WHILE the Titans of Wall Street now tremble at the thought of buying an apartment in this faltering real estate market, an emerging group of buyers is brave enough to look the Cyclops of uncertainty in the eye and begin shopping and even sign purchase contracts.
Many of these buyers have never received a fat bonus check, so they don’t miss it now. They did not suffer huge stock market losses, because they didn’t have huge stock market investments. They aren’t mourning the loss of value in their existing co-ops or condos, because they have never owned one.
They have jobs and good credit ratings, and they are looking to buy.
And now, brokers say, these mostly first-time homeowners are taking advantage of reduced apartment prices and interest rates that have fallen to the lowest levels in a generation. They’re making deals — sometimes far below asking price — on apartments marketed for under $1 million, and especially under $500,000. Still, the hard number of transactions remains depressed; in the fourth quarter of 2008, they were more than 30 percent below levels of a year earlier, according to a market report by the Corcoran Group.
But after months of uncertainty, when showrooms were all but empty and open houses largely ignored, would-be buyers have begun to emerge in the last few weeks, brokers said. They are looking from East Harlem to downtown Brooklyn for what may turn out to be bargain-priced apartments.
Last weekend, in the midst of a blustery snowfall and National Football League playoff games, a steady stream of prospective buyers visited Observatory Place, a new condominium at First Avenue and 104th Street. They stroked the stone kitchen counters, glided across on the bamboo floors and gazed out of the large glass windows at views that include glimpses of the Robert F. Kennedy Bridge, formerly the Triborough, at least from the upper floors.
Paul Hennessee, a music teacher at the Spence School, toured several one-bedroom apartments, a sleeping baby in the carrier on his chest. Mr. Hennessee and his wife, Rebecca Weis, an adolescent psychiatrist at Bellevue Hospital, were priced out of their Manhattan rental a few years ago, and have been renting half of a two-family house in Astoria, Queens, a long commute for them both.
They expected to have to wait a few more years until they could afford to buy, but with mortgage rates now so low (as low as 4.75 percent last week for a 15-year fixed mortgage on a condominium, with no points) the family of four decided to look for a modest one-bedroom.
The couple were willing to sleep in the living room if they had to. “We will do the Murphy bed,” Dr. Weis said. “We are looking while the mortgage rates are good.”
Jessica Armstead, a broker at the Corcoran Group, showed the couple a two-bedroom apartment whose floor was lined with blue painter’s tape, evidence of the developer’s plan to divide it into two apartments, a $466,000 one-bedroom and a $340,000 studio, since small one-bedrooms had already sold out.
As they toured that Saturday afternoon, Ms. Armstead’s cellphone kept ringing as the doorman announced other buyers arriving to look at the apartments. The Hennessees drifted away, but said they had plans to keep looking for apartments the next day.
“Our traffic has turned around,” Ms. Armstead said, adding that agents had seen higher turnouts in the last two weeks than in pervious months.
At three tenement buildings on West 107th Street last weekend, buyers shuffled past one another as they climbed the narrow staircases, often up to the fifth floor, to look at newly renovated two-bedroom apartments in otherwise unrenovated buildin
The buyers, some of whom said they had been priced out of the market in the boom years, were drawn back by low prices and the promise of deals.
“It is price, price, price,” said Jason Haber, a broker at Prudential Douglas Elliman. “We get five to 15 inquiries a day.”
At the buildings, Nos. 63 through 67 West 107th Street, between Manhattan and Columbus Avenues, prices for two-bedrooms range from $395,000 to $440,000, extraordinarily low for two-bedroom apartments in Manhattan. But the units were often narrow and small, typically 615 square feet.
The apartments are among a number that Mr. Haber and his group are marketing on the West Side and Harlem in noneviction conversions of rental buildings owned by the Pinnacle Group, which has been embroiled in disputes with tenant groups over evictions in its buildings in the last few years.
“There will be some room for negotiations,” Henry Orenstein, a broker in Mr. Haber’s group, told several buyers.
While brokers used to cater to financiers and hedge fund managers, they are now singing the praises of the common worker of far more modest income.
“The meat-and-potatoes buyers are coming out right now,” said Kristina Leonetti, a broker at the Corcoran Group.