Tristan Harper, a senior vice president at Prudential Douglas Elliman, is marketing a four-bedroom co-op at 320 East 72nd Street.
Two years ago, he said, selling the apartment would have been as easy as scheduling an open house, where a swarm of buyers — many of them wealthy Wall Streeters — would flock.
“You opened the door twice and it sold,” said Harper, who is marketing the apartment with fellow Elliman broker Eric Friedberg. “Now you have to do a little more creative marketing in order to promote it to the right people.”
He noticed that the 72nd Street co-op — now priced at just under $3 million after several rounds of price cuts — is within easy walking distance of Lenox Hill Hospital, NewYork-Presbyterian Hospital and Memorial Sloan-Kettering. So he purchased a list of doctors’ addresses from the American Medical Association, and sent out a mailing advertising the listing.
It paid off in the form of multiple inquiries from doctors about the apartment.
“We did receive quite a few calls,” said Harper, who is also helping one of the doctors sell his current apartment.
With the real estate market on the upswing after the deep freeze of the recession, buyers are coming back. But agents are discovering that these buyers, many of whom are lured by reduced prices and low interest rates, are often very different from boom-time purchasers.
Gone are the cash-rich Europeans scooping up New York pieds-à-terre sight unseen; gone are the investors buying new condos for a quick flip. While demographic statistics on this new crop of homebuyers are not yet available, brokers say many are younger, less wealthy, more likely to have young children, and less likely to work in finance than their counterparts of the mid-2000s. Even the unlikeliest purchasers of all — rent-stabilized tenants — are now purchasing apartments in greater numbers.
That means brokers, who during the boom had to do almost nothing to sell their units, must now find ways to target this new audience.
“It’s all about getting the people [who] are in the market to know about a particular property,” Harper said.
The current combination of low prices and low interest rates is unusual, said veteran agent Elaine Clayman, a senior vice president and managing director at Brown Harris Stevens. She noted that the last time prices dipped this much (during the downturn of the late ’80s and early ’90s), interest rates were in the double digits.
“I don’t remember this combination [happening] for an extremely long time,” she said.
Noel Berk, a principal at boutique brokerage Mercedes/Berk, said with prices no longer appreciating at breathtaking speeds, “there aren’t flippers anymore.”
Many of the flippers were European, and with many European economies in shreds and the dollar strengthening against the euro and the pound, “a lot of those people are out of the market now,” Berk said.
But they’re being replaced by newcomers, including many who couldn’t afford New York real estate in the past.
For instance, many of today’s buyers are younger than the buyers during the boom were.
“People in their late 20s and early 30s, who might have waited a few more years to buy, are not waiting,” Clayman said.
In 2008, 32.6 percent of homeowner households in New York City had children under the age of 18, according to New York University’s Furman Center for Real Estate & Urban Policy. But anecdotally brokers say families with children are now making up a higher percentage of the buyer pool. Nothing adds urgency to a home search like a new baby, and discounted real estate has added momentum to the growing trend of families staying in the city rather than relocating to the suburbs.
“The lifestyle in the city became more appealing to families over the past decade,” said Harper, who is looking to buy a three-bedroom apartment with his wife and son. Now that real estate is more affordable, he said, “They say, ‘Okay, the kids can still go into nice schools and we will get a nice apartment, and we will stay in the city.'”
Some families who have already decamped to the suburbs are now returning to the city. Stewart Grodzitsky, Clayman’s transaction manager, said the group has recently worked with families moving back into Manhattan from Connecticut and New Jersey, in one case because a parent, a surgeon, worked long hours and wanted to spend less time commuting.
Brokers said that while Wall Streeters once dominated the sales market, fueled by the lavish bonuses of the mid-2000s, they are now seeing buyers from a wider variety of professions, thanks to lower prices and financial industry job losses.
“In the past, we had 80 percent Wall Street people,” Harper said, estimating that that has now dropped by 20 percent. “If before we had 10 percent of doctors and lawyers that could have afforded a nice big apartment, now it’s more like 30 percent.”
While banks these days want buyers with steady incomes and sizeable down payments at the ready, many of today’s buyers are less wealthy than in the past. Brokers say they’re seeing longtime renters — previously priced out of the market — now seize the opportunity to buy, sometimes borrowing down payments from family members.
This even includes rent-stabilized renters. Scott Klein, an associate broker at Elliman, said he closed a deal last month in which a 40-something bachelor friend bought an apartment in Kensington, Brooklyn, after some 20 years in a rent-stabilized apartment on the edge of Park Slope.
Berk said she, too, has seen several examples of this phenomenon. “People who live in rent-stabilized apartments and thought they’d stay in them their whole lives are realizing, because the interest rates are so low and prices are better, that they can finally buy their own home,” she said.
Changes among buyers mean brokers have to come up with novel ways of targeting them. Harper said he has been directing his mailings to different segments of the marketplace “versus just addressing them to Wall Streeters, which was our main focus three years ago.”
The brokerage Modern Spaces is based in Long Island City, which is fast becoming a popular neighborhood for families (see “Long Island City’s stroller invasion”). To help tap into this growing market, CEO Eric Benaim said the firm is sponsoring a peewee soccer team. “We’re trying to appeal to families,” he said.
Appealing to families is easier said than done, since fair housing laws prohibit discrimination based on family status.
“We never say, ‘This is a great family apartment,'” said Paul Zweben, an Elliman broker. “We will say, ‘a fabulous four-bedroom.'”
Another way to target today’s information-hungry, comparison-shopping buyers is to become a resource for them. Zweben said he’s constantly e-mailing news articles to his contacts.
“If I see an article that is going to impact the masses, I’m going to Tweet about it, put it on Facebook, and put it on our blog,” he said. “It’s constant sharing of information — that’s what’s changed over the past few years.”