October 1st 2014
The Real Deal
High prices, gentrifying markets are creating clusters of listings as more sellers try to cash in
There goes the neighborhood — or, rather, the neighbors.
In the current upmarket, multiple apartments in the same building are hitting the market in rapid succession, as sellers look to replicate the high sales prices obtained by their neighbors, brokers said.
The trend is particularly noticeable in gentrifying neighborhoods, especially in Brooklyn. And in many cases, it’s being led by opportunistic sellers, who are looking to unload their apartments before the price-inflating inventory crunch eases.
“People talk, and people start to follow each other when the market is right,” said Jamie Fedorko, an agent at Warburg Realty. “Everyone knows what’s going on in their building. They know the prices are changing; they know there are bidding wars.”
Danny Davis, a broker at Town Residential, recently represented sellers at 415 Greenwich Street in Tribeca who listed their apartment, Unit 7C, as a test of the market. “The seller was not a serious seller, but more of an opportunistic seller, taking advantage of a hot market,” Davis said.
The three-bedroom, 2,279-square-foot condo sold for $4.9 million in July. “When we got over $2,200 per square foot, the domino effect began.” In short order, Davis said, units 6C, 3C, 2C and 7F were on the market.
Davis said the rush to sell is motivated by several factors: Owners at 415 Greenwich, who paid around $1,000 per square foot in 2006 when the former warehouse was converted to condos, are striking while prices are high. Others see the pipeline of new development units in Tribeca, and are selling before those new units hit the market — to buyers who want to move now. “Listen, it’s a numbers game,” Davis said. “Everyone is a seller at a certain price.”
In a similar situation, Town’s David Salvatore sold three apartments at 310 West 56th Street over the course of several weeks in April and May. The first was Unit 11C, which was listed at $375,000 and sold after one open house for the full asking price.
After the sale, Salvatore sent mailers around the building and received a call from the owner of Unit 8H. He ended up selling that apartment for $429,000. Soon after, the owner of a pied-à-terre in the building contacted him, Salvatore said. “Low inventory levels and the incredible new developments in the area along 57th Street also played a major role in their decision to sell,” Salvatore said regarding the third unit, which sold for the listed price of $385,000.
In some cases, of course, a cluster of listings is related to new development units coming online.
Meanwhile, some sellers have banded together to market their apartments as potential combinations. By doing so, they are trying to capitalize on the higher prices that large units fetch.
For example, five owners at the Gloucester, at 200 West 79th Street, have joined forces to try to sell five 16th-floor apartments as a package deal for $8.1 million. Combined, the apartments would measure more than 4,000 square feet, a rarity in the neighborhood. “At the end of the day, we’re in a sellers’ market. It’s a money move,” said Roger Covin, a Bond agent who’s working, though not exclusively, with one of the sellers. “On the Upper West Side, there are very few properties that provide 4,000 square feet. The more square footage, the more you can get for it,” he said.
In gentrifying neighborhoods, one sale after another may reflect growing demand from buyers willing to pay higher prices, and eagerness among longtime owners to cash out.
For example, early this year, Warburg’s Fedorko represented a buyer who paid $675,000 for a one-bedroom at 1103 Cortelyou Road in Ditmas Park, Brooklyn. Developers of the 12-condo building had been renting the units until this year, when prices in the neighborhood reached new highs.
Since February, Fedorko said, five other units have closed, each at higher price points. In May, Unit 4C sold for $713,000; Unit 2C went for $734,000 a few weeks later; 5A closed at $746,000 in August, and 3C sold for $776,000 in September.
Similarly, at 636 Leonard Street in Greenpoint, Bond agent David Kazemi said he started getting calls from neighbors after he represented the seller of Unit 4A, a one-bedroom measuring 815 square feet. The apartment sold for $815,000 in August.
Kazemi said after he sold 4A, he was contacted by the owners of Units 1A and 3B. “This is in an eight-unit building,” he noted. Unit 1A, measuring 1,177 square feet, last sold in 2007 for $569,000. Unit 3B, with 588 square feet, last sold for $410,000 in 2007.