Brokers pinch themselves as profits soar.

City brokers are pinching themselves as New York's residential market continues to produce some record-breaking numbers.

According to several brokers, Manhattan's multi-family buildings have increased value several hundred times since the 1990's, due to low interest rates and an influx of new capital.

Jim Mann, a partner with Reilly Mann Newell Realty Group, recently experienced a particularly striking example of this phenomenon.

Last month, Mann sold 257 W. 12th St., an apartment building in the West Village, for $4.2 million. Since this is the second time Mann handled the sale of the property (the first was in 1993), he knows that the $4.2 million price tag represents an increase of more than 800% from its $487,000 value in 1993.

At the current moment, Mann is in contract to sell another building in the neighborhood for $5.45 million, one his company sold in 1995 for $768,000.

"The market has just exploded dramatically. I keep getting surprised by what people will pay for these types of buildings, multi-family buildings," Mann says. "And it's not only in the great areas; wherever you turn they are setting records."

Andrew Salomon, who handles the Harlem area for Massey Knakal Realty Services, can attest to that. While his clients used to be desperate to sell their properties at any price, now even such far away outposts as 116th Street and 125th Street corridors are in high demand.

"Two or three years ago, people wouldn't venture above 96th Street," Salomon explains. "Even on that border, they would be a little hesitant to invest. But now that imaginary line keeps moving up. Now buildings in Morningside Heights and Washington Heights are worth over 11 times their gross rent-roll multiple.

"We sold a property two years ago at 2145 Frederick Douglas Boulevard for $900,000. Five and a half months ago it went for double that."

Salomon thinks that zoning changes spearhead by the city government have helped the Harlem Renaissance, but he is convinced the pricing boom is more tied to current market conditions.

"The new zoning on 116th Street and subway accessibility certainly helped, but the demand for Harlem real estate is strong," he says. "I don't this is the top of the market."

According to Salomon's colleague James Nelson, now buyers tend to see value even in buildings that are heavily rent-controlled because they realize that, if they wait long enough, the investment will pay off. "Ultimately, investors are willing to take less of a return in the short-term," he explains. "People want to buy for the future, they want to add value, but you have to have a long-term perspective, you are not making money off the get-go. People are thinking: are the rents under-market? Can I work the building, can I raise the rents?"

The key, in Nelson's view, is that no one expects the rental market to ease up. He thinks people should be more careful about condominium conversions--"If that market softens, I think there will be a lot of developers in trouble. Some of them want to sell their units and move on fast," he says--but rental buildings in Manhattan proper will always be in high demand.

"I have a sale in contract right now, the average rent at the building is $1,100, the high rent is over $2,000, it's in the West Village. Even if the market starts to soften, you will always be able to rent a one-bedroom in the West Village for $1,000," he explains. "We think these are the ideal market conditions. This market will not crash down."