QUICK CHANGE NEW YORKERS ADJUST TO THE NEW MARKET

By MAX GROSS, New York Post October 18, 2007 -- THERE'S something of a Twilight Zone dynamic to New York City real estate. While the rest of the country writhes in mortgage agony, much of New York seems to be bouncing like a carefree 8-year-old on a trampoline.
This is especially surprising, given how dire the future seemed just a month ago. People were holding their breath, tightening their belts and preparing for Armageddon. It never came. (Or, at least, it hasn't come yet.) And it won't
When we recently canvassed several top brokers at major real-estate firms, many reported that the rug hadn't been pulled out at all - and some even said business has improved.
"I'd say traffic has more than doubled than this time last year, which is beyond comprehension," says Prudential Douglas Elliman vice chairman Dolly Lenz.
"The interesting effect on the market is that it truly made the - well, it's hard to say 'low-end' because it really isn't low-end - but less-expensive buyer jump to buy," Lenz says.
"It used to be that buyers could put down 5 percent or 10 percent and, provided they were employed and provided they were breathing, they could get a loan. Now, it's at least 20 percent down and income verification. And so for things that are up to $6 million, people are [buying quickly] because the fear is that now it's 20 percent - next it'll be 30 percent. Next 40 percent."
With buyers like this in the market, sales appear to be brisk.
"I'd say the pall has lifted," says Barbara Fox, president of Fox Residential Group. "All of a sudden, things that we hadn't been able to sell over the summer are selling."
"We had 45 percent more sales than the same time last year," says Hall Willkie, president of Brown Harris Stevens, of his firm's third quarter. "Prices are up in every category, and the market has been very strong."
Of course, most of the third-quarter sales figures were for properties that went to contract before the subprime market melted down, but Willkie notes that Brown Harris Stevens has seen roughly the same number of signed contracts last month as the firm did last September.
And it's difficult to argue with the numbers: Market data that came out last week showed that Manhattan condos had reached a record average price of more than $1.6 million.
Things are heating up in the outer boroughs as well.
"I am busier than ever!" says Brooklyn broker Rodolfo Lucchese, who works out of the Corcoran Group's Fort Greene office. "Bidding wars, all-cash offers."
Late last month, Brown Harris Stevens opened the sales office for Hunters Point Condos, a new development in Long Island City, and sold 40 units (20 percent of its inventory) on the first day.
But no statistics or anecdotes can speak for our entire diverse market. It would be foolish not to acknowledge that some things have changed. And there are, no doubt, would-be buyers who've adjusted their expectations or temporarily taken themselves out of the game.
"I've had several buyers who reduced their price range," says Prudential Douglas Elliman broker Tamir Shemesh, "but I've always had that . . . If someone was looking at about $10 million, now they're looking in the range of $6 million, $7 million. One client looking to upgrade decided to hold off."
But Shemesh adds that inventory is still incredibly tight and that he's seen bidding wars.
NYP Home also spoke to numerous buyers about their confidence in the market and how their plans have been altered. Here are their stories.
Bite the bullet
Some buyers who started the process in the middle of the summer had to grin and bear the subprime market's blowup, even if they weren't subprime borrowers.
James Moore and Sara Nardi signed a contract for an Upper East Side two-bedroom for $995,000 back in June. But as they waited to close, they saw rates shoot up like crazy.
"We were a little panicked," says Nardi. "The banks got really tight and until the 12th hour they were examining everything with a fine-tooth comb. We had to have letters signed from our parents and financial statements."
Moore and Nardi had not locked in their rate when the meltdown hit, so they bit the bullet and locked in . . . at exactly the wrong time. When the Fed lowered rates, the rate they had secured didn't look so good anymore.
"We were actually in a position of locking in a rate and then when the rates went down, having to buy points [to lower their rate]," Nardi says. "We wound up spending an additional $17,000 to buy two points - but we did the math and it evens itself out over four years."
Summer panic aside, Nardi and Moore are confident that they got a good deal on the apartment they found with Halstead Property broker Jill Sloane.
"It's close to the East River, it's got a doorman, the lobby's completely renovated and in the back they're renovating a huge garden," says Nardi. "I only wished they allowed pets."
Time to rent ... a condo
Lucia Panzarella wanted an apartment with outdoor space and more room than her Midtown apartment. She and her husband were going to buy last spring, and began touring apartments on the Upper East Side and Upper West Side before taking a break from home shopping in the summer.
When the summer credit crunch came, they decided to rent instead. They found a 2,200-square-foot duplex penthouse condo in Harlem through their Halstead Property broker, Julia Boland. The owners had originally wanted to sell the home but couldn't find a buyer. Panzarella and her husband signed a one-year lease.
"I definitely think things are starting to appear to be stabilizing," says Panzarella, who has taken herself out of the market for the foreseeable future.
"We're definitely going to be watching the market," she says. "If it works more in our favor and we find something similar to this place, we could buy."
In the meantime, she loves her rental.
Make an offer ... that could be refused
"My offers will be below asking price," says Ben Schaye, a lawyer and recent transplant from Chicago, who is actively looking for a one-bedroom somewhere in Midtown/Hell's Kitchen.
Schaye, who has been looking on his own and with Manhattan Apartments broker Farrah Mogh, figures that things are still somewhat overpriced. "In a month or two months time [my offers] are probably going to be what they're asking for ... The asking prices haven't begun to reflect what the apartments are really worth."
So far, Schaye has been making offers as much as 15 to 20 percent below asking prices and, surprisingly, he has gotten nibbles from sellers. One of his offers was rejected out of fear that the co-op board wouldn't accept it, but the seller seemed satisfied with the proposed figure.
"I kind of welcomed" the credit crunch, says Schaye with a laugh. "I mean, I didn't think I would be much of a credit risk, and it would knock out some of the competitors."
Play the waiting game
"I was looking to buy - and I'm still looking to buy - but I think it's time to be cautious, to do homework," says Scott Berger.Berger, a recent transplant from California, had originally planned on purchasing something in the West Village or SoHo. He and his broker, Christina Vescovo of Halstead Property, spent much of the summer going to open houses during Berger's business trips to New York. But as his moving date approached and the credit crunch intensified, Berger decided there was really no need to hurry. He thinks that maybe a few months, or even a year, out of the game might be a good idea, giving him time to sit back, study and observe the market.
In the meantime, Berger has taken a one-bedroom rental in the East Village.
Think outside the box
Some buyers, like Michael Roggow, have decided to look outside their dream neighborhood.
"I wanted to move to Chelsea," says Roggow, who sold his house in Kew Gardens, Queens, earlier this year and began looking at properties. "Chelsea was a lot more expensive than I remember it. So what was I going to do? Live in a 350-square-foot studio? That was OK when I was 21 and just out of college, but now?"
Roggow and his broker, David Culver of Citi Habitats (above left), have decided to check out cheaper neighborhoods like Washington Heights and are waiting to see if the market will go down in the winter.
Damn the torpedoes, full speed ahead
Buyers and sellers each have separate anxieties about the market, but for somebody like Deborah Colitti, who is both a buyer and a seller, there is a kind of preternatural calm.
Colitti found a two-bedroom penthouse in the Village back in July that she closed on last week. (She won a bidding war to get it.) And she just put her current apartment - a one-bedroom at 720 Greenwich St. - on the market with Tamir Shemesh from Prudential Douglas Elliman.
"It's been on the market 10 days, and I've already got multiple offers," says Colitti.
And Colitti says that her experience has been extremely good, all things considered.
After the subprime crash, "all the banks were frozen for that four- to six-week period," she says. "They were dotting every 'i' and crossing every 't.'"
But in the end, there were no real problems. "It just took a lot of paperwork."
Colitti is now planning a renovation for her penthouse and sifting through the offers on her old apartment.