Burt Stavitsky of Brown Harris StevensWho wouldn’t want to live in Sutton Place? The prewar-laden enclave stretches from the south side of East 52nd Street to the north side of East 59th Street, and from Second Avenue to the river. It’s a part of Manhattan that feels wholly unlike Manhattan. There are tree-lined streets and blocks landscaped with tulips — all next to the East River.
“It’s secluded; you can’t go any further east,” said Brown Harris Stevens’ Gerald Crown, who has worked in Sutton Place for nearly 20 years. “I think that’s what keeps it special.”
Sounds pretty nice, right? Except that sales in the area are down compared with the rest of the borough.
According to data culled by StreetEasy, 18 deals closed in September 2009, the most recent month for which data was available, compared to 28 in the same month last year. That’s a drop of almost 36 percent. Yes, the whole borough has seen sales lag. But Manhattan-wide closings were down 25 percent over the same period, according to StreetEasy.
So what gives?
Evidence suggests that sellers in Sutton Place, a good chunk of them pied-à-terre owners who have decided a second apartment in the city is a luxury they can’t afford, are unwilling to make the price cuts necessary to attract buyers.
Take Corcoran broker Frederick Specht’s pied-à-terre listing in 425 East 58th Street. The apartment was put on the market in June of 2008 for $2.195 million. After seven months the sellers dropped the price, lopping off $200,000. But they have resisted coming down further, and now, a year and a half later, it’s still on the market.
“From our vantage point, [prices] have come down around 30 percent,” said Burt Savitsky, senior vice president at Brown Harris Stevens.
He, with Crown, helped get a contract signed on an apartment in 50 Sutton Place South that started at $2.895 million and was lowered “several times” until it found its footing at $2.15 million — a 25 percent drop.
“We [initially] priced it slightly aggressively with a pre-Lehman number, but the sellers were intelligent and they reacted to the market,” said Savitsky.
Savitsky has another apartment in 50 Sutton Place South that was initially priced at $925,000. It was lowered once, to $875,000, then again to $850,000, but still hasn’t moved. It’s been on the market for about six months, and may need further reductions to sell.
The average sale price in Sutton Place in September was $1.13 million. The average sale price for September 2008 — which was the month Lehman Brothers fell — was not quite $900,000 when two outliers are discarded, including the $32.5 million sale of 7 Sutton Square.
Among the deals that closed in September, two-bedroom co-ops dominated, including one that sold at 2 Sutton Place South for $2 million after being listed for $2.25 million. The bigger sales were on blocks closer to the river, the more exclusive part of the neighborhood that is associated with its elegant character.
“It’s more prestigious to be closer to the water,” said Specht. “It’s removed from the hubbub. First Avenue and Second Avenue are quite busy.”
Despite its cachet, prices in Sutton Place can skew lower than prices on the rest of the Upper East Side because it is dominated by co-ops.
“The Upper East Side is made up of a lot of condos. New condos. So they would be 20 to 30 percent higher,” said Specht, who has lived in the neighborhood for nearly 30 years. “There are more co-ops in the Sutton area per capita, so to speak, than condos.”
“The prices might be a bit less here. The private schools aren’t that close by,” said Arlene Hochstat of Prudential Douglas Elliman, who in September helped close an estate at 400 East 56th Street. “There is great value in the neighborhood, which has always been underpriced.”
It’s this value, coupled with a wealth of larger apartments, that some brokers said is attracting younger families looking to break into the co-op world.
“It’s been predominantly an older crowd because it takes a fair amount of liquid assets to pass the board, so it’s hard for a young couple to come in,” said Specht. “Even with the money, you have to have the connections.”
He’s referring specifically to buildings like One Sutton Place and the Riverhouse, where Henry Kissinger has an apartment.
“It’s not like a big, evolving, changing place,” said Hochstat.
The area’s geography has allowed it to stay isolated. The neighborhood is a good 10-minute hike to the subway at Lexington Avenue (though the crosstown bus runs on 57th Street.)
The seclusion draws people to the neighborhood and keeps them away in equal measure.
“I didn’t have a lot of interest [initially],” said Elayne Reimer, an executive vice president at Halstead Property, about a 1,600-square-foot co-op at 435 East 57th Street that she helped close in September. Originally priced in the high $900,000s, the apartment closed in the mid-$900,000s.
“[Sutton Place is] unique in that some people love it and some people don’t want to be isolated; they prefer to be in the middle of everything in Manhattan,” Reimer said.
But most brokers don’t seem so worried about interest waning.
“Prices are basically double what they were 10 years ago today,” said Crown. “While 2007 was a high point, apartments in good condition still retail.”