New York's Cooperative and Condominium Community

Habitat Magazine Insider Guide




What Do Selling an Apartment and Hitchhiking Have in Common?

New York City

High End Meltdown
Dec. 14, 2018

Today we indulge in a little bit of the old schadenfreude – joy over the misfortune of others. The others, in this case, being those poor rich people who are now trying to unload high-end co-op and condo apartments in gilded New York City. Those unlucky souls are becoming acquainted with two of the dirtiest words in this real-estate-obsessed city: deep discount

Consider the case of the actor Brian Kerwin, who purchased an 1880s Romanesque townhouse for less than $1 million in the early 1990s, then restored the property. When he decided to sell recently, the Wall Street Journal reports, he was hoping to get about $12 million, based on similar sales in the neighborhood. A broker told him he should price it at $8.5 million. He did, but no one was interested. After a year and several price cuts, the building is now in contract for $5.5 million

“It’s like hitchhiking,” Kerwin says. “After standing there for 10 hours, you’ll take anything.” 

Kerwin, like other high-end sellers in New York, faced the convergence of several potent economic forces: an oversupply of new condos, a drop in international buyers as some countries impose capital controls, changes to the tax law that cap state and local deductions, and rising interest rates.

“It’s a crazy Bermuda Triangle of forces that have lined up against people trying to sell and buy these properties,” says Lee J. Stahl of the design/build firm the Renovated Home. The Upper East Side luxury co-op market in particular, she adds, is “a train wreck.” 

Case in point: River House, an old-line East Side co-op that once rejected application packages from Gloria Vanderbilt and Richard Nixon. How times have changed. The co-op board recently accepted the purchase by Uma Thurman – an actress! – of a 12-room apartment that had been discounted by $8.5 million, the New York Post reports

But don’t let your schadendfreude run away with you. “What’s most significant about 2018 is that even the sub-$1 million market is slowing because of rising mortgage rates,” says appraiser Jonathan Miller. Rates for a 30-year mortgage averaged 4.81 percent in late November, up nearly a full percentage point from the beginning of the year. And that affects everyone – rich, poor, and in-between.

Ask the Experts

learn more

Learn all the basics of NYC co-op and condo management, with straight talk from heavy hitters in the field of co-op or condo apartments

Professionals in some of the key fields of co-op and condo board governance and building management answer common questions in their areas of expertise

Source Guide

see the guide

Looking for a vendor?