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If you buy a million-dollar home in New York City, you must pay the “mansion tax,” equal to one percent of the purchase price. But good luck getting a mansion for that amount, at least in an established neighborhood. “A million dollars is more of an average apartment,” says William M. Hunt, president of Coldwell Banker Hunt Kennedy. Neil Binder, co-founder of Bellmarc, agrees. “Right now, that market is pretty much the domain of the two-bedroom,” says Binder. “Five years ago, $800,000 would have bought you a classic seven.” And in luxe high-rises such as 425 Fifth Avenue, a cool mil will get you only—ready?—a one-bedroom, albeit one with killer views.
The market started to sizzle in mid-December when Wall Street firms announced the return of the big, fat bonus. “I showed a preconstruction two-bedroom, two-bath loft at 424 Washington to a customer,” says Christopher Mathieson of JC DeNiro & Associates, “and when he heard about his bonus, he put in an offer for full asking.”
Sellers have such an upper hand, they can afford to turn down full-cash offers from clients if there’s any reason they might not pass the all-powerful co-op board. “Salespeople are telling buyers before they even see places to expect to pay over asking,” says Binder. Early this year, Steve Friedman of Corcoran had two bidders willing to plunk down full price—in cash—for his $1.05 million lobby-level classic six in need of renovation on West End Avenue. One, a consultant, backed out when he lost a major client; the other, a couple, had generous parents who wanted to buy them the place outright. “But co-op boards frown on that,” he explains. So Friedman’s client passed, and he put the apartment back on the market. “I knew we’d find another buyer.”
Co-op boards are pickier than ever, having been burned when formerly reliable residents lost their jobs in the economic downturn and couldn’t make the monthly maintenance, let alone their mortgages. “Now they want solid citizens with established money,” says Steven Wagner, a lawyer who represents co-ops. “They don’t want the nouveau riche who show up with a pile of cash, or people who have tons of money but you don’t know where it all came from.” Condos allow you to skip the headaches of the co-op process, but “expect to spend 30 percent more,” says Lisa Wong, a Douglas Elliman VP. Blink and you lose, however: “Condos, if priced correctly, are off the market in a day,” Friedman says.
Where should you go to stretch your million? Try Murray Hill and the Upper East Side toward the river. “In Yorkville or East End Avenue, you can get a 1,400-to-1,600-square-foot two-bedroom with two baths and a formal dining room that you can convert into a third,” says Clare Timoney of the Corcoran Group. “You can certainly go to the upper Upper West Side, above 96th Street,” adds Iva Spitzer, executive vice president at Douglas Elliman, “and there are pockets of Chelsea toward Ninth and Tenth Avenue where you can get more for your money.”
You can still own a townhouse in Harlem or Washington Heights at this price point, but “anything under a million will have problems like back taxes or legal issues,” says Todd Stevens of Douglas Elliman. “The last time I sold anything in good condition for less than a million was last November, but that might as well be five years ago.” One caveat: Don’t expect to flip it in a year or two for a big profit. “You’re pioneering, and your equity won’t increase as well as if you bought in more established areas,” says Spitzer. “That’s just the way it is.”
Join the bridge-and-tunnel crowd, and a million buys a four- or five-bedroom Tudor- or Colonial-style townhouse in upscale Forest Hills Gardens in Queens. And in neighboring Jamaica Estates, “a million would really feel like a million,” says Jacques Ambron of Madeleine Realty. Ditto in Riverdale, where it can move you into a four-bedroom house or “a three- or four-bedroom with at least 3,000 square feet in any of the premier co-op buildings in the area,” says Susan Goldy, who runs her own firm.
In Brooklyn’s beloved Park Slope, “you can still get a nice-looking wood-frame townhouse if you move toward Fourth Avenue,” says Roslyn Huebener of Aguayo & Huebener. “It won’t be jaw-dropping, but it’ll be pretty.” Dumbo is pretty much out of the question if you want real space. Lofts there can reach $1,000 per square foot, says Bill Hendrickson, development director at Harbor View Realty. “You’re not going to get cheap deals there.” Opt for Crown Heights if you’re looking for a renovated single-family home, says Corcoran’s Greg Todd, who lives in the area. Hurry up, though, as prices are on the rise. “The market,” he says ominously, “is starting to go into the million-dollar range.”
Great Neighborhoods
Upper East Side
201 East 62nd Street. Two-bedroom
co-op. $1.05 million. The buyers of this “perfect condition” co-op are downsizing from a grander apartment, but they still wanted a luxe residence. “It’s a Park Avenue co-op, only it’s on 62nd and Third,” says Corcoran’s Marjory Berkowitz.
Soho
505 Greenwich Street. Two-bedroom condo. $1.15 million.
JC DeNiro broker Mark Policarpio’s L.A. client needed a pied-à-terre; “he wanted a good investment, and he wanted to live downtown in a hot area,” says Policarpio. He got both in this full-service building in the area developers call Hudson Square.
Midtown East
300 East 55th Street. Two-bedroom condo. $1.015 million.
Since the buyer parked his million in this still-unfinished building last year, “the same units are going for more,” says his agent, Douglas Elliman’s Patricia Vance.
Great Deals
Whitestone
216 149th Street. Five-bedroom house. $998,000.
Who knows if the Florida-bound owners of this expanded ranch knew what to expect when they bought the property four decades ago? They had an offer “within two weeks,” says Ann Coleman, an agent at Prudential Douglas Elliman.
Spuyten Duyvil–Riverdale
Palisade Avenue. Four-bedroom house. $1.13 million.
Its full dining room and two terraces notwithstanding, this coveted Bronx property had two deals fall through. The family that finally got it is “just glad to have found a decent, well-built house,” says Vivian Oleen of Sopher Realty. “They’re happy, the seller’s happy—we’re all happy.”
Harlem
142 West 123rd Street. Four-unit brownstone. $915,000.
There won’t be a deal this great again in Harlem, says Elliman broker Todd Stevens of the newly rehabbed multifamily house. “It’s going to be Hollywood in five years,” he says.