Counterintuitive as it might seem, New York City homebuyers looking for a steal would be best-advised to skip areas like Long Island City and Williamsburg. It turns out the real deals on starter apartments aren’t in the outer boroughs, but right in prime Manhattan — on the Upper East Side.
“There are a number of apartments around the Upper East Side for $300,000, give or take,” says Karin Posvar Picket, senior vice president at the Corcoran Group, who has a $269,000 studio listing (pictured above and right) at 225 E. 79th St., between Second and Third avenues.
“The Upper East Side has typically been a location where people can find much more value than other areas, including some of the other boroughs — not only because of the size of the Upper East Side, but because of the diversity [of its housing stock],” says Gordon Golub, executive vice president at Citi Habitats.
“Compared to Long Island City and Williamsburg, there is a wider selection of apartments in different styles of buildings [on the Upper East Side], from walkups to elevator buildings, as well as condos and condop buildings, in addition to co-ops that have been built in the last 30 years,” Golub adds.
Conversely, growth in places like Long Island City and Williamsburg has been almost exclusively in the form of new luxury condo buildings. So while a new LIC condo might be priced competitively, cheap starter co-ops simply don’t exist there.
A recent search on Streeteasy.com for apartments under $300,000 in Long Island City yielded a big fat zero. In Williamsburg, there were 11. But on the Upper East Side, there were 99 listings.
Even the similarly large Upper West Side doesn’t have nearly the supply of inexpensive stock, because it’s much less densely built. The Upper West Side currently has 40 listings under $300,000, says Streeteasy.com.
“The Upper West Side is generally 10 to 20 percent higher than the Upper East Side; that’s because there are less high-rises, so there is less supply,” Golub says.
Despite its reputation as an enclave for the rich and richer, the Upper East Side has always held its share of deals. But the stormy economy has added even more value to the neighborhood.
“They overbuilt in the last boom more on the Upper East Side than anywhere else,” says Robert Kravath, a senior vice president at Barak Realty. “That will reduce prices.”
Of course, because the neighborhood is so vast, pricing varies widely within it. The area around 59th Street is a pricey pocket, and Fifth and Park avenues are home to some of the city’s most expensive real estate. But radiate north and east, and prices tend to decrease.
Generally, the blocks east of Second Avenue and north of 86th Street contain the best deals. (“That neighborhood [east of Second Avenue] is a bit east for some people, so the price per square foot is lower and the value is incredible,” says Bess Freedman, senior vice president at the Corcoran Group.) But there are other low-priced pockets as well.
“There are sub-markets within sub-markets, Golub says. “Anything close to or along a busy two-way street might have a little less value.On 86th Street, we’ve seen prices affected in this way. Right now, anything next to the [future] Second Avenue subway is up for debate. A lot of people think it has more value for future growth, but [for now] it depends on how affected it is by noise and views and access.”
As for pricing, less (sometimes much less) than $1,000 per square foot is not uncommon. Freedman currently has a junior one-bedroom on East 77th Street, between York and First avenues, on the market for $339,000. At 600 square feet, this means it’s less than $600 per square foot, and she admits she’s not sure it will even sell for that.
The owner bought it five years ago for $315,000 “and will be lucky if she breaks even,” Freedman says. “I don’t know anywhere else in Manhattan where you can get such value, excepting Harlem.”
“The market has come off its high 20 to 25 percent in some [parts of the Upper East Side]. In the lower price department, there are some real bargains,” Picket says.
Complicating matters, though, is that almost all of the inexpensive available stock is located in co-op buildings, which are much tougher to get into, what with their bigger down payments, pesky boards and high monthly charges.
“It’s people in their 20s or 30s who are looking on the UES, but these co-ops are requiring 20 or 30 percent down,” Kravath says. “The co-ops are even tougher than the banks.”
Kravath argues that restrictive co-ops only serve to lower prices further: “You have less people that can get in; then you’re going to have less buyers and prices are going to be even lower.So far, all this price lowering and inventory seems to be doing little to light a fire under gun-shy buyers.
“[On the Upper East Side,] I’m seeing a lot of lookers, but I don’t see a lot of people pulling the trigger. They can go look at other stuff and come back and it’s still there,” Freedman says. “I have a lot of listings on the Upper East Side, and they’re not moving as quickly. It is a buyer’s market. We can’t deny that.”