clips

January 30, 2005 Sunday
Real Estate

By ANNA BAHNEY


THIS may be no consolation for search-addled apartment hunters addicted to checking the real estate Web sites hourly for new listings, but there are very few apartments for sale in the $20 million range, either.

From the stratospheric and record-breaking echelons of the market to the pedestrian pulse of stampeding open houses, hungry buyers are circling, ready to swoop in on any new listing and pay way above the asking price. If, that is, there were anything to buy.

The conclusion of the presidential election and the understanding that interest rates are bound to go up (even though that's what was anticipated last year and there was not a significant increase) have people so focused on buying now that they are showing up by the dozens for open houses in 15 inches of snow and waiting in line to see apartments over a three-day weekend when one would think the preferable alternative would be a weekend in Miami.

Is it a frenzy?

Do agents get worked up when they run out of showing sheets at open houses when four times as many people as they expect show up? Do buyers become even more aggressive when they repeatedly lose out on bids they placed over the asking price, including some as high as $300,000 above? You bet.

A market report released earlier this month by Stribling Private Brokerage on the residential real estate market in the $4 million and above range said that the high-end market has not seen this kind of activity since 2000. The first quarter of 2004 started off with a blast but evened out in April, and the entire real estate market, from top to bottom, collectively held its breath last fall through the distraction of the presidential election. Then, people started buying real estate as if it were 2000 all over again.

''As contentious as the election was,'' said Kirk Henckels, director and senior vice president of Stribling Private Brokerage and the author of the report, ''I don't think people cared as much about who won as they wanted a decisive winner.''

President Bush's victory, he said, might have had a slight effect on the high end, encouraging more spending because of the favorable tax picture for the rich.

Last year, for the first time, more than $1 billion was spent on co-ops in New York priced over $4 million. That was up 59.5 percent from the $653 million spent in 2003. The momentum is continuing into the new year. In these first few weeks of 2005, there is already $484 million in pending co-op sales -- nearly half, in less than a month, of what was spent all of last year.

The highest segment of the market is also active. In 2004, 24 co-ops in Manhattan sold for more than $10 million, compared with 15 in 2003 and 18 in the previous peak of 2000. Several of the biggest deals took place in the second half of 2004 (with 13 co-ops and 5 town houses over $10 million sold in the first half and 11 co-ops and 11 town houses sold in the second half).

Even now, barely across the threshold of 2005, the numbers of sales above $10 million are set to top 2004. Currently, there are deals on 16 co-ops and 7 town houses pending, including some notable properties such as the $44 million offer for Laurance S. Rockefeller's apartment on Fifth Avenue, the $27 million pending sale for a condo at the One Beacon Court and a more-than-$20-million bid on Central Park West. ''They all go shopping together,'' Mr. Henckels said of this group, which is largely impervious to the machinations of the real estate market and spend when they feel comfortable with the way things are going in the world.

When Samantha Kleier Forbes, a vice president of Gumley Haft Kleier, held an open house for brokers to preview a $10.9 million penthouse at 1120 Park Avenue last week, she took 40 show sheets, figuring it would be more than adequate for the 10 or 12 people she expected.

''Within the first 45 minutes we were out of show sheets,'' she said.

Her sister, Sabrina Kleier Morgenstern, also a vice president with the firm, said she felt the heat from the buyers' perspective when she took a young couple to an open house in the 70's on the Upper East Side, where they jostled among the crowd of 30 other people, mostly young couples staking out corners of the place to have sotto voce conferences with brokers. The couple immediately wanted to bid on the $1.3 million property and liked it so much they raised the price by $300,000 and offered $1.6 million.

They were outbid, with an offer of $1.695 million accepted. Ms. Morgenstern was even more surprised, in the days after the other offer was accepted, that the pending buyers didn't back out. ''I kept calling,'' she said, ''because I thought the people would have thought 'I overpaid drastically' and would have pulled out, but they didn't.''

In the market for apartments priced at less than $1 million, agents are taking any property they can get their hands on to the market, pricing them slightly under what they consider a logical asking price, then standing back and watching as the hordes descend. To their surprise, nothing seems to stop a serious buyer, not wind or rain, or in the case of the last two weeks, not holidays or snow.

Ginger Brokaw, an agent for the Corcoran Group, held her open house last Sunday even with the city muted in a perilous sheath of snow. She didn't expect much.

''Here I am walking down the street with red tulips under my arm and a little scented candle,'' Ms. Brokaw said. ''I walked in the building full of earnest possibility. The doorman looked at me like some kind of pathetic little creature.''

Not only did 25 people show up for the Upper East Side two-bedroom, two bathroom co-op priced at $975,000, she got an immediate offer within an hour of the open house.

''I'm scared to answer my voice mail and hear 'You have 30 messages,''' she said. ''There are so may people calling to see the apartment. At this price point there aren't that many places out there.''

While Ms. Brokaw was trudging through the snow, Gabriel Bedoya, a Corcoran agent, was playing in the snow.

''For the first Sunday in a year and a half, I didn't have an open house,'' Mr. Bedoya said. But it was not because of the weather, it was because he didn't have any apartments left to show. Since the beginning of January, he said, he has accepted offers on nine properties. That is a huge increase over his volume last January, when he also had nine listings but only two accepted offers during the month, he said

The Sunday before last, during what he thought would be a long and quiet holiday weekend, he had the first showing of a one-bedroom duplex at 86th Street and Amsterdam Avenue during an open house. Expecting 25 people, he was stunned when he had 125 people come through. The line of people waiting to get in, which stretched down Amsterdam Avenue, was monitored by the building's concierge like a velvet-rope club with six people allowed in whenever six left.

Even before the open house concluded, his cellphone was ringing with people calling from the hallway trying to place bids.

On behalf of the sellers, Mr. Bedoya accepted an all-cash offer above the asking price of $549,000 within 24 hours, which is why when it snowed last weekend he could go sledding in Central Park.

Haley Coward, an agent for Coldwell Banker Hunt Kennedy, said she couldn't cancel her open house last Sunday because she had 28 people pre-registered to see the $530,000 one-bedroom co-op with 1,000 square feet on West 94th Street near Columbus Avenue.

''I didn't think all of them would come,'' she recalled. ''I certainly didn't think it was going to be that crowded. It was like a party.''

She handed out cream puffs she had made while her boyfriend manned the door downstairs. More than 70 people came, and by Monday she had 13 offers. ''Right now we're looking at getting $60,000 to $70,000 over asking price,'' she said

Caroline Guthrie, president of the high-end brokerage firm Edward Lee Cave, called the market ''frenetically static'' because there is so much activity with nothing to show.

''It is incredibly frustrating,'' Ms. Guthrie said. ''Buyers can't believe it. They must be thinking, 'You're not doing your job!' But there is nothing to show unless I've managed to get into something that isn't on the market.''

''There are very frustrated buyers and a lot of frustrated brokers out there,'' Ms. Guthrie said. Some sellers may feel elated, but many have to find another place. The only ones able to keep their heads, she said, are the owners who ''feel very good about their properties and have no intention of going anywhere.''


Copyright 2005 The New York Times Company