The Article That Might Finally Shut Julia Up

NYT: Prices Say It’s Time to Think Studios http://www.nytimes.com/2011/03/27/realestate/27cov.html?_r=1&hpw WHEN New York’s real estate market was at its dizziest height, $1 million studios had become routine and buyers with less than $250,000 to spend were almost surely headed out of Manhattan, perhaps even to another state. But in a clear sign that the city’s recovery is still elusive, the... [more]

NYT: Prices Say It’s Time to Think Studios http://www.nytimes.com/2011/03/27/realestate/27cov.html?_r=1&hpw WHEN New York’s real estate market was at its dizziest height, $1 million studios had become routine and buyers with less than $250,000 to spend were almost surely headed out of Manhattan, perhaps even to another state. But in a clear sign that the city’s recovery is still elusive, the studio market has gone soft again — just as it did in the last recession. Prices have dipped to 2005 levels, making it possible to find studios in Manhattan in the $200,000s — lots of them. And they don’t all face a brick wall or involve a lengthy hike to the subway. The average price for studios dropped to $404,326 in 2010, from a high of $500,479 in 2008, according to the Douglas Elliman Report, an analysis of the decade’s sales data. A recent search of Manhattan listings on The New York Times real estate site and on Streeteasy.com found close to 200 studios available for $300,000 or less. An article about studios in The Times in 2009, before the market had bottomed out, found only a handful of studios in that price range. If now is a good time to buy a studio, though, the converse must also be true: it’s not a great time to be selling one, especially if the seller hopes to get a high price. “It’s been years since we’ve seen studios in prime neighborhoods priced this low,” said Jill Sloane, an executive vice president of Halstead Property who has a Murray Hill studio listed at $285,000. “Studios are hard to move right now.” She and other brokers say that while there will always be first-time buyers hunting for studios, many in this pool are now reaching instead for one-bedrooms, whose extra space will make them livable for longer than a studio. One-bedroom prices, too, have dropped — by nearly 20 percent — making them affordable to more people. Studios in recent years accounted for about 17 percent of all apartment sales in a year, but their market share dipped to 11 percent in 2010, according to data provided by Jonathan J. Miller, the president of the appraisal firm Miller Samuel and a market analyst for Prudential Douglas Elliman. The last time the market share for studios dropped by such a high percentage was two decades ago, when it fell to 9 percent in 1991, from 15 percent in 1990. “Market share for studios tends to drop off when conditions are weak,” Mr. Miller said. On the flip side, he added, “when prices are rising, studio sales increase as people get priced out of the larger units, and they buy studios because that’s all they can afford.” Many of today’s lower-priced studios are in co-ops, which can have strict policies against subletting and may not allow pieds-à-terre or buyers who need financial help from family or friends. The restrictions narrow the buyer pool, forcing owners to reduce asking prices. Still, studios in the lower price range, especially in sought-after neighborhoods, are more than likely to have a drawback or two. Rado Varchola, a senior vice president of Citi Habitats, has a studio at 92 Horatio Street, in the West Village, that came on the market nearly a year ago at $399,000 and is now listed at $300,000. In a coveted area, the apartment is also in an elevator building with a live-in superintendent. Maintenance is $676 (plus an $80-a-month assessment until the end of 2011). But it only has about 330 square feet of space, and cannot be sublet until the owner has lived in it for at least two years. “I’ve talked to people on the phone who are convinced they want to buy this apartment, but then they see the size and I don’t get an offer,” Mr. Varchola said. The rental market for studios is stronger; he said that the apartment could easily rent for about $2,000 a month. “If this was a condo or the building had a more lenient sublet policy,” he said, “it would have been sold a hundred times already.” At a similar building on West 64th Street that is made up primarily of studios and one-bedrooms, Ms. Sloane advised several studio owners within the last year to rent rather than try to sell. “I told them: ‘You’re not going to get the highest prices for this building right now,’ ” she said, adding that there are dozens of studios for sale in the neighborhood. A few of them are represented by Fern Hamberger, an agent at Citi Habitats. She recently had three studios available for $245,000 at 244 Riverside Drive; two are now in contract. “That’s an unheard-of asking price for this neighborhood, right on top of Riverside Park and right near the 96th Street subway,” she said. All three apartments, which are owned by an investor and need renovating, came on the market in early 2010 at $315,000. “Last year wasn’t so hot,” Ms. Hamberger said. “But we lowered the price and now we are at the right price.” Michael Murphy, a vice president of Prudential Douglas Elliman, said the owner of a studio in Chelsea, at 101 West 23rd Street, tried selling it two years ago, then rented it out for a while, and has decided to list it again, even though he will probably take a loss. “It would be easier to rent than sell,” Mr. Murphy said, “but the owner is just ready to move on.” The apartment, in a doorman building, came back on the market last summer at $255,000 and was recently reduced to $199,000. With approximately 550 square feet of space, it is one of the roomiest studios available in this range, but it has a hefty maintenance fee of $1,257 a month. Mr. Murphy said most of the people who had checked out the place were young first-time buyers looking to move out of a rental and to start building equity in a home. The buyer pool is much the same for the $279,000 studio at 304 East 73rd Street represented by Jennifer Ferland, an agent at A. C. Lawrence. That apartment, in a prewar elevator building, has about 480 square feet and a wall of windows that overlook 73rd Street. Its largest drawback may be that it is steps from Second Avenue, which has been overrun by subway construction. “A lot of the people who have come to look are first-time buyers,” Ms. Ferland said. “And they’re looking because they feel they should be looking and they think it’s time to buy.” Sydney Frazier, a 33-year-old interior designer, fits that description. He started his search in the middle of 2010 and saw dozens of studios south of 34th Street for under $350,000. “It was a little depressing, because for that price I could have a very large house anywhere else,” said Mr. Frazier, who is from Alabama. “And here I was looking at one room, sometimes with no separate kitchen or any kind of closet.” But with prices and mortgage rates down, Mr. Frazier felt it was time to move out of his one-bedroom rental in Astoria and to buy in Manhattan, even if it meant less space. He wound up buying a “teeny tiny” studio in the heart of Greenwich Village for less than $300,000. He has been living there since late December and plans eventually to redo the kitchen and bathroom. “It suits the lifestyle I have right now,” he said. “I’m never home; I just need a nice place to lay my head.” Lisa Holland-Davis, a vice president of Halstead, has several studio listings on the Upper East Side. She said they had attracted both first-time buyers and people looking for a pied-à-terre. “They want someplace in the city to hang their hat, but not have heavy overhead,” she said. One of her listings is a studio at 345 East 77th Street, a prewar elevator building with a live-in superintendent, asking price $235,000. The monthly maintenance is $503. The apartment has a Pullman kitchen and looks out on a dark interior courtyard. An apartment with a view, Ms. Holland-Davis said, would naturally cost more. “Most apartments in this price range are in walk-up buildings that don’t have a laundry or a resident super,” she said. “What $235,000 buys you is a piece of Manhattan.” On the Upper West Side, a few studios are available for around $300,000 in prewar doorman buildings right on Central Park West. Margaret Bay, a vice president of Brown Harris Stevens, has a studio at 257 Central Park West listed at $275,000. “It hasn’t been touched since the mid-1970s,” Ms. Bay said, explaining why her listing does not show any photos of the interior. “But there’s been enormous activity on it because the location is great.” A few blocks away, at 225 Central Park West, is a studio with a “sidelong view of Central Park” that was listed at $319,000 last December with a maintenance of $840. It is now in contract. Brian Lewis, an executive vice president of Halstead, was the listing agent. “We had to be really attractive with the price,” he said, because the building, known as the Alden, requires a 35 percent down payment and does not allow pieds-à-terre, investors, guarantors, or parents buying for children. “Those kinds of restrictions protect the building’s share value,” he said, “but they can be very limiting for small apartments.” The limits did not keep Timothy Dawson from his recent purchase of a $280,000 studio in the building. Mr. Dawson, an equity trader, lives in a one-bedroom on the Upper West Side but was looking to downsize after a divorce. His new place faces west and has wide-open city views, but it was the location that won him over. He and his Labrador retrievers, Butter and Sable, take daily walks in Central Park. Noting that the comedian Jerry Seinfeld owns a place next door at the Beresford, Mr. Dawson said, “You can buy a home with great light and views for under $300,000, be one block north of Seinfeld, and feel pretty good.” [less]