Everything Old Is New Again
Recently one of my top agents made a big condo deal with the neighbor, who swooped in and bought the apartment in order to combine it with his own. A year or two ago I sold a house on the Upper East Side in the same way. The neighbor decided his house was not big enough, looked around but could not find anything he liked all that much, and decided to buy our exclusive, the house next door, and combine. It happens quite a lot.
When it comes to real estate, a lot of people want change but at the same time they want things to stay the same. This can express itself in a number of ways. Combining with a neighboring property is one of them. All over the city there are large apartments which began as small apartments. The couple who had fit nicely into a four and a half when first married are now bursting at the seams with two kids. They love the building: the doormen are their friends, the super’s daughter is their babysitter, and their older daughter’s best friend lives two floors down. They know who to call for great roast chicken delivery and they are on a first name basis with the dry cleaner. So they look around but really nothing has the appeal of continuing to live in the vertical village which they know and in which they are known. The neighbor’s apartment comes up for sale. They jump on it.
Any notion that adding the neighboring apartment is going to be easier than just moving is soon lost. In order to combine, the family will probably be moving into a rental for six to twelve months. A really good architect needs to work hard to come up with a smoothly flowing and intuitive floorplan. But when it works it’s great. They have upgraded, they have expanded, but they haven’t left home.
Alternatively buyers can move within their building. Over the years I have sold to a number of couples who have moved within my co-op on Central Park West from six rooms to eight, or from seven rooms to nine. Easier than doing a combination, although sometimes more expensive after all is said and done, the buyer can remain in his home while renovation is going one and simply travel in the elevator to check up on the contractors. Since the buyer is already a building resident (and has hopefully been tipping generously at Christmas for years) he knows that the staff will have his back with the contractors and subs. That can really make a difference when the electrician wants to work 40 extra minutes after the building’s closing time in order to get the job finished!
As capital gains taxes increase, the number of people who move while remaining in exactly the same space has also escalated. My wife and I have recently done that. Our apartment, a spacious three bedroom when we first bought it as newlyweds, accommodated first one child, then two, then an au pair, then a dog. What was (at least in my mother’s opinion) a ridiculously large space for people our age when we bought it was bursting at the seams a decade later. Then, miraculously, it began to empty out. The run of Swedish au pairs ended as the kids were in school full time. One of our kids went to college, followed a few years later by the other. We were left at home with the dog, who attained a good old age and met his maker. Suddenly it was just us again. And we discovered that the apartment, which had once seemed so big, and then so small, is now just right. My daughter’s room is now my wife’s office. My son’s room is now our guest room. Our dining room now doubles as a TV room. The au pair’s room is a giant pantry closet.
One reason there is so little available inventory is that all over the city owners are re-purposing their spaces to fit changed life circumstances. Fewer people want to pay the larger-than-ever tax bite in order to scale down. Instead they get creative. One bedroom becomes a studio. Another becomes a library. A third becomes … nothing. That door just stays closed. If people like their spaces, increasingly they just stay in them. Not great for us real estate brokers, or the lines of buyers who wish they could acquire them. But for now, at least, I think the trend towards staying put will remain a big factor for our marketplace.