Tom Wolfe made a legend out of the Upper East Side, in New York, with his book "The Bonfire of the Vanities." He portrayed an extremely select neighborhood, with big apartments, even bigger houses and people whose average income was no less than $500,000 a year. In Wolfe’s words, the Upper East Side was the land of the "Masters of the Universe." In fact, the Upper East Side does have the reputation of being the most expensive neighborhood in the United States. This two-square mile neighborhood, that runs from 59th to 96th streets between Central Park and the East River, has the highest concentration of the envied townhouses. Those are the really expensive freestanding two-three story buildings where you can often see people loitering by the main door hoping that Woody Allen or Paul Newman will show up. The cost of these houses ranges from $700,000 to $18 million. That was the price that Woody Allen paid for his Georgian townhouse on 92nd street. However, the Upper East Side is not only for the famous. They are wealthy, but not necessarily famous. According to the census, the area contains 18 percent of all lawyers in the city, 21 percent of all management analysts and 18 percent of all public relations and advertising managers. These people have the highest salaries in the city. The census shows that the area bounded by 63rd street, Fifth Avenue, 67th street and Madison has an average income of $730,000 for its home owning households. For New York City as a whole, it is $65,000. In other words, those who own a house or an apartment in the Upper East Side make ten times more money than those who own a house or an apartment anywhere else in the city. No one in the neighborhood was reported to be living in poverty. Even though only 30 percent of the households in New York are actual owners (in the United States, it is 64 percent), buying a townhouse can be easier than renting an apartment. There is no approval process and there are also more lowdown payment loans that there used to be, and new mortgage products that allow more people to buy their home. Because of that and because of the strong economy of the last years, there are more homeowners in the United States than ever before. That is what a Harvard University study concludes. The same report also warns that high home prices risk to threaten the market. Even after buying the house, the bills pile up. The living costs of a townhouse are endless. Its owner may pay more than $100,000 every year in maintenance cost and utilities. Taxes are the first point. They depend on the size of the house and on the location, says Jed Garfield, from Leslie Garfield & Co. Real Estate (one of the advisors of the Real Estate Board of New York). For a 10,000 square foot house located in 60th street between 5th Avenue and Madison Avenue (the most expensive area), the tax can go up to $75,000. That is the most expensive case. The cheapest one would be around $6,500. The price of water and electricity may also be very high. Water’s expenses represent about $2,000 a year, while the electricity can be around $300 a month. This changes in summer, says Fred Williams, from Sothebys International Real Estate. Most of these houses have air conditioning and its use raises the electricity cost up to $1,000 in the summer months. The problem with these big houses can be the maintenance. Most of them were built before the war, and some of them need constant repairs. Williams estimates that maintenance of the roof and walls can cost around $3,000 a year, while a full renovation would cost between $2,000 and $3,000 for each square foot of property. The other option is to hire a visiting superintendent, who would take care of all the repairs and who would have a salary of $25,000 a year. The last economical step to consider is the insurance. Again, it depends on the location and the size of the house, but Garfield says that it will rarely be cheaper than $3,000 a year. In spite of all these costs, the demand for townhouses has increased in the last seven years. "There was a big change in the market in 1994," says Jed Garfield. "There were more people making money and more available houses." Consequently, more and more townhouses were sold. The market is living now with the consequence of that boom. There are fewer houses available and the ones that are available are extremely expensive. Only one of the townhouses that are listed for sale has a price below $1,000,000. It is a house on Manhattan Avenue, with seven bedrooms, seven rooms and seven bathrooms. Anyone? |
| ||||||||||||||||
