In the last couple of months, Manhattan real estate brokers have reported some glimmers of hope. While the market as a whole is still dismal, less expensive properties appear to be moving again. We wanted to find out what’s happening on the Lower East Side, so we checked in with Halstead Senior Vice President Neal Young, who specializes in the Grand Street Co-ops.
Over coffee at Cafe Patisco on East Broadway, Young confirmed what the second quarter market reports suggested: since the early spring he’s seen an uptick in sales, as sellers adjusted their expectations. Stretching from Essex Street to the East River, there are around 4500 apartments in four separate complexes: Seward Park, Hillman, Amalgamated and East River Housing. In the six years Young has been selling apartments on Grand Street, he’s seen prices skyrocket, peaking at the end of 2007. By September of last year, when the economy cratered, almost nothing was moving.
But Young says, in the last three months, “activity has picked up decidedly. One thing that helps the Lower East Side is that the entry level point is lower than a lot of other neighborhoods. And so people who were priced out of the market are now realizing they can now afford to buy in Manhattan. So we’re getting a lot of first time home buyers.” Young estimates the price declines on Grand Street have been anywhere
from 15 to 20-percent. Even though the market has stabilized (he has more than 20 apartments in contract), and a slight uptick in prices is possible in the next 12 months — he’s not
anticipating prices will begin escalating again for three to five years.
On Halstead’s web site, Young and his partner Jeremy Bolger, are listing one-bedroom apartments starting at $395-thousand. There’s a signed contract on a one-bedroom for $365,000. “Where else are you going to get a large apartment, potentially with some views, some outdoor space for 500-600 per square foot,” he said. Young told me a lot of buyers are looking to trade up. In one case, a family sold a renovated one-bedroom and moved in to an a two-bedroom apartment (that had not been renovated) for less money.
In the Seward Park Co-op, the issue of sublet fees has been a contentious issue in the last several months. The Board, facing a budget shortfall, voted to increase the fee owners must pay if they choose to sub-lease their apartments to 150-percent of the maintenance. But they have now reversed that decision, reinstating the old sublet fee (100-percent of maintenance). Young’s glad the increase was rescinded, “calling it a wise, prudent, financial decision.” He believes moderate sublet fees make sense for co-ops, which are designed to encourage owner-occupancy. But, he says, “you have to acknowledge, in today’s mobile society, people are moving more, they might have to relocate, they might have to go away for a year and work in Asia or Latin America.”
Long-term, Young says he’s optimistic about the Lower East Side market. He thinks the new East River Park Esplanade will be a big draw. He continues to see an influx of young people, drawn by the neighborhood’s nightlife and artistic offerings. And he is encouarged by the fact that restaurants and shops continue to pop up, even in a tough economy.