To understand what’s happening in Chelsea’s real estate market, we interviewed several award-winning Certified TopAgents who specialize in the the area.
Leonard Steinberg, Prudential Douglas Ellliman: Leonard is the leader of one of Prudential Douglas Elliman’s most successful teams and is a Douglas Elliman “Top 10″ broker. His team is expert in Downtown real estate and has extensive experience working with Chelsea real estate and West Chelsea real estate.
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Jon Phillips and Ginnie Gardiner, Halstead Property: A husband and wife team, Jon and Ginnie got their start in the real estate business focusing on Chelsea lofts. Halstead Platinum Circle winners, they have owned a Chelsea home for many years and know the neighborhood extremely well, experiencing Chelsea’s transformation first-hand.
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Michael Murphy, Prudential Douglas Elliman: As an owner of a Chelsea home, Michael knows the neighborhood intimately and focuses much of his business there. A Prudential Douglas Elliman President’s Circle award winner, he is also a former CPA, bringing a quantitative and analytical approach to his real estate practice.
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What are some of Chelsea real estate market’s unique characteristics?
Leonard Steinberg: Chelsea real estate has a significant number of low-line buildings, affording great light, as well as probably the greatest collection of wonderful modern architecture in the city. It’s a new environment, and it offers a very high quality of life, with a good level of balance between park land, culture, amenities, history, and modern architecture. Within Chelsea, there are nuances, as well. South Chelsea is close to Greenwich Village, while North Chelsea is close to Midtown which is quite convenient for people whose office is there. West Chelsea’s benefit is the riverfront and protected views, which means you get sunsets. That is a huge element in many of peoples’ lives. East Chelsea real estate, which is closer to Fifth Avenue, is more centrally located and affords a different level of access to retail spaces.
Mike Murphy: Chelsea is centrally located, so it will always be desirable neighborhood in which to live. While West Chelsea is currently considered a bit more of an “edgy” neighborhood, but Central Chelsea real estate will always remain healthy. Also, Chelsea’s diversity is pretty unique. There are all types of people living in Chelsea – it really is a melting pot.
Ginnie Gardiner: The art galleries in Chelsea are an international destination. The Highline Park is a fun, outdoor area that connects Chelsea real estate to the Meatpacking District and is really revitalizing the riverfront.
How has Chelsea changed in the last several years?
Leonard Steinberg: Chelsea is a new area in the city for high-end real estate. In the last ten years, a significant level of development has converted rather extraordinary existing buildings in Chelsea to residential homes, and what was once a commercial neighborhood has become a predominantly residential neighborhood. This makes for an extraordinary span of real estate.
Ginnie Gardiner: Chelsea used to be thought of as the old brownstones in the West 20s, but with retail anchors such as Whole Foods, Chelsea has extended to 30th Street. There’s still a lot of sexiness to it, with the new Highline Park and the art market. Even though art dealers took a hit, they’re still there. There’s a lot of vitality and activity.
Jon Phillips: The amount of growth Chelsea experienced gave it a boost, more than other neighborhoods. Surprisingly, the saturation of new development in Chelsea real estate has had fairly fortuitous support. We’ve seen quite a bit of new development being absorbed.
Mike Murphy: While the market was booming over the last five to seven years, there was a lot of new construction of Chelsea homes, primarily for new condominiums. The number of Chelsea homes dramatically increased and has shifted the inventory, mixing new developments with older Chelsea co-ops.
What is the current Chelsea real estate market like?
Mike Murphy: Transaction volume has picked up from what we saw earlier this year, but prices are still on the decline because sellers still have not totally caught up with the market. There are a lot of new condominium developments in Chelsea that have not sold yet, which is why the co-ops in the neighborhood have been so beneficial. Chelsea co-ops are between 10-20% cheaper than Chelsea condos, and they’re keeping the market stable. The good news is that things are actually moving now.
Ginnie Gardiner: We’ve seen a softening of about $100 per square foot, but Chelsea real estate is still a highly desirable market. Buyers have been most resistant to North Chelsea (the upper 20’s), because this was traditionally not a residential neighborhood. It has changed to be much more residential, but it is not all the way there yet.
Jon Phillips: There’s still a bit of availability in the new construction in Chelsea. A few of the new high-rises are having problems, and some buildings that were started during the boom are going to have to re-enter the market once it settles out.
Leonard Steinberg: There’s a broad cross-section of pricing in Chelsea, ranging from very affordable to truly unaffordable. I think the market in general has bottomed out, but we’re seeing more price differentiation between mediocre, good, and great Chelsea homes. Today, there is a clear distinction, whereas a few years ago, they were selling at the same price. Also, the volume of quality doorman buildings has risen dramatically, but the level of new construction has dropped off.
What advice do you have for buyers and sellers of Chelsea homes today?
Jon Phillips: For buyers in Chelsea, the idea of flipping a property is gone. That was a big component at the top of the last market, but no longer. With selling, the first question I ask a client is, “Why are you selling?” If there’s a change in family structure at the core of the move, that’s going to be a much different issue than a change in employment, location, or marital status. If there’s not a necessity, I encourage sellers to hold out for the moment.
Ginnie Gardiner: Sometimes we see that a seller might actually be able to save more money by selling and renting for a few years, so in those cases, we suggest selling. It could be like a burden being lifted, a chance to check out a few new neighborhoods other than Chelsea.
Leonard Steinberg: I always encourage potential buyers to walk through Chelsea. The neighborhood encompasses a large chunk of land, so having a good understanding of what each portion can offer towards your personal needs is important. The south is closer to Greenwich Village, which is desirable for some buyers, but the north is closer to midtown, which may be near a client’s office. West Chelsea has the river, views, and sunsets, whereas east Chelsea real estate has a whole different level of retail, light, and has more pre-war loft space.
Mike Murphy: Right now is the time to buy a home in Chelsea. I think prices have hit the bottom, so I would recommend that a client make an offer if they find a property they like. Because there is quite a bit of inventory, the Chelsea coop and Chelsea condo markets are extremely competitive for sellers. You have to price your property almost exactly right in order to get reasonable offers. The average time on the market is between four and six months, so it’s very important to price correctly to start with to get the best price possible as quickly as possible. Every transaction in Chelsea is complicated right now, so the difference between a good deal and a deal falling apart could be a good broker.
What do you foresee happening in the next six to twelve months in the Chelsea market for condos/coops/townhouses, etc.?
Mike Murphy: I think inventory and prices will stay steady. We’ll be treading water for a while. Chelsea real estate will have its seasonal changes in volume, but I don’t think anything big will happen. That said, I think the neighborhood will continue to get better and better. The opening of Highline Park, the improvements on the Hudson River bode very well, especially for West Chelsea. The city is going to open the second half of Highline in the next couple of years, and I think that will be really helpful, as well.
Leonard Steinberg: I think prices will stabilize and perhaps increase in a certain areas. In the next two or three years, I think we’ll see a shortage of best-of-style apartments in Chelsea and I see that realization coming soon. I believe the market will have settled to the point where more people will be committed to purchasing, which will sharply reduce inventory.
Ginnie Gardiner: The next year will be flat. There potentially could be some softening, but it depends on the shadow foreclosures that are going on right now.
Jon Phillips: In Chelsea and all of downtown, there are two types of foreclosures. The first are the loans to developers for development projects, and the second deal with people who bought and then later experienced financial issues. Whenever a market has any foreclosure drag, that’s when there’s a downward impact on pricing, so monitoring the foreclosures will be key.
