www.nytimes.com/2007/07/22/realestate/22cov.html
com&f=2 &id=1 In Search of the Elusive 3-Bedroom Hiroko Masuike for The New York Times Leticia and Rick Presutti, shown with their children, Cosima and Rocco, looked at more than 40 apartments last year before deciding to buy a Classic 7 on Madison Avenue.
Enlarge This Image Asking Price: $2,500,000 This was the floor plan of Leticia and Rick Presutti's Classic 7 before the gut renovation began. It could be a long, hard search, and even vast sums of money wont necessarily make it easier. The elusiveness of these large apartments is hitting people with budgets of, say, $8 million just as hard as buyers with only $2 million to spend. And the fights for the apartments that are available are being won or lost in bidding wars. As more and more young families choose to stay in the city, demand for three- and four-bedroom apartments far exceeds a very limited supply, making large apartments the tightest part of the current real estate market. Even though the Presuttis were looking before the market began heating up in February of this year, the search was anything but easy. Ms Presutti said that after a few months, it got very frustrating, because at the beginning, our broker showed us everything that was out there, but then for weeks and weeks, there was nothing more. The 2,000-square-foot apartment they ended up buying was actually the first apartment they saw, but it needed a gut renovation, which apparently was scaring off other buyers. You would think that with so many apartments in New York, there would be much more out there, Mr Presutti said. But the more we looked, the more we kept coming back to this one. Their broker, Fern Hammond, a senior vice president at Halstead Property, said that the Presuttis six-month search for a Classic 7 a three-bedroom apartment with a maids room and a living room, dining room and kitchen would be impossible in the current market. She explained that last February, when the Presuttis closed their deal, was just about the time that the citys sluggish real estate market began to recover and the market for large apartments turned white-hot. Thats when the market tightened like a vise, and the prices just shot up, she said, adding that the same apartment would now sell for close to $3 million. The market for prewar apartments is particularly limited because many large apartments have been subdivided into smaller units over the years and those that still exist tend to belong to people who have no interest in moving. Bruce Rabbino, a Halstead broker, has been searching for prewar three-bedroom apartments for two different clients for nearly a year. But people dont leave those buildings they get carried out in a crate so the turnover is not very rapid, he said. They end up thinking Im not doing my job, he said, but Im scouring the listings and calling people every day. Developers throughout the city are now building more three- and four-bedroom units to meet the demand.
Its not just the $2 million to $3 million apartments that are hard to come by, said Bill Milvaney, a broker with Bellmarc Realty. Even with $4 million, $5 million or $7 million to spend, were just not finding them out there. Recent studies of the market indicate just how strong it is for larger apartments. Even though larger apartments represent the most robust part of the market, they still make up a relatively small share of it. Three-bedroom apartments accounted for only 5 percent of the sales in the last quarter; Theres constant pressure on the upper end of the market because its always been a very small market segment, said Jonathan Miller, the president of the Miller Samuel appraisal company. The pressure is exaggerated now because you have a surge in income from two consecutive years of big Wall Street bonuses creating even more demand, and the demand drives up the prices. Brokers agree that most of the demand comes from young families who in the past would have opted for the suburbs, where they can get much more living and outdoor space for their money.
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