A well-known Big Apple attorney who has been chasing the city’s overheated real estate market for about a year in search of a new residence recently took the plunge after finally seeing something he liked – a luxury two bedroom apartment on the Upper East Side. He thought the asking price, $2,050,000, was high, but he agreed to it.

Alas, it was an exercise in frustration, as his real estate broker, Elayne Reimer of Coldwell Banker, was informed by the selling broker that “we already have an offer at that price.” The implication was obvious: Up the ante or forget it!

Seeing that her client really liked the apartment, Ms. Reimer advised him to raise his offer immediately by $100,000. The attorney balked at such a hike, but he did tack on another $50,000 to his bid. Unfortunately, the attorney lost out as a bidding war developed and the apartment subsequently went for $2.2 million, nearly 11% higher than the original listing price.

This incident is part of what Ms. Reimer depicts as “the hot trend in New York City real estate.” Namely, whatever the asking price, it’s probably not enough. Her experience (which she said is happening all over town): A rapidly growing number of apartments in the city are selling above the offering price, usually, she notes, by around 10%, and more often than not; such transactions are accompanied by bidding wars.

She notes that purchases of apartments above listing prices are an everyday occurrence at practically every real estate firm and currently occur in about 20% to 25% of her sales.

Ms. Reimer is one of the city’s leading real estate brokers. She sold the East Side apartment that Mayor Giuliani occupied when he ceased living at Gracie Mansion because of his marital woes.

Noting that “the market continues red hot,” chiefly because of the lack of inventory – for example, Coldwell Banker’s available listings in the current quarter are down 29% from the first quarter – Ms. Reimer tells me calls she now gets from prospective buyers have taken on a decidedly new tack. “The first question,” she said, used to be: ‘Could I make an appointment to see something?’ Now it goes something like this: ‘I’m sure what you had is no longer available because of the crazy market we’re in, but could you find something to show me?’

“Everybody is angry with me,” Ms. Reimer observes. “But what can I do? Everything is under contract. There are hardly any listings or inventories. It’s just wild out there.” The broker notes she’s even showing apartments that are sold to make prospective buyers feel good that they’re still actively looking, which helps her retain them as clients.

But what about new residential construction (which is generally synonymous with higher prices)?

Here again, notes Ms. Reimer, the market is heating up, due in large measure to growing investments in proposed construction. In brief, growing numbers of speculators are trading in apartments as they would trade in stocks. One marked difference is you put a smaller percentage down to buy real estate. For example, she notes, people are grabbing up apartments with 20% down payments, versus 50% for buying stocks on margin. By the time they have to put up more money on the real estate transaction – a point at which the apartment price is higher because construction is under way – they turn around and sell the contract.” Many people are doing it, Ms. Reimer said, “and they’re hitting lots of home runs.” She notes that many developers are also holding back a number of new apartments in the hopes of better prices down the pike.

One of the more intriguing and untold real estate stories involves a couple of stockbrokers from one of the city’s premier securities firms who quietly set up an unofficial real estate partnership in October 1993 with a starting capital of $120,000 ($60,000 each). They never did tell their firm about the deal, which involved buying apartments in new buildings under construction and reselling them before the completion of construction. As of April 1, the $120,000, I’m told, had grown to $812,000. Their firm heard about the extra activity and told the brokers to cease their real estate venture or leave. As of yesterday, they were still thinking about it, though one of the brokers told me he thought future growth was probably limited because many others are doing the same thing.

Meanwhile, the latest numbers document Ms. Reimer’s concern about rapidly shrinking listings. They come from Jonathan Miller, president of Miller Samuels, a leading real estate appraiser and one of the city’s most knowledgeable housing minds. He conducts monthly surveys on available condo and co-op listings from the city’s real estate brokerage firms. At the end of March, he tells me, the listings stood at 4,327, one of the lowest monthly levels in three years.

That’s a 16.9% decline from the recent high of 5,207 listings in October and a 31.8% drop from the 6,346 listings at the end of March 2003.

However, a year out, Mr. Miller looks for an uptick in inventories, given a great deal of construction, a sizable amount of properties in the pipeline, and rising mortgage rates. But he thinks the market will still be relatively tight then due to an improving economy and the unlikelihood of a significant rise in interest rates.