Against Odds, City Market Going Strong

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The New York Sun

Contrary to the nationwide housing horror show, business here appears to be solid, and some even say it’s again a seller’s market.

Typical is what I hear from two of the city’s more successful real estate brokers, Elayne Reimer and Deanne Esses. In an interview about eight months ago, both were down in the dumps. Their business had essentially slowed to a crawl from the blistering housing sales pace they enjoyed during the torrid years of 2003–05. As a result, both women speculated that New York City could be falling prey to the national housing sales slump.

No more such speculation. The women now tell me the market is perking up, with Ms. Esses, a senior vice president of Bellmarc Realty, describing her business as “on fire.” The other, Ms. Reimer — one of Coldwell Banker’s top brokers, who sold Mayor Giuliani’s East Side apartment — characterizes current sales as “quite strong” and says she’s enjoying her best year ever, both in sales and commissions.

Spirited activity is also reported by two other real estate heavyweights, Brown Harris Stevens and Sotheby’s.

A spokesman at JPMorgan Chase, which offers mortgages, says the real estate sales market is “very lively.” Demand for mortgage money is quite brisk and, contrary to what one might think, given all the reports about credit tightening, readily available for creditworthy borrowers. That’s not the case, though, I’m told, for younger buyers with limited credit histories.

Ms. Esses further tells me that banks like Chase, Citibank, and Wells Fargo, as well as mortgage brokers, are so hungry for borrowers that they’ve been offering no points, low rates, and pre-approval of mortgage commitments. On September 11 alone, she observes, she received more than a dozen calls from mortgage people soliciting business.

Likewise, she says, both banks and mortgage brokers have bombarded her with a variety of perks, including free passes to the recent U.S. Open, theater tickets, invitations to parties, and a host of luncheon invitations. “I can’t remember ever being so popular,” the 64-year-old broker says.

In sharp contrast, about eight months ago, a despondent Ms. Esses told me, “The real estate business in the city has dropped dead and there is a flood of inventory on the market.”

Indicative of a more solid market now, Ms. Esses notes, about a week ago she held an open house for a relatively small 1,100-squarefoot two-bedroom apartment on Third Avenue in the low 80s, which she describes as “nothing special.” The asking price: $1.15 million with a 20% down payment. The open house drew 28 lookers, including a couple who bid $1.1 million on the spot. The offer was accepted and a contract is now pending.

Ms. Esses credits much of the housing vigor to a surge in the number of younger buyers, lots of money around, relatively low mortgage rates, and the falling dollar versus the euro, which is attracting a growing number of overseas buyers. Likewise, she adds, “There is only one Manhattan.”

What about all the additional supply arising from the increased development of new buildings? “Just go into those buildings,” Ms. Esses replies, “and you’ll find the apartments are already 70% or 80% sold. Someone is obviously buying them.”

In general, she sees no big increase in listings and says they are about on par with a year ago. The current quarter’s prices are easily 10% higher than year-earlier levels and roughly equal to the prior quarter, she thinks.

She notes that Chelsea and TriBeCa, two of the city’s hottest locations, have gotten extremely expensive, “beyond imagination.” Yet people are buying. “I show clients Chelsea and TriBeCa lofts, also some in the meatpacking district, running from $1.7 million to $2 million, and they thank me. It’s like I’ve introduced them to the world’s greatest bargains. It’s insanity, but the buyers will never believe it.”

Coldwell Banker’s Ms. Reimer, though pointing to strong sales, isn’t as exuberant as Ms. Esses. She thinks prices have plateaued, running about where they were in the prior quarter. Potential buyers, she finds, seem worried about the state of the economy, they’re a bit more frightened, and they’re not rushing in. They’re still buying, she says, but not at the inflated figures some sellers are asking. Still, Ms. Reimer says, “I think buyers have come to grips with the fact that the city is a special market into itself, that prices here, contrary to some previous expectations, are not coming down.” She describes inventories as a little depleted but starting to trickle in a bit. At least part of the reduced supply, she believes, reflects the slowdown in new construction.

As for different price categories, she finds that anything under $1 million sells immediately. The $2 million to $3 million market, she says, is still going well, while $3 million and up has slowed.

For years, people have been saying the city has become a city for the very rich or the poor. Ms. Reimer finds this to be increasingly the case. “Middle-class housing is definitely vanishing,” she says.

dandordan@aol.com


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