Buying in the high-end, $7m+

Of course still risky but there are plenty of deals. Check out the new condos at Union Square.

Have to respectfully disagree. I think if you're seriously looking to buy 'downtown' in this market at the high end, you are far better off going with the tried-and-true areas that weathered the last financial difficult period with the best results. I would suggest a carefully selected AAA+++ location in Greenwich Village (either West Village or Central Village). For $7MM(+), you should be able to buy a beautiful townhouse.

Although I have absolutely no involvement (financial or otherwise) in the following suggestion, I am just throwing it out there as a place that I found very quickly on streeteasy for $7MM that is in the Village on a private, gated mews (with parking) that is a beautifully renovated just-bring-your-toothbrush kind of townhouse that I think would hold value as well as anything else in the area, given the larger financial environment we all find ourselves in -

http://www.streeteasy.com/nyc/sale/358254-anyhouse-7-macdougal-alley-greenwich-village-new-york

I would much prefer this from a financial perspective as opposed to Union Square.

7 Macdougal Alley is Dan Loeb's old place (the hedge fund manager who bought the penthouse for $40m at 15 CPW).

If you are talking about something unique then it is a much safer buy than a box cutter apartment in a new development (yes it might be large but does not have anything special). The properties holding their value the best are those that are difficult to find and have something special about them. The "high end" in new constructions are definitely taking a hit over older architecturally unique high end properties (with the exception of 15cpw). I have a lot of experience in this and I only work with this type of product. I would trust the investment of a New York City unique apartment over anything right now. I agree with nyc 10011 in the comment of going with tried-and-true, I would not suggest going downtown right now.

This is the market I monitor (not so much Tribeca, but SoHo, West Village, NoHo). I have had a Streeteasy search set up for months where if a $4m+ apartment decreased their price by more than 5%, I would get an email. I used to get maybe a few emails per week, now I get multiple emails almost every day from that search.

The search shows there are 50 listings in downtown who cut their price at least 5% in the last 60 days:

http://www.streeteasy.com/nyc/sales/downtown-manhattan/price%3A4000000-%7Cprice_changed%3C60%7Cprice_changed_pct%3E%3D5

So it is "safe" to buy? I think there are more price cuts to come, the only question is how much. Depends on your need to buy versus rent (lots of high end rentals available right now). I think another 20% down is likely to happen, and perhaps more.

For $7m in SoHo you can get a huge high floor loft in the old New Museum building:

http://www.streeteasy.com/nyc/sale/361704-condo-158-mercer-st-soho-new-york

Or for a new building try 40 Mercer (cool window walls that slide open but small kitchens):

http://www.streeteasy.com/nyc/sale/274899-condo-40-mercer-st-soho-new-york

I just bought a condo four months ago, I used a knowledgable broker that I felt very comfortable with. I spent just over $10,000,000 and could not feel any better about my decision. I recommend you find someone that knows NYC high end market. LuxuryNYCBroker said find something unique, I agree, if you are dropping at least $5+M it needs to have something extra but find a broker that knows different buildings in the city and can help you with this. It will help you a ton of time and probably save you literally millions of dollars......

I agree with modern that 'there are more price cuts to come, the only question is how much.'

As for buildings like the old New Museum building or 40 Mercer, I think for that price point ($7MM or more), a townhouse is where it's at - as compared to a condo/coop in a multi unit building. And I don't like the SoHo location nearly as much as the Village, in terms of holding value. I particularly do NOT like 40 Mercer - the location when you walk outside of the building is utterly without any charm, and the 'window walls that slide open' are only nice when you're not choking on car fumes and hearing the significant traffic noise from nearby Canal and Broadway.

i don't know what you people are smoking--NO it is not safe to spend $7 million on NYC residential real estate right now. modern is absolutely right: the market is totally stagnant and beginning to decline. if you buy now you are catching a falling knife and none of us has any idea how far or how quickly it will fall.

i hope ski1980 has at least $20 million left over after his purchase, or i don't think he will feel good about his purchase for long. if you are enormously rich, go ahead and spend the $7 million plus, but if that is a significant portion of your net worth, or you are a person who does not enjoy losing huge amounts of money for no reason, then hold off. the market is heading down fast.

knowing the high end of the market relatively well, i expect it to be the RISKIEST portion of the market. at $7 million plus, you are talking about discretionary purchases. people need to live somewhere, but they don't need to live in $7 million properties. the top end of the market is going into a downturn of epic proportions. rent something fabulous for a year or two (the rental market is in major decline as well) and then either buy that $7 million property for $3 million, or buy a $20 million property for $7 million.

take my advice.

40 Mercer is a nice building, but the location is awful. Too loud and way too many tourists.

happyrenter, have you ever owned in the city? Just curious because I could definitely re-sell my condo and make a decent amount. It is all about finding a place that don't come to maket very often. This market provides amazing opportunities, if you have the cash on hand you can get amazing deals on places that come available every 50 years. I was lucky enough to have a broker that specializes in these types of places and knows when a great opportunity arises. It is all in the place you buy. I would not recommend going to a sales office and buying a penthouse for millions of dollars, I agree with happy renter it will go down further but other places are not like that, they not only hold their value but will increase because there isn't anything else like it.

yes i have owned in NYC. i sold in 2007 and now i rent. my parents have owned in nyc for over 30 years, and my grandparents have owned in nyc for over 60 years.

if you bought your apartment four months ago how, exactly, do you think you could "make a decent amount" by selling it now? do you think the market has gone up? i mean, if they could have gotten more money for the apartment don't you think the previous sellers would have done so? what has magically happened to you apartment in four months that it has gone up in price while the rest of NYC real estate has ground to a screeching halt and declined about 20%? if your place is so desirable that it would command $12 million now, why did it only command $10 million four months ago?

I tend to agree the West Village will hold up better than SoHo or Tribeca, but not sure townhouses are the place to be. You do tend to get more space for the money. But I own a house now, and don't want to be bothered anymore with taking out the trash and shoveling snow (I know, you can hire people but it is still a pain). And if you travel a lot the lack of a doorman for packages etc is an issue.

But nice streets like Jane Street have lots of them and I have a friend with a townhouse there who loves it. But his 14 feet wide is too narrow for my liking, and most townhouses in the village don't have elevators either. I am not getting any younger and don't want to have to move again when I am old and decrepit.

unfortunatley someone ran into some financial misfortune and I was able to "bail them out" (I figured that term is used so much I wanted to use it too). They owned 7 beautiful properties here and had to sell a few of them. I know I could sell it now for more than $10M but want to now make this my home for my wife and I. This is what I mean, NYC is full of great opportunites, these are the times that some of them come to market for the reasons I just mentioned. People that usually have millions upon millions of dollars suddenly don't and have to sell properties they never thought that they would. These properties will not take a hit.

That is great your family has such great roots in NYC. I unforunately am a transplant but don't ever plan on moving....

Hey, you guys probably all know this but I just figured it out when I posted my search link.

You can modify the link itself to get whatever search you want, not just the Streeteasy choices.

Here is Downtown >$4m in the last 90 days with 15% price cuts:

http://www.streeteasy.com/nyc/sales/downtown-manhattan/price%3A4000000-%7Cprice_changed%3C90%7Cprice_changed_pct%3E%3D15

Here is Manhattan >$5m with 30% price cuts:

http://www.streeteasy.com/nyc/sales/manhattan/price%3A5000000-%7Cprice_changed%3C60%7Cprice_changed_pct%3E%3D30

So you can create a custom search and even save it. Cool.

ski1980,

no offense, but given that essentially no deals are being done above $5 million right now it is not likely at all that you could sell your place for more than you got it for four months ago. think about your story--you 'bailed' this guy out, but he could not find someone else to bail him out for more. why is that?

i love new york and i think the city is going to be fine. but the real estate market is going into the tank--it's been there before, it will be there again.

No offense taken at all, we are just discussing our opinions here. I think many people don't realize many many many big deals are done off market. Deals that never hit the market and not many people know about them. My broker has helped me acquire and sell many of my properties and none of them have been mass marketed. These deals happen every day, you just need to know how to get your hands on them. Only 20 deals $5M and above closed in the fourth quarter. That is BAD, very bad and it will get worse but these are those mass marketed. There is a world of real estate that not many people deal with that is handled on a word of mouth basis.

lol ski1980 all real estate transactions get reported to the government and are public information so i don't know what 'world' you are referring to. all closings get reported and filed, even those marketed through word-of-mouth alone.

you are right, they are all recorded but who is going to research a deal done that has no affiliation to anyone. street easy or no other company for that matter in NYC look at unmarketed properties. If they see a large transaction change in public record there will be no article about it or discussion. Go through the sales closed in the Plaza and see how many of them have no affiliation with either buyer or buyer broker. The only reason why they are looked at and counted is because they were a part of the Plaza. There are many deals that get done and the only thing to show for it is a change in public record. Have you ever noticed that only celebs that want exposure and attention have their public records desplay they bought. I would suggest not to worry about it but I know for a fact (I am one of the buyers and sellers doing this) that deals get done with no one having any clue about it....

I sell SoHo and Tribeca, and they are holding up better than Manhattan in general, but you're still going to face risks. Your average $7 mm property has probably come down about 8% in the past six months, but it's a little tough to know because so few things are trading. I think prices will be fairly stable, but you'll still face pricing risk, as well as a possibiy illiquid market if you suddenly need to sell in two years.

If you are set on buying, where your money comes from is an issue too, because we're finding buyers in the higher ranges are having trouble getting financing. Be aware that the few properties that are trading are trading for cash.

ali r.
{downtown broker}

did u guys not hear about the latest flip in 15 cpw?? guy bought for $13M in June and just sold 3 weeks ago for double. sorry doom and gloomers - market not dead.

“There's a sucker born every minute”

P.T. Barnum

Wow AgentRachel that's really incredible! Do you think the market's still pretty strong?

Agentrachel, do you think prices will go up this year?

When you're ready to buy, call ali; she's a goddess.

EURO, i think it really depends on how long you plan to hold the property, and what you will be using it for. If it is a primary residence or second home and you will be holding it for long term as opposed to short term ownership then it is not a bad time to buy. If however this is something that you will want to resell or move from in a couple years then no it would not be a good time. The price range bwteen 5 and 10 million has actually been the hardest hit so far since September, and you can do some major negotiating on prices. I would agree that more unique properties hold their value more, but I think also that there are particular buildings downtown that show a track record of holding value even in time of economic turmoil. These tend to be buildings that have acquired reputations over time, and not always newer contraction buildings like 40 Mercer. I think apartments that are uniquely renovated, or have unique layouts are always better investments. You want to have something that stands out.

I'd agree with nyc10011. If you "have" to buy, stay with the "tried-and-true." The traditionally quality areas and properties.

That said, you really don't "have" to buy. "Real men" do rent. Now is the time to rent!

Dont' buy for at least "two" years. We're in for an ugly period.

Very little knowledge of the high end market, but I have to agree with happyrenter - ski1980's story makes no sense whatsoever.

ski1980 - your story is preposterous
Agent Rachel - the spinmeister spining yet again! 15 CPW is its own bubbly little bubble, and because there was a frothy transaction that closed recently for $27 million, that means the $5-7mm+ market is safe. Give me a break.

fron_porch and agent rachel,

you seem to be under the mistaken impression that buyers want to hear that things have not gone down. the fact that you claim high end units are only down 7% only makes me feel that they are an even worse deal than i thought. think about it from a buyer's perspective: when something goes down a lot in price, that is a GOOD time to buy. why would euro want to buy the crap that hasn't gone down as far just yet?

just because some unit somewhere just made an amazing flip clearly says nothing about the direction of the overall market. the stagnation is what really tells the story. an apartment is only 'worth' what you can get someone to pay for it. in an illiquid market, it is worth a lot less.

happyrenter, the $7M market is slow, but it is not dead.

In the past quarter, 17 apartments in that price range closed south of the Park.

Six were in the Plaza and one was a three-apartment combo in Riverhouse -- those are all closings from contracts signed in former, happier days. But 10 of the apartments that closed were condo resales.

Those aren't hoodwinked buyers that bet on the market in January; those are buyers who read the lousy fall/winter market and jumped in anyway.

There is certainly the possibility that prices decline more -- that's why I used the words "pricing risk" -- but we can't say that it's a certainty, especially given that high-end resales are still trading.

ali r.
{downtown broker}

well, it's never a 'certainty' that anything will happen in the future. it's the future, it hasn't happened yet. there is "pricing risk" in any market, not just a stagnant one.

what we can say is that there is a very high likelihood that prices will decline given the enormous decline in volume and the increase in inventory. something very unusual would have to happen to keep prices at this level--a sudden turnaround in the economy is the only thing i can think of. maybe if london had to be permanently evacuated and we had to house all the rich, displaced londoners we could sustain these prices. certainly you never know.

Ali, I don't think you can use the word "possibility" as to further price reductions in the high end downtown market. Even an optimist has to concede it is a "probability", i.e. more likely than not.

In reality, it is closer to a certainty, the only question is how much further down it goes. Best case, maybe 10-20%, worst case another 50+%.

That said, buying at the bottom in any market is more luck than skill. I'll be buying in the next year or two, probably before the bottom, but since I am planning to be there for 20+ years (depending on how long I live!) I can ride it out and my heirs can worry about what it is worth.

hey modern, don't you live in a townhouse in the village right now? how much do you want for it?

Here is a fabulous brand new listing in this price range:

http://www.streeteasy.com/nyc/sale/372629-coop-1-fifth-avenue-greenwich-village-new-york

BUT seems a few million too high to me ($3500 per sq ft!!), and some outdoor space would be nice.

One Fifth Avenue has to be the coolest address in NYC. (not saying the best building, just the address itself)

Anybody know this building? Good, bad? I haven't been in it except for Mario Batali's restaurant. Seems to me a high floor south facing unit would have wonderful views. 2 Fifth Avenue has great views too but the outside is ugly white brick.

FABULOUS building--probably my favorite in the city. formerly a hotel, i believe. it isn't as fancy as, say 40 5th, but i find 40 5th a bit stuffy (although also fabulous). more small apartments at 1 5th, less old-money type people. the southern views are great, but the eastern and western exposures are also great.

but that apartment is beyond overpriced. i was thinking of posting it in here as an example of the sort of apartment that is about as unsafe an investment as you can make. 2000 psf and not a penny more, and i wouldn't pay more than 1500.

"did u guys not hear about the latest flip in 15 cpw?? guy bought for $13M in June and just sold 3 weeks ago for double. sorry doom and gloomers - market not dead. "

Yes, ignore the stats, the comps, the economy, the panic...

A broker said so!

You think this putz is Christine Toes?