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USA: After attack, more and cheaper apartments in Big Apple.

By: Richard Leong and Aleksandrs Rozens
Published: 12/5/2001Source: Reuters
NEW YORK, Dec 5 (Reuters) - There are more cheaper and available apartments and condos in New York City as the reverberations from the Sept. 11 attacks on the World Trade Center, the layoff wave hitting Wall Street and a recession take their toll. Indeed, it is a "buyer's market" as the number of apartments for rent and sale in the Big Apple has mushroomed in recent weeks as the playing field tilted in favor of renters and those seeking co-ops and condominiums. Landlords and sellers, in addition to lowering prices, have offered incentives like absorbing broker fees and throwing lavish open houses to attract renters and buyers, executives at the city's top realtors said. While it is nowhere near an exodus from the wounded city that is driving this real estate flip-flop, the confluence has been created by business closures and relocations, families uprooted because of damaged homes and some concerned city dwellers looking for safer abodes.

"Buyers are the new cowboys in town. They are in charge now," said Scott Durkin, chief operating officer at The Corcoran Group. "We were seeing a softening already. The attacks just gave it speed." Asking prices for co-ops and condos have dropped 7 to 20 percent from their market peaks, according to real estate executives interviewed by Reuters. The drop in apartment rental prices has been less severe, anywhere between 3 to 15 percent. The once sizzling and lofty New York City real estate market has cooled and come off its high, even as demand remains firm with buyers still lining up, spurred on by low mortgage interest rates. "It's a more normal market. It's more sane," said Peter Marra, president of William B. May Co. "It is back to the basics of real estate," said Ken Malian, executive vice president, sales director at Insignia Douglas Elliman's Hudson Street office in Tribeca. "Two years ago, it was a seller's market. List it and it will sell."


Last week, 317 apartments were put up for sale, compared with 138 for the week a year earlier, and 306 new rentals were listed vs. 160 for the same time a year ago. Also, the number of listings that cut prices last week was more than double from a year ago, according to The Corcoran Group. "I have a sense there has been an uptick in listings as well. People may consider to sell because of a recession as well as Sept. 11," said Malian, who spoke from his office in Tribeca, a lower Manhattan neighborhood north of the World Trade Center. Tribeca has been a neighborhood hard hit by the attacks. Apartment sales in the once-coveted area have shown life only recently after grinding to a halt after Sept. 11th. "That market just died, but it looks like it's coming back," Marra said.


In acts unthinkable before the attacks, landlords and co-op owners are cutting prices and dangling incentives such as a month's rent for free and a year's worth of Internet access to lure renters and buyers. Prices on co-ops, condos and townhouses across the city have fallen 7 to 20 percent from their recent peaks. Values on top-end dwellings, those above $5 million, have suffered the bigger declines, and those below $5 million have fallen less, Durkin said. For example, the asking price for a townhouse owned by auction giant Christie's in the tony section of midtown Manhattan was recently dropped to $20 million from $23 million, equivalent to a 15 percent decline, according to Durkin.

On the other hand, owners of one-bedroom co-ops, once asking for $300,000, have lowered their prices to about $290,000, a modest 3 percent decrease. Malian said that while there has been an increase in listings of properties and prices are not being chased up by bidding wars, New York City property values are still at highlevels. "Some owners are willing to pay all or part on a rental commission," said Malian. But, he pointed out, "I don't see sellers coming off of their prices so much. This has kept contracts down. Buyers tend to look for bargains." While there is no clear consensus how long the downturn will last, sellers and landlords now have to work harder and to be willing to negotiate, real estate executives said. "Everything is up for discussion. Before the sellers didn't have to do anything except for the lights to be on," Durkin said.