Listings of High-End Condos Proliferate
A rendering of Renaissance Plaza,
two 40-story-high towers in White
Plains, where 200 condos will come
on the market in February. The $400
million complex will also have a hotel
and offices.
By ELSA BRENNER
Published: January 8, 2006
SOON after the luxury condominiums at Trump Tower went on the market early last year in this city's rapidly growing downtown, Mary Ellen Gramolini snapped up a two-bedroom, two-and-a-half bath unit for $570,000. "I got in on the ground floor," said Mrs. Gramolini, who then sat back and watched as the prices of units in Trump Tower soared.
Mrs. Gramolini's plan was to rent out her unit for several years and then, once her three children were grown and on their own, move in with her husband, Tom.
But she became worried that the market was becoming saturated and that she might have trouble renting her apartment, and she put her unit up for sale in the fall, asking $699,000.
She was not the only one who decided to speculate on the 212 condos in the newly built 35-story Trump Tower at City Center, where some units offer views of the New York City skyline.
John Durante, a real estate investor and law student at Pace University, purchased a two-bedroom penthouse condo with two and a half baths and a 500-square-foot terrace at the new Trump building for just over $1 million. Last fall, when the units in the residential tower were almost sold out, Mr. Durante put his condo on the market for $1.9 million. When it did not sell, he lowered the price to $1.79 million. It still has not sold.
Both Mrs. Gramolini and Mr. Durante tried to do what many speculators have done during the hot condo market of the past 18 months - buy at a low price and then flip their units six months or a year later. But as Mrs. Gramolini and Mr. Durante and others learned this fall, the upward momentum of the real estate market seems to have abated somewhat.
Mrs. Gramolini's condominium is in contract. She would not reveal the sale price, although she indicated it was below her asking price. "Because I got in at the ground floor, I'm not taking a loss," she said. "It just didn't work out as well as I had hoped."
Mr. Durante put two condos on the market: a penthouse he occupied in another section of downtown White Plains and his Trump condo. The occupied unit sold quickly. He said he would move into his unsold Trump condo.
"Not just in White Plains, but all over Westchester, the condo market has softened," Mr. Durante said. "It's especially true in White Plains," because another high-end residential project is nearing completion, "and people have a lot to chose from," he added.
Of 125 apartments on which buyers have already closed at Trump Tower at City Center, about one-third returned to the market shortly after their closings. Some people describe the surfeit of condos on the market in White Plains as a glut.
But P. Gilbert Mercurio, chief executive of the Westchester County Board of Realtors in White Plains, called that an overstatement, even though there are currently 56 percent more condominiums on the market countywide than there were a year earlier - 600 at last count, compared with 397 last December.
"Yes, inventory has increased because the market is slowing down in Westchester and elsewhere," he explained. "But we're still a very long way from using words like 'overhang' or 'glut' to describe the situation." Looking back, he said, there were 860 condos for sale at the end of 1996, and 1,100 condos in the early 1990's.
In addition, 2004 was a record year in terms of the number of condominiums sold, 1,438, and 2005 came close. As of Dec. 29, there had been 1,400 condo sales, Mr. Mercurio said.
Clearly, though, the real estate market - for stand-alone and multifamily homes and co-ops as well as condos - is slowing down, and the net result is that some speculators, especially condo speculators like Mrs. Gramolini and Mr. Durante, have been disappointed.
Greg Rand, a managing partner for Prudential Rand Realty, reported last week that his company has more than a dozen never-occupied units in Trump Tower in White Plains listed for sale. They range from a three-bedroom three-and-a-half-bath unit listed at $1.795 million, to a one-bedroom two-bath unit going for $789,000.
This high number of units on the market partly reflects the property's exceptional early performance, Mr. Rand explained. Sales were so rapid that the building almost sold out within a few months of the initial offering. In response to the unexpectedly robust demand, the tower's developers, Louis Cappelli and Donald J. Trump, raised prices several times in the ensuing months.
Mr. Rand said the rush to buy Trump condos was as feverish as a sale in a department store. When early buyers saw how much more later buyers were paying, a number of owners "turned around all at the same time and put the condos back on the market."
This has rapidly changed the dynamics at the Trump Tower. "Whenever you have a lot of people selling the same product at the same time, you have a buyer's, not a seller's, market," he said.
Mr. Cappelli estimated that about 25 percent of the condos in the project - an unusually high percentage - were bought by speculators who never intended to live in the units.
Now Mr. Cappelli has 200 more units in Renaissance Plaza, two 40-story-high towers in downtown White Plains, coming on the market in February at prices somewhat higher than those at Trump Tower. Mr. Cappelli conceded that the speculators selling condos at Trump Tower were "undercutting the new product a little."
Renaissance Plaza, a $400 million complex, includes hotel and office elements. In all, it has approximately 890,000 square feet and is diagonally opposite Trump Tower and City Center, a shopping and residential complex.
Real estate observers like Mr. Mercurio at the Board of Realtors described the current real estate market as "in the process of sorting itself out."
Henry Uman, a retired real estate lawyer in Larchmont who has witnessed market ups and downs over 40 years, said that speculators interested in flipping properties should always be prepared to weather the vicissitudes of the market.
"When the need arises," he said, "you have to have the wherewithal to stay with things over time."
Copyright 2006The New York Times Company