Yours for Under $1 Million

Pictured above (top): 444 E. 75th Street / $950K

Pictured above (bottom): 656 Baltic Street / $725K

 

TWO years ago, unemployment was around 5 percent, the average price paid for an apartment in Manhattan was nearing $1.7 million, and Eliot Spitzer had a good shot at becoming president.

 

"For a while there, we had to tell people that if they wanted to buy a $1 million condo, they were looking at a one-bedroom," said Pamela Liebman, the president of the Corcoran Group.

 

Today, things look a bit different.

 

Now, $1 million will buy much more space - even a three-bedroom apartment fine for raising a few children in the city. That price change can mean the difference between choosing to stay in the city and deciding to move to the suburbs.

 

Of course, you can still easily spend $3 million or $4 million on a three-bedroom in a doorman building on Park Avenue, and a ceiling of $1 million won't get you a Classic 6 on the Upper West Side.

 

But far more agreeably priced three-bedrooms are out there. And while they tend to be on the small side, the compromises they demand are not deal-breakers - no mountain of stairs to climb, for instance.

 

There is, for example, a three-bedroom apartment for sale for $950,000 on the 15th floor of a doorman building at 444 East 75th Street and York Avenue. The apartment, 15DE - a combination of two units, a studio and a two-bedroom - is about 1,440 square feet, with lots of closet space, a small office and views of the East River.

 

The building does have drawbacks. Buses stop nearby, but it's a hike from the subway, and the maintenance is high, almost $3,000 a month. So the broker, Debra Hoffman-Brill, a vice president of the Corcoran Group, says she priced the apartment accordingly.

 

"I have great affection for the building," said the seller, Bill Nolan, who served on the board for many years. "It's just time for me to go."

 

Unfortunately for Mr. Nolan, this is an especially bad time to be selling a three-bedroom apartment.

 

According to Jonathan J. Miller, the president of the appraisal firm Miller Samuel, the median price paid for a three-bedroom in Manhattan fell 42.0 percent, from $4.05 million the fourth quarter of 2008 to $2.35 million in the fourth quarter of 2009. In that same period, two-bedrooms fell 23.3 percent, one-bedrooms 7.6 percent, and studios 10.7 percent.

 

But that big drop in the price of three-bedrooms does not mean that demand for them has dried up. It indicates that fewer large, pricey apartments - the kinds of places that push average prices up - have sold.

 

The average size of the three-bedrooms that closed in the fourth quarter of 2008 in Manhattan was about 2,650 square feet. A year later, it was about 2,100 square feet. That's a 21 percent drop in size, which accounts for half the drop in price.

 

"These three-bedrooms are somewhere between the size of an average two- and an average three-bedroom," Mr. Miller said of the apartments selling today. "There's more living space devoted to bedrooms than to a living room or a dining room."

 

Financing is one reason small three-bedroom apartments move faster than larger ones. Getting a mortgage is still difficult, especially when it comes to nonconforming, or "jumbo" mortgages, which in Manhattan is anything over $729,750.

 

"People are looking to trade up from a one- or a two-bedroom and still qualify for a mortgage," Mr. Miller said.

 

Brokers are advising sellers to price their apartments below $1 million to make it easier for buyers to secure financing, and also so that buyers can avoid the 1 percent mansion tax that kicks in at that threshold.

 

At 112 West 72nd Street, Apartment 7BC, a three-bedroom, was originally priced at $1.1 million, which would have required the buyer to pay a mansion tax of about $11,000. But after six weeks, the sellers dropped the price to $995,000.

 

"People get really caught up psychologically over this 1 percent tax," said Jessica Cohen, an executive vice president of Prudential Douglas Elliman, and the lead broker on the apartment. "We wanted to open up the buyer pool to get a qualified buyer more quickly."

 

But Apartment 7BC is a combination of a small two-bedroom and a studio, so the living spaces are meager - the apartment measures only about 1,000 square feet. It also needs to be renovated. Still, it is in a prewar building on the Upper West Side with excellent subway access. The common charge is $689 and the real estate taxes are $712.

 

If you don't mind living a bit farther from the subway, you might be able to get some of that space back.

 

A three-bedroom apartment at 568 Grand Street, on the Lower East Side, is on the market through Halstead Property for $899,000. On the seventh floor, it has about 1,600 square feet, two bathrooms and a balcony.

 

This apartment is one of about 1,700 units in the East River Housing Corporation co-op, a four-building complex built in the 1950s by the International Ladies Garment Workers Union.

 

"If you're willing to be a 10- to 15-minute walk from the train," said Jeremy Bolger, a vice president of Halstead Property, "it's pretty much the best value you're going to get for your dollar - in lower Manhattan, at least."

 

Or you can look uptown. At 370 West 118th Street in Harlem, a three-bedroom is listed at $770,000. In a prewar building, the condo has two bathrooms, a washer dryer and Morningside Park views. At about 1,100 square feet, it has a common charge of $591.73 a month, and a tax abatement until 2034.

 

"You're under $600 a month" in common charges, said Goldine Eismann, an agent at Halstead Property, the exclusive agent on the property. "Once people can come up with the financing, then they won't have all this extra burden besides their mortgage."

 

Three-bedroom apartments for less than $1 million may also be had in sought-after parts of Brooklyn -even some for less than $750,000. A small three-bedroom at 656 Baltic Street, on the edge of Park Slope, for example, is listed at $725,000.

 

The apartment was put up for sale in May, at $799,000. But sales in the building have been slow going, in part because 656 Baltic, 1980s construction, was empty, having been completely remodeled by a developer. Most banks won't lend to potential buyers in a building until a certain percentage of the project is sold - sometimes as much as 70 percent.

 

The building on Baltic has three apartments, and two are now in contract. The remaining unit, a three-bedroom with a balcony, is just under 1,100 square feet.

 

The broker, Teri Cavanaugh of the Corcoran Group, says banks have told her that financing should be available. "Because it's a three-unit building, it was difficult for a while to get that first person to sign a contract," Ms. Cavanaugh said. "It's just been a trying year."

 

"And now," she added, "we've finally got traction."

 

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Copyright c 2009 The New York Times Company. Reprinted with Permission.  Photos should be credited as follows: Top Photo: Suzanne DeChillo/The New York Times, Bottom Photo: Andrea Mohin/The New York Times.