Open House Reports 6/22/08

Many thanks for your many insightful comments on these message boards. What is your sense as to how the classic 6/7 market in the UWS is going to fare over the next year (I'd really value your opinion for those that are above 90th street i.e. the upper upper west side).

Thanks, West81. I really look forward to reading your open house reports. I like to hear your thought process in evaluating these apartments and for taking the time to share your opinions.

Callidus/Newbie: My pleasure. As for the direction of our little market niche, I have noticed in the past month or so that several of the more attractive listings with reasonable prices and/or deep price cuts have gone to contract, generally when the asking price got to around the level of 2005/2006 comps. That suggests there are buyers on the sidelines who are moving in once the froth gets squeezed out of the price on the apartments they want. That might mean the market is finding broad support at that 2005/2006 level; or it might simply mean that a few buyers are willing to risk "catching a falling knife", as long as the knife is nice enough. Listings with significant issues are getting killed, and judging by open house turnout and broker morale, that trend will likely continue.

Saw 320 CPW (Ardsley) 2d bedroom that needs a gut renovation listed at 2.995m--Good light high floor- two long planting terraces- one with a side view of the park. Saw only 3 names on the sign-up sheet- Broker indicated there was some flexibilty in the price. ALso saw a renovated 3 bd apartment at 333 CPW(Turin) for 3.7 m. 3d floor full park view; interesting techy renovations (not my taste) price has come down substantially; the hallways and lobby were depressing. SInce this in not our normal price range, I really can't give much of a sense of worth.

I went to several on the UWS mainly 1BRs and was pretty much deserted. Prob combination of rain and summer. Most of the ones I saw will be on the market for a while b/c they seem overpriced compared with the apartments that are moving. Disappointing to brokers I'm sure.

I think you are correct West81st. When the apartment has a good price/value relationship, they are selling. Many people want to buy, they just are not willing to pay top dollar in what they view as a declining market. Your comment about 2005/2006 price levels is an interesting one. While current inventories are high, they are somewhat stale. Same over priced apartments, same new constructions that are unable to cut prices because they have not closed on the units sold a year ago when the market was stronger...these apartments seem to languish. Sellers who don't need to move, aren't. A seller realistically priced may find themselves selling quickly. There is an old saying, "The bears get a little, the bulls get a little, but the piggies don't get anything."

A few additional thoughts for Callidus:

Regarding sixes vs. sevens, this is a tricky question. The obvious answer is that sevens should hold their value better in the near term, as a simple function of supply and demand - there are far fewer of them, and there are a lot of families that want/need that extra bedroom. 535 WEA shows that the appetite for big apartments remains very strong, at least at the high end. In the longer term, sevens (and eights) might suffer as the baby boomers turn to empty nesters en masse and a few luxury buildings along CPW, WEA and RSD siphon off the affluent buyers; but that prospect is beyond your one-year time horizon, and the UWS is likely to remain a strong family neighborhood anyway, so sevens have a pretty solid floor under them. They will fall along with the whole market if incomes stagnate, credit remains tight and the local economy/quality of life slip, but at least the supply-demand balance is favorable.

I think sixes are a more vulnerable segment. The market seems somewhat glutted with overpriced 2BRs, and fewer buyers seem to be falling for the bubble-market trick of cutting the dining room in half, repackaging a classic six as a 3BR, and pricing it as such. Maybe this is just a short-term correction. Sixes are still a good solution for a lot of people, so I wouldn't predict a crash - just a continued widening of the percentage spread between apartments of, say, 1200-1600 sq.ft. vs those above 1700. Just my HO.

With regard to your north-of-90th question, I think it depends on the avenue, just as it always has. Once you get above 93rd or so, the area between Broadway and Columbus is more vulnerable than superprime UWS. It's still prime, and I think prices generally reflect the slight difference in risk. 96th seems to be less of a dividing line than it used to be, with Ariel and 455 CPW solidifying the western and eastern borders of the dicey zone that used to exist south of Columbia. And of course Columbia itself is transforming Morningside Heights.

Thanks West81st for a great review. Your commentary has been very insightful.

Most buyers come through private showings, not open houses, so I would not judge the market based on open house attendance.

Thanks for your reviews. I do want to add that the city in general seemed quiet this w/e. CP was deserted on Sunday. So some of the slowness may be summer beach go-ers.

Having said that, a friend of mine is listing her 4bd UWS co-op. She decided not to do an open house at all. Her broker told her houses don't sell generally from open-houses, and my friend doesn't want to be entertaining people or educating buyers by holding an open house -- her opinion not mine. Just something to think about.

LP1, I would encourage your friend to challange his/her broker on that logic, it doesn't make any sense to me at all. Maybe the broker is afraid the apartment will become part of a West81st review calling out all warts, history, and comps? Could West81st be a market changer?

Within obvious limits, open houses have their uses for reading the market. For example, I have noticed a pretty strong anecdotal correlation between high open house turnout and a listing going quickly to contract. That doesn't mean the buyer was found though the open house, but it does suggest that more people turn up to look at listings that are appealing and fairly priced. Open houses also offer a good opportunity to chat up brokers, especially when things are slow.

JuiceMan: I doubt it. Fun idea, though.

LP1- Tell your friend that I think her broker would rather be at the beach instead of hanging around another empty open house. HAHAHA....

"anecdotal correlation"

Do explain what that means.

I think everyone should go to the beach for the next 12 months and then negotiate when inventory reaches 15,000.

West81st....thanks, as always, for your reports. Much appreciated.

stevejhx: All I meant was that I think the two things are correlated, but I haven't done any careful analysis, just casual observation.

oh.

Two more reports from evening open houses on Monday, June 23rd:

340 West 86th Street, #3A
2 beds 2 baths Condo, Upper West Side
↓ $1,795,000 CC $1179 RET $565 Assessessments approx. $600
Traffic: Light.

Elegant, lovingly restored five-room apartment just off RSD. The layout is slightly unusual, in that one full bathroom is en suite with the parlour/library. As a result, that room is quite useable as a guest bedroom, or even as a master in a tight 3BR setup. The moldings and plasterwork are well preserved, and the current owners rehabilitated the pocket doors between the living/dining room and the library, so the entertaining areas have a very authentic Victorian/Edwardian feel. The kitchen and baths are nicely renovated. The owner/broker is downsizing, so while this isn't a distress sale, there may be room for further reduction. One concern would be the state of the building; the hallways and elevators are a mess, and assessments seem to be a permanent fact of life here. Doorman is part-time, and coverage appears spotty even during the covered shift.

334 West 86th Street, #7A
3 beds 2 baths Co-op, Upper West Side
$2,595,000 Maint.$1790
Traffic: Light

Newly-listed classic seven with a layout that truly would convert to a 4BR rather well, with all four bedrooms together in a wing and a reasonable dining area left after carving out the extra BR. The three existing BRs are reasonably sized; the master is a bit narrow, but one of the others is ample for two kids of the same gender. The first two BRs and the slightly narrow living room face north across 86th Street. The view is a nursing home (or, if you prefer, an "assisted living facility"); at this elevation, though, it looks like just another UWS co-op. The third BR has open views to the south and east. The kitchen is quite functional but also quite dated, with high-end Euro appliances from the 80's and - I think - poured concrete counters and sink. It's quaintly retro until you look closely and see that eveything is starting to crack or peel.

The starting price here seems to be in the ballpark - maybe 5-10% high in a slow market. 6A sold for $2.416MM last year, and was probably in better condition.

West 81st.....are you a broker?

Curiously: You're kidding, right?

yes...just my dry sense of humor....I like your open house write ups....I too have seen alot of these UWS apts. and even though the market is slow and price pressure exists, I believe as an optimist that buyers are out there, people still have money to spend and properties will sell....it's getting the right buyer to fall in love and deals will close as prices are starting to correct a bit.

also W 81st.. ...I saw a previous thread you were on chatting about on 239 CPW 4C....I don't see that listed anymore..did it go to contract?

curiously: I think it's more likely that the Elliman listing expired, or that it was withdrawn temporarily to "freshen" it (which happened once before with the same apartment).

Regarding 334 W 86th st. And in a more general sense too... 7A is a legit 3BR, abour 1800 sq ft and offered @ $2.6mm and likely the 'right' price is $2.3-2.4mm. Ok. #5B is a legit 2BR, about 1400 sq ft and isn't moving at $1.475. Can that extra 300-400 sq ft really be 'worth' $700-900k? Is it 'rational' for the 3br to cost nearly $2000/sq ft? Sure there is a scarcity factor to be applied, but is it really that large? I find it kinda odd.

walterh7: I think 7A is close to 2000 square feet (at least the way brokers measure), so the price per square foot is nowhere near $2000. Even if the footprint is only 1800, the unit price is still south of $1500.

On your more general question, yes, there is a notable premium for a legit 3BR - especially one like this that would convert to 4BR and still have a reasonable dining area, plus a maids' room to play with if you wanted to expand the kitchen.

That's one reason you see a lot of classic sixes marketed as 3BRs, as sellers try to get on the right side of that arbitrage.

I didn't write that very well. What I meant to ask is if it is rational for that 3rd bedroom to trade for $2k/sq ft. Meaning the marginal cost/sq ft is high. And if so, why aren't more new construction projects including 3BR's (or more of them)? That would seem to be the logical approach to capture that arb. (though I guess that all developers/landlords/operators want a good mix of sizes)

west81st: 315 w 86 penthouse B—is it the one listed initially for $1.5M, then down to $1.390 and bought for $1.270?

Stakan: I don't know. The Streeteasy history of that listing looks weird - a year to close?

walterh7: The answer is different for each project, and it's a complex combination of geometry, economics and demographics. For that particular block, your intuition appears to be 100% correct. Check the apartment sizes at 535 WEA. Clearly, Extel thinks bigger is better, and the sales so far support their approach.

West 81st...in your opinion, is there still a premium being added to apartments on park blocks between Col and CPW as opposed to between B'WAY, WE and RSD? Or has that gone away? That said, how would you compare 334 West 86th to 15 West 84th which are similarly priced from your reviews?

Curiously: I think addresses in the 300s are priced similarly to addresses under 100 (excluding the museum blocks of 81st and 77th), assuming the properties are comparable. One caveat, though, is that the housing stock between CPW and Columbus - especially the townhouses - is some of the nicest on the UWS. Many of the blocks between WEA and RSD are beautiful, but there are still some fairly dilapidated buildings in the 300s that bring down the average there, whereas nearly everything east of Columbus has been fixed up already.

With regard to the two apartments you mentioned, I think 334 W.86th will trade a bit higher, simply because it's bigger. 15 W.84th will probably get a better sq.ft. price because it's in better condition, the space is more efficient, and it's in the catchment for a better public school. Just my two cents.

West 81st...you're like the batman or catwoman of this site with your hidden identity...or maybe Alfred(wise and all knowing) thanks for ur insight and opinion.

curiously: Thanks. I have to throw curveballs where my identity, residence and occupation are concerned. But I try to offer honest opinions about everything else.

Juiceman -- my friend's apartment, the 4bd UWS, just went into contract. It was on the market for @ a week, with no open house. So her broker and their price point were right on target.

LP1: Mid 70s, listed with Corcoran? If so, nice place, and she seems to have gotten a good price.

West81st: many thanks for your insight.

201 W 89th is "temporarily off the market", what does that mean? They going to change brokers and or price?

All the others from 6/22 seem to be still available....I went to see 15 W 84th and it is truly a great apartment with a very nice renovation and layout. Second floor, but still decent light, garden views and very quiet.

I am surprised these two have not sold yet, even in this crap market.