26-year-old stockbroker who is living in a rental. He said he "fell in love" with a one-bedroom, one-and-a-half bath apartment that he bought at the Link, a 210-unit, 44-story condominium tower being built in Hell's Kitchen. It is expected to be completed by late 2006. Opening prices for one-bedrooms (about 600 to 1,000 square feet) are $650,000 to $1 million.

Mr. Wright did not fret about the state of the market because, as he said, "If I held off to time the market and the place sold out, I'd probably regret it."

He described the Link sales office as "mobbed" and the competition as "fierce."

"There is almost no negotiation," Mr. Wright said. "Say it's a million and you want to pay $850,000, they can say 'go for a walk' because they're going to sell to someone the next day for $1.2 million."

Dolly Lenz, vice chairwoman of new development marketing and investment sales for Prudential Douglas Elliman, said she has seen a "big bump" from bonuses in the last three weeks at the Cipriani Club Residences at 55 Wall Street. "A flurry just came as they got paid," she said. More than half of the units in contract at Cipriani are from Wall Street bonus money, she said, adding that at a recent open house, nearly 50 people showed up for tours.

At the Hudson, a 20-story condominium on the Upper West Side that is scheduled for occupancy this spring, about half of the 40 contracts that have been signed are with Wall Street bonus spenders, said Ramona Mahtani, the director of sales and marketing for the Developers Group, which, along with Halstead, handles the sales and marketing.

Richard Cantor, a principal at Cantor & Pecorella, a sales and marketing firm that is handling sales in 10 new buildings around Manhattan, said some buyers are surprised there is activity in the market. He said that those who viewed apartments and then waited weeks to make an offer have sometimes wondered, how could it be sold?

Thomas Elliott, vice president of marketing and design at El Ad Properties, the developer of several condo projects, including the Link; the O'Neill Building, at 655 Sixth Avenue, between 20th and 21st Streets; and the Grand Madison, at 225 Fifth Avenue, between 26th and 27th Streets, said the feeling at some sales offices is that "the party's not over yet."

Still, property is not being snapped up as it was a year ago. Ms. Smith of Warburg said sellers should be realistic. "Don't have supercrazy expectations," she said. "The consumer is just not putting up with it."

Mr. Lewis of Halstead, who said a property will sell if it is marketed and priced well, recently helped the owners of a two-bedroom, one-and-a-half bath co-op on the Upper West Side get the price they wanted (around $810,000) by putting their apartment on the market for $789,000. Some 47 people arrived at an open house and now a contract is signed for more than $800,000.

Mr. Lewis told the couple what he said he tells all of his clients: "You can choose to play pool where the ball used to be, or you can play pool where the ball is now."

 

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Remembrance of springs past Seasonal anticipation for a deal-making spring comes with question: how busy will it get? By Tom Acitelli, March 2006   Spring blossoms this month, and its arrival will,…... Read more >

Remembrance of springs past
Seasonal anticipation for a deal-making spring comes with question: how busy will it get?

By Tom Acitelli, March 2006
 
Spring blossoms this month, and its arrival will, as always, bring change to the Manhattan housing market.

"There'll be a lot more choices for buyers than anything they've seen in the last two or three years [this spring]," said Jeff Wolk, president of brokerage Fenwick Keats. "There'll be a little more tug of war between buyers and sellers."

Spring might be the most memorable season in the Manhattan market, a collection of months after traditional winter lulls, when deals start to happen again with greater frequency and the market's tone can be set for the entire year. This spring may be especially telling, following a winter that marked the end of the housing boom nationwide and in the city, and which comes on the heels of a record Wall Street bonus season in December and January. Past springs, then, especially those that followed a tough winter, could provide lessons for the coming one.

Data shows that from the first quarter (winter) to the second quarter (spring), sales in Manhattan generally pick up -- often significantly.

Only in three of the last 10 years have sales from the first to second quarter declined, according to appraisal firm Miller Samuel. In 1996, the number of closed sales deals dropped 18.6 percent; in 2001, it dropped 10.1 percent; and, in 2000, sales dipped nearly 2 percent. In the other seven years, sales shot up by double-digit percentages from the winter to the spring. In 1999 and 2002, sales jumped more than 30 percent, according to Miller Samuel; last year, they increased 12 percent.

Overall, over the last 10 years, on average, sales in Manhattan have increased 10.6 percent from the winter to the spring, and, over the last five years, 11 percent.

Much of this sales activity that shows up in springtime is actually fomented in the winter, as deals recorded as closed during the second quarter of the year are often hammered out the quarter before. That means this spring may owe much to the current winter.

"The first quarter is generally our busiest time," said Frederick Peters, a broker since 1980 and president of Warburg Realty Partnership. "When you're talking about springs being strong, you're talking about first quarters being strong."

The first month of the first quarter of 2006 saw median and average sales prices for Manhattan
apartments scratch the levels of the summer of 2005, increasing over both December as well as January of last year, according to a report from Halstead Property.

The average sales price in January was $1,277,568, an increase over the year-end 2005 price of about $1.1 million -- and the highest price since June, Halstead reported, when it was more than $1.3 million. The median sales price for a Manhattan apartment in January was $750,000, up from $699,000 at the end of 2005.

Although handicapping the market month-to-month can be difficult, the Halstead numbers jibe with the trend in rising Manhattan sales prices borne out by year-end reports that showed an uptick in average prices from the third to the fourth quarter of 2005, after sizable declines the quarter before.

Generally, all sizes of apartments in locations throughout Manhattan experienced year-over-year price increases in January, according to Halstead. Two-bedrooms on the East Side, for one, ended January with a median sales price of $1.5 million, 30 percent higher than the median in January 2005. Studios and one-bedrooms on the West Side each ended January with median sales prices 29 percent higher than January 2005, and Downtown studios had a median price of $410,750, Halstead reported, a 31 percent increase over last January.

The number of new listings throughout Manhattan was also up in January, according to Halstead, except for apartments with four bedrooms or more on the West Side and Downtown. Fresh listings for studios, one-, two-, and three-bedrooms increased in January over December.

Based on the winter activity so far and the precedent that sales usually pick up in Manhattan in the spring, should brokers be bracing for a flurry of deals in April, May, and June? Probably, market observers say -- but not on the scale of the most recent springs.

"You never thought the spring of '04 could top the spring of '03, and then it did," Wolk of Fenwick Keats said. "And you never thought '05 could top '04, and then it did. I think now, for the first time in two or three years, we won't be outdoing ourselves."

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Warburg moving Tribeca, Greenwich Village offices By Tom Acitelli Warburg Realty Partnership will be moving both of its lower Manhattan offices to new locations by spring. The firm's temporary Tribeca…... Read more >

Warburg moving Tribeca,
Greenwich Village offices

By Tom Acitelli

Warburg Realty Partnership will be moving both of its lower Manhattan offices to new locations by spring.

The firm's temporary Tribeca office on Vestry Street will find a permanent home in an approximately 2,000-square-foot, office at 100 Hudson Street this month. It will support 21 brokers.

Warburg's Greenwich Village office, now at 795 Broadway, will move to a 2,750-square-foot storefront office at 65 West 13th Street by the spring, where 31 brokers will be based.

"Each of them has a different raison d'étre," Warburg president Frederick Peters told The Real Deal. "The Tribeca office is just a response to the fact that we wanted to be in Tribeca, and we saw it as an opportunity. The Village office, our lease was coming up, so we thought either we're going to renew it or we were going to do something else. And we decided we actually wouldn't mind having a little more space."

No stranger to office expansion in Manhattan, Warburg has since late 2004 opened locations in Harlem and the Upper East Side as well as the temporary location in Tribeca, which opened in September.

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The Telltale Party By Anna Bahney December 25, 2005   MOST people don't like to think about their real estate broker throwing back drinks and gyrating on a dance floor to ''It's Raining Men.'' But…... Read more >

The Telltale Party

By Anna Bahney
December 25, 2005

 
MOST people don't like to think about their real estate broker throwing back drinks and gyrating on a dance floor to ''It's Raining Men.'' But like the holiday party, it happens once a year, ready or not.

For a buyer or seller looking to discover what a firm values, its demographic, its ''personality'' (let alone its quotient for fun), much can be gleaned from the annual holiday party. While the success of the soiree is no indication of whether these real estate professionals can close a deal, the parties do give an indication of how the company may treat clients based on how they treat one another -- and themselves.

Some are over the top, like the $100,000 party given by Prudential Douglas Elliman, at which more than 1,000 guests stormed the Four Seasons 10 days ago. Others were intimate affairs at a broker's home, a traditional dinner party at a private club or a laid-back hangout session at a downtown lounge not yet open to the public. Still others involved draining mozzarella and singing drag queens -- although not at the same time or place.

Bellmarc Realty

Bellmarc was the early entrant, kicking the season off on Nov. 29 with a by-the-book holiday party at a TriBeCa party space, complete with holly-themed name tags.

A buffet dinner featured four kinds of pasta, baked chicken, filleted fish, carved roast beef or turkey. Dancing followed, heavy on Motown and ebullient wedding favorites like Kool and the Gang's ''Celebration'' and Aretha Franklin's ''Respect.''

This was a festive affair, not too showy, not too stingy.

And not surprising, because Bellmarc is a ''just right'' kind of company. With about 220 agents, it is squarely in the middle of the 10 largest companies. The agents tend to be older, ranging from about 30 to 70, many on their second or third career.

Most of the agents have accents that leave no doubt they grew up in New Jersey, Long Island, Manhattan or Queens -- like the owners of the firm, Neil Binder and Marc Broxmeyer.

People whispered that the party was held so early in the season because it was cheaper to rent the space.

But by the looks of the dance floor at TriBeCa Rooftop, awash in bodies swaying, shaking and twisting, no one thought it was a bad deal.

Gumley Haft Kleier

On Dec. 7, Michele Kleier, who co-owns and co-manages the boutique firm Gumley Haft Kleier with her husband, Ian, was host to a cocktail party for 40 people at the nine-room Park Avenue prewar apartment where they have lived for the last 25 years.

A beaming Mrs. Kleier greeted guests in the foyer flanked by her two smiling daughters -- and vice presidents at the firm -- Sabrina Kleier Morgenstern and Samantha Kleier Forbes. Each of the three held one of the family's Maltese dogs -- Lola, Roxy and Dolly -- bedecked in red and green collars.

There was a lot of cheek kissing and puppy nuzzling.

It felt more like a book party than a holiday event (and not just because the three Kleier women are writing a book about being a family-run David against the consolidated Goliath firms). The parlor and living room were filled with chic-looking middle-aged agents and their spouses. There were some younger brokers looking like Junior Leaguers and some real estate reporters happily munching food.

Partygoers sipped wine and ate chocolate-dipped clementines and cheesy jalapenos on tiny biscuits as Billy Joel and Frankie Valli played on the sound system.

Just as one would expect at a party held amid Kleier photographs, family and friendships are central to the company. They are the company. Ms. Kleier has been in real estate for 27 years, and in addition to having her daughters close, many of the brokers are old friends.

Brown Harris Stevens and Halstead

Brown Harris Stevens's annual party was held on Dec. 7 at Au Bar, a velvet-roped celebrity magnet in Midtown off Park Avenue, which reflected the company's idiosyncratic mix of the traditional and the trendy.

While there are agents at Brown Harris Stevens who have developed long relationships with prominent New York families, there are also young brokers who handle newer clients. Everyone's clients share one trait: wealth.

In a parlorlike party space, where several courses of food were served, including sushi, pastas, salmon and desserts, the younger agents gravitated to a dance floor with music ranging from rock to rap.

Expressly for the firm, and not for spouses or guests, the party was also attended by some principals of the parent company, Terra Holdings, including members of the Zeckendorf family.

Halstead, also owned by Terra, had a very similar party, held at the same place on a different night. Just a little bit later, for a crowd just a little bit younger.

Warburg Realty

Each Warburg agent donned a red apron on arrival at the Tuscan Square restaurant in Rockefeller Center on Dec. 12. They were assigned a culinary station -- fish, meatballs, mozzarella, tiramisu -- and worked with one of 10 chefs to learn how to prepare the dish for the dinner.

The party was in keeping with the creative and academic background of Warburg. Its president, Frederick Peters, has a master's degree in music from Queens College and went to Yale as an undergraduate. He likes to keep the firm ahead of similar-sized ones, and Warburg was the first to open a luxury property office in Harlem.

Jane Bayard, a vice president there who was charged with creating the party, said that she tries to come up with a new idea each year for the company's 150 agents.

''We're not a mega-giant, so we can have a warmer atmosphere,'' Ms. Bayard said. The best part, she said, was that ''we weren't talking real estate all night.''

Citi Habitats

The soiree for about 1,000 was held at the enormous and ornate Cipriani Wall Street. With a supper club theme, it felt more like a senior prom than an office holiday party.

The decoration committee did some impressive work with the palm-tree table-toppers with feathers for fronds and a silken trunk lit from within. There were hors d'oeuvres and a buffet dinner of sushi, shrimp, pasta, salad and grilled beef.

Gaggles of young women wore strapless, backless or deeply plunging formal dresses in all manner of black, red and sequin. The men, who also came in packs, were no slouches either, wearing velvet pinstriped blazers and black suits.

Professional swing dancers performed to ''Boogie Woogie Bugle Boy,'' inspiring some flirty shimmying by agents on the dance floor, before the band retreated to dance fare with a cover of Madonna's ''Holiday.''

A projection screen above the stage flashed pictures of those overachievers who made the real estate equivalent of the honor roll, earning the ''Top Sales Agent'' and ''Top Rental Agent'' titles. There were pictures of the company's extracurricular activities like team sports and service projects. It was shown without the accompanying misty-eyed Alphaville version of ''Forever Young'' playing in the background. Which is unfortunate because Citi Habitats is forever young, made up of a seemingly endless supply of new agents, and the turnover is high.

Agents tend to be in their late 20's or early 30's, which speaks to attracting the young people that are the firm's bread and butter. For many people arriving in New York fresh from college, Citi Habitats is their introduction to Manhattan real estate.

Stribling & Associates

Elizabeth Stribling loves throwing a party, and like the firm that bears her name she does so with a strong sense of tradition.

It is held each year at the same Upper East Side private club. There are cocktails and a buffet dinner. For the last five years, the event has been decorated by Renny Reynolds, a Park Avenue-based designer who has created spectacular spaces through flowers from Studio 54 to the White House.

This year the party took a Caribbean island theme, with oodles of orchids, parasols, pretend iguanas and lanterns with printed birds. Sheer fabric was hung across the room, giving it what Mrs. Stribling called a ''warm magic carpet feel.''

''It demonstrates her personal style,'' said Kirk Henckels, the director of Stribling Private Brokerage. ''I would never use the word 'classy'; I would say classic.''

Mrs. Stribling personally greeted the agents and staff members who arrived with their significant others. Some of the firm's 200 agents come from prominent Upper East Side families with educations from schools like Chapin and colleges like Smith and Vassar, while others are from Dubai, United Arab Emirates; Paris; London; and South Africa.

''People said I looked like a snowflake,'' Mrs. Stribling said, describing her glittering white gown with lace and silver sequins that was made for her by Pilar Rossi.

Dwelling Quest

The Dwelling Quest identity -- a hip, independent, boutique firm -- could be read in the party's invitation, which was a slick e-vite with stylized pictures of candy canes and a red drink in a martini glass. The firm has 80 agents spread out over three locations, in Midtown, Harlem and Brooklyn, but the sensibility of the firm, as well as the location of the party, is very downtown.

It partied in a new cafe in west SoHo called Giorgione 508 (owned by Giorgio DeLuca, co-founder of Dean & DeLuca), which would not be open to the public until a week after the party. The vibe was low-key hangout, with the men in dressy open-collared shirts and the women in clingy knitwear as music by the Killers, the White Stripes and Moby played.

Since the company is growing -- both the Brooklyn and Harlem offices opened this year -- Daren W. Hornig, its chief executive, said planning a party is a delicate balance.

''If you do too much,'' Mr. Hornig said, ''people say, 'Why did you spend so much money on one night when you could have put it back into infrastructure?' If you do too little, people say, 'You don't appreciate us?' ''

JC DeNiro & Associates

From the mountain of coats piling up in front of the quickly fogging windows, to the scented candles set on filing cabinets and the wrought-iron decorative pieces bedecked with garlands and tinsel, this party had the welcoming effects of coming into someone's home.

But it was held in the JC DeNiro & Associates' office at Ninth Avenue and 21st Street in a storefront designed by Christopher Mathieson, the managing partner of the company, with the attention many give to their own homes.

Without the budget for a big flashy party, this firm used its people and its creativity to pull together an elaborate and attractive party.

The catering crew handily balanced convection ovens on top of desks and put glass Pyrex pans on top of printers, setting up their kitchen in a raised and open office space in the back. Another open office became a stage where a D.J. set up his gear, playing high energy club music and tracks from the new Madonna album. Throughout the evening two drag performers, Sherry Vine and Hedda Lettuce, tag-teamed the stage for stand up and singing.

The agents, who seemed to be friends as much as colleagues, mingled amid the festive wrapping-paper detritus of a secret-Santa celebration. They were invited to bring whomever they wanted -- friends, boyfriends, girlfriends, spouses, parents -- and each category was represented.

Prudential Douglas Elliman

By 9:30 p.m., the doorman at the 52nd Street entrance to the Four Seasons had abandoned his duties to Julian Niccolini, an owner of the restaurant. Mr. Niccolini announced to the two dozen unhappy guests jammed into the vestibule with their fur coats that it would be a half hour wait.

For those fortunate or patient enough to get inside, the party was on corporate holiday overdrive. Hundreds of men in charcoal suits lifted glasses and screamed over the music at hundreds of women in formal gowns, cocktail dresses and pantsuits. Suits slid past, the guests with plates of lobster and curry in one hand, a cellphone in the other, trying to make their way through the sprawling venue.

Everything about the party said big -- the venue, the band, the buffet; the personalities, the crowd, the noise. And that was fitting, because the company is among the top in the city in terms of numbers of agents.

In Manhattan, the ''big 10'' firms are more like a fuzzy 11 or 12, with the companies changing rankings depending on the measurement, and who is measuring.

Typically, firms floating around the top include Prudential Douglas Elliman, the Corcoran Group, Halstead Properties, Brown Harris Stevens, Coldwell Banker Hunt Kennedy, Bellmarc Realty, Stribling & Associates, Warburg Realty, Fenwick-Keats, Citi Habitats, Sotheby's International Realty and Manhattan Apartments.

A study done by the trade publication the Real Deal last April showed how they ranked in various categories. At that time it was Corcoran for the highest dollar sum in total listings ($2.79 billion), Sotheby's for highest median price per listing ($5.09 million) and Fenwick-Keats with the highest percentage of brokers without listings (63.1 percent). Douglas Elliman had the highest number of listings and the most brokers.

Last year, Gloria Gaynor performed at the Douglas Elliman party. This year the hired band performed Ms. Gaynor's signature song, ''I Will Survive.'' But the dance floor hit its peak during a cover of Bon Jovi's ''Living on a Prayer.'' Perhaps a telling shift in the market place?

Coldwell Banker Hunt Kennedy, the Corcoran Group, Manhattan Apartments

These three firms are having their holiday party in January, a trend started by Corcoran a decade ago because the holidays are too heavy with competition for people's attention. Coldwell Banker Hunt Kennedy will have a different kind of party this year, a black-tie event with dinner and dancing at the Doubles Club at the Sherry-Netherland Hotel.

Manhattan Apartments, which seems to be trying to keep up with everyone else, doesn't know what kind of party it is going to have, but it will have one, it promised, on Jan. 11.

Corcoran will take over Cipriani Wall Street on Jan. 10 with a ''God and Goddess'' party. The party, which will include models in period costume, also reflects the company's inherent competitive spirit.

''Every year they try to outdo themselves,'' said Lara Berdine, vice president of public relations. ''The agents have pretty high expectations.''

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REBNY toasts brightest and best at annual “Oscars” Dubbed the industry Oscars, this year’s Real Estate Board of New York Residential Deal of the Year awards had all the ingredients of the annual…... Read more >

REBNY toasts brightest and best
at annual “Oscars”

Dubbed the industry Oscars, this year’s Real Estate Board of New York Residential Deal of the Year awards had all the ingredients of the annual Hollywood spectacular – and some.

The ladies dressed in their finest Dior and the men donned tuxedos to pay tribute to the most promising, most accomplished and most respected in the business at a gala event held in the Puck Building ballroom, where all talk was of the high drama surrounding the 2005 Deal of the Year.

Halstead Property broker Sandra Lauer found herself embroiled in a saga straight from a big screen blockbuster involving an FBI sting, money laundering and tabloid headlines. Over the course of 13 months, she worked diligently to sell a two bedroom Manhattan co-op, for which the client misrepresented the true ownership. Despite this and several other serious setbacks, Lauer ultimately managed to consummate the deal.

She explained, “the deal involved a client selling a two bedroom co-op which he transformed into a one bedroom without Board approval.

“There was misrepresentation by the seller as to the true ownership of the property, which resulted in demand that that the seller pay a five-figure donation to a charity to clear up the stock certificate ownership issues. The deal ended up involving a much publicized FBI sting for money laundering and my concern was that my conversations had been taped by the FBI and that I, an innocent broker, was being drawn into a series of federal investigations.”

Despite two failed bids on the property, Lauer’s professionalism, expertise and perseverance ultimately enabled her to close the deal for which REBNY recognized her this year.

“You have to persevere and know that you are doing things the right way, no matter what everyone else is doing,” said Lauer after the ceremony.

“The most important thing to me has always been my reputation to do everything with integrity. That’s the way I conducted myself in this transaction and I think that’s why I was able to close.”

Despite the drama of the past year, Lauer admitted her moment in the spotlight made it all worthwhile.

“The event itself really was like the Oscars and winning the REBNY award is an extremely big honor. I know how many transactions occur in a year and to receive this kind of recognition truly humbles someone.”

Two of Lauer’s co-workers also stepped up to the podium that night to receive awards.

Halstead’s senior vice president Christine O’Neal took home the second place award with Barbara Schwartz, of The Corcoran Group. The two co-brokered a deal that involved a labyrinthine series of events that ultimately led to a successfully brokered transaction.

And Halstead’s Pasquae Strippoli won for Rental Deal of the Year for the successful negotiation of a deal that was actually two deals for the same apartment and involved a high ranking UN diplomat.

“The fact that Halstead made such a strong showing at REBNY’s Deal of the Year demonstrates our agents’ command of the real estate market in New York City,” stated Halstead president Diane Ramirez.

The third prize sales award went to Shel Joblin and CB White of Stribling & Associates, and Carrie Chiang and Mark Baum of The Corcoran Group.

Edward F Johnson of Brown Harris Stevens Residential LLC, received the Most Promising Rookie Salesperson of the Year Award and Jane Bayard, of Warburg Realty Partnership was presented with the Henry Forster Award.

Bayard joins an illustrious group of real estate’s finest who have previously earned what is regarded as a lifetime achievement award, including Elizabeth Stribling, president of Stribling & Associates, Hall Wilkie, president of Brown Harris Stevens, and her colleague, Frederick Peters, president of Warburg.

“What’s nice about receiving this award is the respect it gains for the firm. Fred Peters won the award about 10 years ago, so I feel good about winning it for both myself and for the firm,” said Bayard, whose life is steeped in the real estate traditions of Manhattan.

Her father, Harold Uris, the well known builder, was enormously generous in an effort to improve the quality of life for the city he felt gave him so much.

Bayard herself has been active in residential sales since 1976, and has sold in almost every major co-op on the Upper East Side.

In 1991, she assumed her current position as partner and executive vice president at Warburg Realty Partnership and she continues her family tradition in real estate, as well as serving the city in the charitable fashion her family embraced.

Reflecting on her long and productive career, Bayard commented, “I think it’s a very competitive industry and there are a lot of brokers who feel its an easy way to make money, but they don’t do their jobs properly and they clutter the industry. The good ones are very good, though, and it’s a pleasure to do business with them.”

In recent years, Bayard has allowed her sales career to take a back seat to her involvement with the management of Warburg, which has grown from two to five offices in the past year.

“We are hiring new brokers and working with more developers. It’s very exciting to be involved with a company that is growing. And I have to say, it is exciting to rub shoulders with people who are so well respected in the industry.”

Paying tribute to the 2005 award winners, Steven Spinola, president of the Real Estate Board of New York, said, “With the continued strong activity in the residential market, the selection of these awards becomes increasingly difficult each year.

“But that is to the credit of this year’s recipients, who have stood apart as New York’s top performing brokers. Each of the winners deserves recognition for their hard work, ingenuity and creativity.”

Spinola called Bayard “a true professional and role model to others in the industry.”

“She built a career from the ground up, rising from a salesperson to broker and then climbing the management ladder to become Executive Vice President of Warburg Realty.

“Jane has always been involved with REBNY, serving in many capacities for the last 15 years from the Education Committee to the Ethics Committee and beyond.  She has a great reputation among brokers and is well known for her integrity and creativity. She is an ideal recipient for this award.”

The proceeds raised at the gala will be donated to the American Cancer Society Hope Lodge New York City, Project Find-Find for the Aged and the REBNY Foundation Katrina Relief Fund.

Proceeds also will benefit REBNY’s Member In Need Fund, which was created in 1997 and has already helped nine member brokers overcome financial difficulties since its inception.

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For Choicest Apartments, Many More Choices WHEN developers opened new buildings for sale in New York a year ago, brokers jostled for appointments, buyers camped out before open houses and people made…... Read more >

For Choicest Apartments, Many More Choices

WHEN developers opened new buildings for sale in New York a year ago, brokers jostled for appointments, buyers camped out before open houses and people made decisions to part with thousands of dollars in a matter of minutes. One sales agent famously sold five luxury condos from the back seat of her BMW in a day.

The frenzy has died down, but the buildings keep going up.

With close to 16,000 units being built in Manhattan alone this year and next, and another 23,700 planned, according to Yale Robbins, a real estate publishing company in New York, there is much to choose from, especially at the high end, where a disproportionate amount of building is going on.

The plentiful options mean that buyers can now return to a sales office repeatedly to examine floor plans before writing a deposit check. Where some buildings might have sold three or four apartments in a day, now developers are happy to sell that many in a month. And some buyers even feel bold enough to offer less than the asking price, though few developers are biting.

"I just feel like people are waiting to pull the trigger," said Ariana Meyerson, project manager at 225 Fifth Avenue, a 192-unit building with $1 million one-bedroom apartments. "They are waiting to see where the market goes."

Some brokers predict that sales will slow more as newer apartments, often with fancier amenities than the building down the street, come on the market. "I do think that there is going to be product sitting on the market a year from now," said Michael Shvo, a broker who markets new developments.

Citywide, developers applied for building permits representing 15,870 new units in the first six months of this year, census figures show. Last year they applied for 25,208 units, the most since 1971. A large proportion of the newest units are being marketed as "luxury" apartments, a term that has come to mean anything from $600,000 studios in Brooklyn to $40 million penthouses on Central Park West.

The bounty of choice includes the planned condominiums at the Plaza Hotel and in the Stanhope Hotel on Fifth Avenue near the Metropolitan Museum; chic new apartments designed by the French architect Jean Nouvel at 40 Mercer Street in SoHo; and the Philip Johnson-designed units at the Urban Glass House on Spring Street nearby.

"We do have a healthy amount of developments coming on stream," said Kirk Henckels, director of Stribling Private Brokerage in Manhattan. "And if there is one question mark" looming about the state of the market, he said, "that may be it."

Although condo prices are still increasing, brokers said buyers are being shrewder about what they are willing to pay. Six months ago the luxury market was so heated that "you could basically put a 3,000-square-foot coal chute on the market and three people would try to buy it," said Frederick W. Peters, president of Warburg Realty. Now, he said, buyers were being more selective about location and quality.

Stacey Silverman, 41, has been looking for a two-bedroom apartment in a new development for the past six months. She has yet to put down a deposit. "I think there is a lot to choose from, and there is more coming on the market," she said. "So I'm taking my time."

Some developers have not caught on to this new reality. "Sellers are in denial that the market has shifted," said Jonathan Miller, a New York appraiser. "On projects that appear to have stalled, the developer kept ratcheting up the prices systematically - which was the norm for the past few years - until it was priced out of the market."

Some new developments are still selling briskly, even at the superluxury end of the market. The developers of the condominiums at 15 Central Park West have had no trouble selling 74 units worth $650 million in the two months since the sales office opened.

William Zeckendorf, a partner in the development, said 12 of 16 penthouses, including one at $45 million, were under contract. A prominent Wall Street investor lost out on a duplex penthouse when he tried to buy at a discount and another buyer offered full price, Mr. Zeckendorf added.

But brokers said the scramble at 15 Central Park West, designed by Robert A. M. Stern in the spirit of such grand buildings as the San Remo and the Dakota, was largely a reflection of its irresistible location, lavish amenities and old-world charm.

Alex and Luba Rabey were not even looking to move from their apartment at the Grand Millennium on Broadway when they heard about 15 Central Park West. Mr. Rabey, a 65-year-old consultant, said they were attracted to the building's particular vantage on the park, its gym facilities and its 11-foot ceilings. They have signed a contract to buy a $4.87 million three-bedroom apartment.

Name architects have not necessarily spurred sales at either the Richard Meier tower at 165 Charles Street or Charles Gwathmey's undulating glass building at Astor Place. They are both in downtown locations that some brokers said wealthy buyers do not prefer.

The tower at 165 Charles Street, the third to be designed by Mr. Meier overlooking the West Side Highway, has been on the market for over 18 months. Out of 31 units, 24 have sold, including a $20 million penthouse. One broker who asked not to be named because she did not want to criticize a building where she might bring clients said it should have sold out by now. Izak Senbahar, the developer, said, "It's a very specialty product that sells at its own speed."

Despite extensive media coverage and a model apartment sponsored by Esquire magazine, the Related Companies, developer of the Gwathmey building, has sold only 24 of 39 units there. David J. Wine, vice chairman of Related, said he was perfectly happy with those numbers, given what buyers were paying: $1,400 to $2,600 a square foot.

But, he acknowledged, "buyers, at those numbers, because they have more choices, are being more cautious about where they buy."

Even at less lofty levels, buyers are hesitating. "It's taking longer to sell out buildings," said Richard Cantor, a principal at Cantor & Pecorella, a marketing firm that is handling 1,500 units in 10 new buildings around Manhattan.

It has taken 10 months to sell 43 of the 79 units at Beacon Tower, a high-rise condominium in the Dumbo neighborhood of Brooklyn, despite the lure of a Zen garden, a gym and high-end kitchens. Steve Rutter, who handles marketing of new developments for Corcoran Group in Brooklyn, said the developer, Leviev Boymelgreen, closed down the sales office for part of the summer because sales were sluggish, and reopened after Labor Day. Only four apartments have sold since then.

So far, nobody is predicting a glut or that prices will collapse. That is partly because today's building boom pales in comparison to the one that took place in the 1980's (developers built 125,623 units in Manhattan from 1985 to 1991, Mr. Miller, the appraiser, said). That building spree exacerbated the effects of the stock market crash and a severe recession, and median prices fell as much as 45 percent.

Since 1999 builders have put up only 13,374 units, about a tenth of what was built in the 1980's.

This time around, Mr. Miller pointed out, developers have focused on the upper third of the market, making it vulnerable to the impulses of one group of buyers.

For the moment, many remain in the game. Ali Akansu, a professor at the New Jersey Institute of Technology, recently bought an $815,000 one-bedroom apartment in Bryant Park Tower, a 94-unit condominium that will sit atop a hotel. He said he figured that it would be a good investment, and that maybe his college-age daughter would move in at some point. But when he was looking, he said, he saw several other projects that he deemed overpriced.