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Average N.Y. apartment: $1 million

As prices soar, buyers compete for less than ritzy properties

NEW YORK The bachelor pad on the Upper West Side may have a terrace overlooking the Museum of Natural History, but it also has a grumpy doorman, just one bedroom and a hefty price of more than $1 million.

And yet, seven potential buyers within an hour raced to view the apartment last Tuesday night.

On the Upper East Side, a feisty bidding war broke out last week around another apartment - also listed for more than $1 million - with one contender offering $10,000 above the asking price, beating out a would-be buyer waving cash for the 1,100-square-foot, or 102-square-meter, condo.

Even more shocking is that this now passes for ordinary in Manhattan's real estate market, where, for the first time, the average price for a condo or co-op apartment has surpassed $1 million. The $786 average price per square foot also broke a record in the second quarter this year, according to Miller Samuel, a residential appraiser, and Douglas Elliman, a large Manhattan real estate broker.

And then there's Boston chasing at New York's heels.

In Boston's Midtown section - home to the Ritz towers - the average condo price in the second quarter was $1,018,630, with an average price per square foot of $707, according to Listing Information Network, or LINK. In the Back Bay, the average condo is selling for $800,009, with an average price per square foot of $652.

In Manhattan, an improving economy, low interest rates, Wall Street bonuses and the lack of inventory drove apartment prices to the new benchmark of $1,047,938 in the second quarter, the Miller Samuel report found, while the average size shrank to 1,332 square feet.

Jonathan Miller, author of the study, said he looked at a number of indicators, including median sales price and the price per square foot, all of which broke records. "So what it is telling us is that this is not a fluke," he said.Boston has one of the most expensive markets in the United States, behind New York City and San Francisco, but it is difficult to compare it or any other place to Manhattan's real estate market, which is literally an island unto itself.

"When you buy in New York City you are buying a way of life," said Jacky Teplitzky, the real estate agent for the Upper East Side property. In New Jersey, in comparison, "then you are going to get more space, but some people are willing to pay to be in the heart of things, to be in the heart of the action."

In Boston, $1 million doesn't go as far as it used to, said Dan Mullin of Daniel A. Mullin Associates, but buyers generally get more than they would in Manhattan.

"For $1 million in New York you're in a high-rise, not in the toniest neighborhood," Mullin said. "But in Boston, you are in a great neighborhood that's very convenient and most people can walk to work."

On Beacon Hill, which has always been among Boston's most expensive neighborhoods, the average apartment now costs $561,737, according to LINK. For $1.5 million in that neighborhood, you can buy a whole single-family home with three beds and two baths.

Still, anyone from outside Manhattan visiting open houses may wonder if the prices are really worth it.

Agents tell stories of shocked transplants who realize that the money they paid for their three-bedroom house in cities like Minneapolis or Dallas will barely afford them a one-bedroom apartment in the West Village. For those not willing to settle for a larger home in Brooklyn, Queens or northern New Jersey, agents say a $1 million apartment in Manhattan will get them no more than 1,300 square feet in a moderate to good neighborhood. While some will have amenities - like the Upper East Side apartment that boasted sweeping views, a community swimming pool, and gym - many do not.

"There are fabulous places in Brooklyn, Jersey City, and Hoboken - but they are not Manhattan," said Pam Liebman, chief executive of Corcoran Group in Manhattan. "To some, once you live here, you have arrived."

All of this has fostered a bit of arrogance among sellers. These days, New Yorkers are so confident that their small apartments will sell, Teplitzky said, that she has a maid on call to clean and organize closets before a showing.

And for their part, buyers desperate to be in New York will accept views of dumpsters, forgo amenities and succumb to addresses in the far corners of the city. One real estate agent last week seemed confident that a one-bedroom listed for more than $1 million would sell, despite its modest size and scrappy doorman. Its location near restaurants and within walking distance of Lincoln Center made it appealing, but the agent, Billy Pfaff, said it was the 900-square-foot terrace that justified the price.

So who's buying?

"Sometimes I am amazed," said Teplitzky. "You can have a 30-year-old bachelor who did very well in the stock market or made $150,000 and saved his money and is able to buy a $1 million apartment."



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