Degentrification hits Manhattan.

Degentrification hits Manhattan

The buzzword in less expensive neighborhoods in the 1980's was gentrification. The 1990's, however, with recession and a slump in the real estate market, has begun to see a reversal of this process -- degentrification.

"There's an interesting phenomenon going on in many areas of the city," said Clark Halstead, managing partner of the real estate brokerage firm that bears his name. "Neighborhoods that began the process of gentrification, but that didn't get far enough along have begun to revert to their former state. Whereas areas that were well along the path have simply become terrific buys as prices have fallen dramatically. Many of these areas attracted enough home owners that they remain stable, convenient and desirable, though the market has knocked prices hard."

Halstead cites two neighborhoods as typical of the new degentrification. Manhattan Valley, the strip of apartment buildings along Manhattan Avenue (between Central Park West and Columbus Avenue) which runs from 100th Street to 1 10th Street, was one of the last areas of the upper west side to begin gentrification. It had all the earmarks of a neighborhood about to be transformed. A strong block association sprang up among a growing number of townhouse and co-op owners and the street began the typical metamorphosis. But it didn't reach critical mass. Today, it is virtually impossible to sell a property there.

By contrast, however, only a few blocks west, between 96th Street and 106th Street, west of Broadway, co-ops regularly sell within weeks of going on the market. These apartments have certainly seen dramatic drops in prices since the beginning of the recession, but they still sell quickly because the neighborhood is very stable. It reached the critical mass of gentrification.

"Some of the best prices in the city are available in neighborhoods that were rescued from decline in the 1980's by cooperative conversion," said Halstead. "Where there was enough successful conversion and gentrification, there are highly desirable apartments at once in a lifetime prices."

Halstead noted the prices for a "Classic 6", a six-room apartment that is one of the most desirable configurations in New York are approximately as follows on average:

*West of Broadway 70's or 80's West -- $550,000

*West of Broadway 90's or 100's -- $385,000

*West of Broadway above 106 -- $290,000

"We actually see bidding wars regularly on these apartments now, though the prices are 30 percent lower than they were at the peak of the market," Halstead summed up. "There is real value in the neighborhoods that caught on early in the gentrification process."