Spring Is Blooming for Manhattan Property

By Josh Barbanel

April 28, 2010

The spring selling season in Manhattan is off to the strongest start in two years, according to major real-estate brokerage firms. But prices are sluggish.

Spring is traditionally the busiest selling season and sets the tone for the rest of the year. Last year, brokers said there was no spring season to speak up, and sales were the weakest in a dozen years. Flashy new condominiums went months without ringing up a sale and when apartments did sell, they sold at a steep discount.

But psychology has shifted this year as fears of recession fade, Wall Street bonuses make a comeback and stock prices rally. "Everybody feels richer, or at least less poor," says Dolly Lenz, a top-selling broker at Prudential Douglas Elliman.

Still, brokers said they don't sense a market frenzy and buyers are trying to be careful not to overpay. On Tuesday, a separate report found by S&P/Case-Shiller found that home prices in the New York metropolitan area declined 0.4% in February when compared to the prior month and were down 4.1% from a year earlier.

Early signs of New York's housing recovery began to appear near the end of last year, picking up first in discounted lower priced apartments eligible for federally-insured mortgages. That was followed by a rush of sales at the end of year for more expensive apartments, after many asking prices were cut sharply.

Now the recovery has extended to higher-priced apartments, those above $2 million, according to Hall F. Willkie, president of Brown Harris Stevens. Mr. Willkie said that last year only 18% of apartments were sold for more than $2 million, now they make up 40% of all sales. "Where buyers perceive good values sales are happening," he said.

Mr. Willkie said contract signings were up 43% this spring compared with 2008. Diane Ramirez, president of Halstead Property, said new contracts are up by a "good, strong amount," but she declined to provide figures.

Pam Liebman, president of Corcoran Group, said sales of the most expensive apartments, more than $10 million, are lagging. But for other apartments "contract signings are huge," she said. "Buyers have come out of the woodwork and they are trying to act on their instincts that this is the time to buy," she said.

Still, brokers said the recovery has been spotty: Some apartments linger, especially when sellers refuse to cut high prices, while others may attract multiple offers.

In some cases, apartments that buyers walked away from a year ago because they were deemed too expensive are now selling for higher prices. At Superior Ink, a condominium and townhouse project in the West Village facing the Hudson River, a 15th floor three-bedroom condo went into contract for $7.2 million a few years ago. The apartment had 2,200 square feet of space, two Juliette balconies, and large living windows facing south and west out over New York harbor.

But when it was time to close the transaction, the buyer had cold feet and walked away from a $1.4 million deposit. Last month, the same apartment was put back on the market by Related Cos., the developer of the project. It was back into contract within a week, brokers said, for $7.9 million, nearly 10% more than the previous sale price.

Some properties, especially those with ties to celebrities, are selling fast. Last month, Ms. Lenz listed an 11-room duplex penthouse co-op with a large terrace at 271 Central Park West owned by Agnes Nolan, a former luxury real-estate broker, for $13.9 million.

The apartment, needed lots of work but is across the hall from an apartment where actor Robin Williams once lived. He left the building a decade ago after the co-op board refused to allow him to buy Ms. Nolan's apartment and combine them.

A week after it was listed, the duplex went into contract to a buyer who agreed to pay the full $13.9 million asking price, more than double what Mr. Williams was willing to pay a decade earlier.

Jonathan Miller, an appraiser who prepares market reports for Prudential Douglas Elliman, warned, however, that the market could slow later in the year if interest rates rise and more and more sellers put apartments up for sale.

But for now, the surging markets have given brokers reason to celebrate and spend more on marketing.

At Fifth on the Park, a 28-story condominium project overlooking Marcus Garvey Park in Harlem, the developers held two parties for brokers a few weeks ago, where they announced a cut in prices on unsold units. They gave away five Apple iPads to attract brokers to the event. Now Carole Griffin, a broker for the development said four deals are "under negotiations" with serious buyers and traffic has picked up at open houses.

At the Rushmore, a new condominium on Riverside Boulevard, more than a hundred brokers gathered to sample h'orderves of rolled lamb and eggplant, and go on a treasure hunt for door prizes, including private golf lessons at Chelsea Piers, a sail on the Hudson, a weekend getaway in Connecticut, private cooking classes and a day at a spa at Chelsea Piers.

Kelly Mack, president of Corcoran Sunshine Marketing, said that sales at the Rushmore had surged in the last month "like a light switch turned on," and the lower priced units, under $2 million, had nearly sold out.