With New York Real Estate, Just $10 Million Starts to Sound Reasonable
Talking about the excesses of the New York real estate market can be like marveling over summer weather in Phoenix: The exceptional is so routine that you easily start to sound tedious recounting or obsessing over it. “On Thursday it was a bone-dry 108 degrees — as it was on Monday, Tuesday and Wednesday. This morning, a deal closed on a $30 million glass high-rise penthouse in Midtown Manhattan. Similar deals were cut three more times before lunch.” Of course $30 million is a fantastical number, arbitrarily deployed as rhetorical device — an enormous penthouse in a new glass high-rise on or around 57th Street would change hands for two or three times that, as we have all repeatedly been made aware.
The conventional wisdom holds that the market for these properties, even as it has slowed in recent months in part because of expanded inventory, is distinctly separate from the rest of the luxury arcade in the city, which belongs to people who actually live here. Realtors see little correlation between what might happen in a building like 432 Park Avenue, the 1,396-foot-high attenuated middle finger, and what might happen on East 74th Street, in a sense because the investment banker who grew up in Connecticut and went to Princeton wants to live near the venture capitalist who grew up in Westchester and went to Yale, not next to the 26-year-old D.J. who is the nephew of a Taiwanese land speculator and is around for 73 days of the year.
And yet the markets are clearly related to the extent that the bloated, board game figures that attach to sales in Midtown, or the Upper East Side, or the West Village or TriBeCa, and that receive disproportionate attention, produce a disorienting psychosocial effect, habituating us so that it starts to seem completely reasonable, and modest really, for someone to be spending three or four or even five million dollars on a place to live. These are the budgets of quiet, hard-working people, what Russian oil barons surely spend every year on takeout.
This recalibration of perspective is in some part responsible for the appearance of astronomical prices in neighborhoods known in recent years merely for high ones. Last month a 20-room co-op, taking up an entire floor of 404 Riverside Drive, a prewar building in Morningside Heights at 113th Street, arrived on the market at $16 million. For roughly that price a buyer could have secured the apartment Bruce Willis recently did on Central Park West in the 80s. Another apartment at 404 Riverside Drive is listed at $9.3 million (a price that the appraisal firm Miller Samuel would categorize simply as “super luxury”; the term “ultra luxury” is reserved for properties of $10 million and above).
The developers of 215 Chrystie Street, a condominium complex that in its marketing materials quotes Leonardo da Vinci, apparently regard the Lower East Side as the new uncharted territory for $18 million housing stock. Ian Schrager, who is behind the project, has called it “tough lux,” because “the building is made out of very honest, authentic materials,” or maybe because no one buying there now would have gone to Chrystie Street in 1989 without the protection of someone who vaguely resembled Steven Seagal.
The phenomenon is not limited to Manhattan. A 17,000-square-foot brownstone recently went on the market in Brooklyn Heights for $40 million, and a $6 million mansion in Bedford-Stuyvesant, which was purchased by the current owner in the 1980s for less than $170,000, has been for sale for several months. The owner, who has spent decades restoring the house, has refused offers from developers and those who have wanted to turn the house into a bed-and-breakfast, her broker told me.
Despite the popularity of Bedford-Stuyvesant and the magnificence of the house itself, the asking price is still roughly three times the cost of a great brownstone in a Brooklyn neighborhood where the number of robberies, assaults and burglaries this year is more than two and a half times the number in Park Slope. In Park Slope it is still possible to buy a brownstone off Prospect Park for under $4 million, no matter how absurd the phrase “still possible to buy something for under $4 million” might have been 10 years ago.
“There are people who are shopping for trophy properties who are architecture buffs and real estate buffs and they are shopping in a way that is much less specific to neighborhood,” Leslie Marshall, who is with Corcoran and is one of Brooklyn’s top-selling brokers, told me.
That is certainly true. The Brooklyn houses have distinctive histories and are unlike anything else. But the prevailing atmosphere also leads sellers to believe that anything might be possible. Last April, I paid a visit to a $5.3 million apartment in a glass tower in Long Island City in Queens because the price for the area was unprecedented. The owner of that apartment only just accepted an offer under the asking price, the broker told me. A modernist pile in Mill Basin in Brooklyn that arrived on the market more than a year ago at $30 million is now listed at $17 million.
“A rising tide lifts boats, but it also lifts aspirations,” Frederick Warburg Peters, the president of Warburg Realty, told me. And in the face of even recent history, it lifts those aspirations unrealistically. Over a two-year period ending in January, Manhattan sales of condominiums and co-ops over $10 million represented only 1 percent of the market. To the question, Who will spend $30 million to live in Mill Basin, “the answer,” Mr. Peters said, “turns out to be no one.”
Copyright © 2015 The New York Times Company. Reprinted with Permission. Bryan Thomas/The New York Times.