For people scrambling to make their way in the real estate market, there are many routes, and one of the most adventurous involves buying what brokers often describe as wrecks (fixer-upper is the more diplomatic term). An anemic inventory combined with increasing reluctance to shell out huge sums of money for other people’s taste is sending a growing number of buyers to places they can redo to their own liking, right down to the shape of the kitchen island and the color of the bathroom tile.
These buyers willingly shoulder the often formidable financial and emotional costs of stripping a place to the studs and rebuilding it so as to end up with exactly the sort of home they want and may save money along the way.
Real estate brokers and analysts report a significant uptick in Manhattan in the number of buyers seeking properties in need of major overhaul, alert for such tipoff phrases as “bring your contractor and your imagination.”
According to Jonathan J. Miller, the president of Miller Samuel, the real estate appraisal firm, an analysis of sales of properties rated as “wrecks” or in “fair” or “poor” condition jumped 40 percent between the fourth quarter of 2011 and the same period in 2012. Between those two Decembers, the increase was a hefty 83 percent, indicating soaring desire for such properties at year’s end.
As for the limited inventory driving this trend, “the listing of properties in Manhattan fell 34 percent from the fourth quarter of 2011 to the same period last year, the lowest level we’ve tracked in more than 12 years,” Mr. Miller said. “So we’re seeing more creative and flexible buyers who are faced with a lack of choices as inventory remains tight. As a result, we’ve seen an increase in sales of places in poor condition — a k a wrecks.”
Some real estate firms, among them Corcoran and Brown Harris Stevens, let prospective buyers zero in on needy properties by searching for terms like “wreck,” “estate sale” and “fixer-upper.”
In December the online firm RealDirect.com created a search engine that allows users to check what it called its “unrenovated” option, a collection of listings with phrases like “needs work.” This search engine was installed after company surveys indicated that 10 percent of prospective buyers said they would consider a home in need of renovation.
“There are always buyers who want places they can put their mark on and don’t want to pay for someone else’s renovation,” said Doug Perlson, RealDirect’s chief executive officer. “And in the last few months, with inventory so light, especially for middle-of-the-road buyers, we’re seeing more appetite for these properties. Buyers are seeing an upside to purchasing a home where they can both get a better deal and start from scratch.”
Laura Jacobs and James Wolcott have at last moved from the “before” to the “after” stage of the extensive renovation they undertook of their new home on Riverside Drive. Karsten Moran for The New York Times
Laura Jacobs and James Wolcott have at last moved from the “before” to the “after” stage of the extensive renovation they undertook of their new home on Riverside Drive.
Laura Jacobs likes to say that she and her husband, James Wolcott, took the plunge because of the death of a cat, Jasper, at 15 the oldest of the couple’s three ocicats. Jasper, long beset with health problems, died in October 2011, and within a week, Ms. Jacobs was online looking for properties. “The death released us so we could make a change,” she said. “It freed us, both emotionally and practically.”
To be sure, financial considerations also played a key role for Ms. Jacobs, a novelist and dance critic, and her husband, a cultural critic for Vanity Fair. The couple, married for nearly two decades, lived in a Classic 6 in a Rosario Candela building on West 108th Street, and money was a growing concern.
“We had a huge mortgage that never seemed to budge because we kept refinancing,” Ms. Jacobs said. “Plus the maintenance had risen considerably, and there were assessments on top of that. People think writers earn a lot, but we were strapped.”
In October 2011, Vivian Ducat, an agent with Halstead Properties, showed them an estate-condition Classic 7 at the Grinnell, the century-old “Dakota of the North” on upper Riverside Drive in Washington Heights. What Ms. Jacobs described as hideous yellow and orange wallpaper from the ‘60s peeled away from the walls, and huge cracks laced the ceiling. What lay beneath the layers of bright yellow linoleum she had no clue. Leaky pipes had turned the walls spongy, and the bathroom ceiling was so powdery, she used a broom to knock down plaster cascading into the tub.
“We knew it would cost at least $200,000 to renovate,” Ms. Jacobs said. “But then we thought, ‘Oh, to live in a place like this!’ ” They adored the leaded glass, the foyer and the triangular spaces that echoed the building’s footprint. They were enchanted with the mahogany veneer wainscoting and 10-foot ceilings, from which Ms. Jacobs could hang her collection of chandeliers.
In May the couple bought the 2,000-square-foot space for $750,000, closing on their old apartment for $1.36 million the same day. They slept on mattresses on the floor until renovations began in September. At that point they moved to their unheated bungalow near Cape May, N.J., returning only last week, suitcases in hand.
For Ms. Jacobs, the scariest moments involved the discovery of asbestos tile flooring sandwiched between the layers of linoleum. “Asbestos freaks you out,” she said, “because it taps into your O.C.D., and you have an irrational response. Plus it slows things down and adds to the costs.”
But keeping her calm during the six-month, $270,000 renovation, which included major plumbing and electrical work, were Julie Holzman, the owner of Holzman Interiors, who designed the kitchen and bathrooms, and especially her ever-present contractor, Aleksander Myftarago, the head of Alex’s Renovation, a Brooklyn company.
“Alex sees a problem and he’s a monster,” Ms. Jacobs said. “I remember when he noticed that the big majestic window frames were pulling away from the wall. I’d never seen anything like that, and I thought, ‘What have we gotten ourselves into?’ But Alex was totally cool. ‘No big deal,’ he said.”
Mr. Wolcott, who described his role largely as sounding board — “and trying to sense what Laura wanted so I could support her decisions” — was happy to leave the bulk of supervision to his wife, partly because she has a taste for such tasks. She had been the secretary of the co-op board of their old building, which being prewar had similar issues.
“And I like to work with my hands,” she said. “I’m the one with the tools.” As a child, she used to sit at her father’s basement workbench in the basement and build shadowboxes to house her insect collection.
Would they do it again? “With a team you can trust, absolutely,” Ms. Jacobs said. “Alex was like a good doctor. He could do everything. There was no temper, no worries.” She is so pleased with the experience, she’s contemplating adding a second story to the couple’s bayside bungalow.
In the Throes
Corey Reese, a lawyer for Estée Lauder, lived for nine years in a rented studio in Chelsea, a well-appointed space with a sunken living room. But the rent gradually escalated to $2,400 a month and the closets were so tiny he had to store his off-season clothes in his childhood bedroom at his mother’s apartment on the Upper West Side. By his mid-30s, he had decided it was time to buy.
“When I started looking, I was 100 percent thinking turnkey, because it’s so much easier,” said Mr. Reese, 37, who began his search in December 2011 with the help of his friend Noble Black, a broker at Corcoran. “Between December and May, I’d seen so many places — at least 40 or 50 — that I began running a spreadsheet. Even once I narrowed the neighborhood I wanted down to Chelsea, I still wasn’t seeing the quality I wanted at the price I could afford.”
So Mr. Reese didn’t turn up his nose when Mr. Black showed him a rundown one-bedroom co-op in London Terrace Towers on West 24th Street. The 900-square-foot space had sat largely untouched since the previous tenant, now 101, had arrived 73 years earlier.
Looking beyond the lime-green paint, the cramped galley kitchen and the dropped ceiling in the bathroom, Mr. Reese focused on the three walk-in closets (great for resale purposes), the arched Art Deco nooks in the living room, oak plank floors protected for decades by carpeting and tall corner windows that offered sweeping 10th-floor views, including a sliver of the High Line.
“I saw the potential,” he said. “The bones, the light, the view, the Art Deco aesthetics, the possibility of a real kitchen.”
After considerable soul-searching, he made a bid and eventually bought the apartment for $789,000. The closing was in October. But as a renovation newbie with a demanding job, Mr. Reese is discovering that retrofitting even a modest apartment is no easy task.
Renovation began a few weeks ago, with a target move-in date of April, and the apartment looks like the construction site that it is. Walls are pockmarked with holes, the floor is exposed for the first time in decades, and with the tub and dropped ceiling ripped out, the bathroom is unrecognizable.
Mr. Reese’s team — his designer, Christian Damerow of DamerowDesign; his architect, Stephen Kelley of ZinxStudio; and his contractor, Niki Sinclair of Inigo Design and Build — is reconfiguring the space to create a mirrored foyer, a bathroom with an oversize shower and a more commodious kitchen. (In his last kitchen, Mr. Reese couldn’t open the oven door and dishwasher simultaneously.) A wall was ripped out to restore the bedroom to its original spaciousness, and the arched nooks are being retrofitted to house a bar and an entertainment center.
Mr. Reese has realized that he is unlikely to get exactly the grain he wants in the exquisite charcoal-colored marble he chose for the countertops “because as the woman at the tile store told me, ‘The Italians cutting the stone in the quarries don’t care about your veining.’ ”
He’s still struggling to choose between four different colors of wood stain and two finishes — satin and matte — for the charcoal-gray floors, which are being stripped and sanded. And he agonizes constantly about costs. “We go over the budget with a fine-tooth comb,” Mr. Reese said. “I can’t say, here’s a blank check, because I have none to write.”
“Plus you grow frustrated, even when you have the best people,” he said. “You get a call and you think, what is it now? I go to bed and think of all the checks I have to write. The C-word, cash, has become my new four-letter word.” He hopes the renovation will come in at under $200,000.
“My friends keep telling me, ‘When it’s done, you’re going to love it, and you’ll be so happy,’ ” he said. “I try to focus on that. But I’m really just waiting for the moment when everyone’s gone and everything’s done, and I can sit here, take it all in, and quietly enjoy the view. I want that moment.”
Would he do it again? “Ask me in a few months,” Mr. Reese said.
He’s Only Just Begun
Growing up in Ohio, the son of an art-teacher mother and businessman father, Carl Sorenson was a child who could draw better than most. His continuing interest in art and design led him to his current position, co-founder and chief executive officer of the Nanz Company, maker of custom hardware for doors. Along the way, he renovated a string of houses and factories in the city and on Long Island.
And in December he bought a 2,400-square-foot two-level loft in TriBeCa atop 37 Walker Street, an 1860s factory where straw hats were once made. The loft looks much as it did in the ‘70s, which is why Mr. Sorenson was so charmed by it. The spaces are almost entirely open, and on the top floor, shafts of sunlight stream through dusty eight-foot-high arched windows, edged with rotting sills.
“The moment I saw the place, I knew it would work,” said Mr. Sorenson, 48 and a self-described “project person.” “I had to mask my enthusiasm so I could negotiate the price.”
He bought the loft for $1.6 million, and estimates that renovation will cost several hundred thousand dollars, largely for such big-ticket improvements as new wiring to allow central air. But except for erecting walls to create bedrooms for his two children (who will split their time between the loft and their mother’s apartment on the Upper East Side), he doesn’t plan to do much, even as regards the kitchen, now equipped with what Mr. Sorenson’s broker, Allen Stern of Citi Habitats, described as “burners like the ones you use in the woods.”
As Mr. Sorenson summed up his plans, “I don’t want it to look like a kitchen, just like I moved in some appliances.” And he intends to leave the floors just as they are — oak planks scarred with a century and a half of hard use covered with multiple coats of worn white paint.
He hopes to move in by year’s end. And he has never doubted the wisdom of this undertaking. “Either you’re the kind of person who’ll do something like this, or you’re not,” Mr. Sorenson said. “There are better ways to spend your time, and it’s not the way to make money.”
“I’ve done this over and over,” he added. “I have the plan, the time and a great team, so the project’s bulletproof. I know how to do it. When I’m done, this place will be killer.”