2-Bedrooms Are Back

Sales of studios and one-bedrooms rebounded first after the market crashed in late 2008, followed by three-bedrooms, but it wasn’t until mid-2010 that the two-bedroom market started its comeback. Now, brokers say that the demand for smaller apartments has ebbed and that two-bedroom apartments are all the rage, especially those priced at the lower end of the market.

Alan Nickman, an executive vice president of Bellmarc Realty, says that more buyers have recently come to him looking for apartments between $750,000 and $1.2 million. “That’s basically your starter two-bedrooms,” Mr. Nickman said, adding that the pool of potential buyers included “first-time buyers who are going straight into a two-bedroom,” bypassing smaller units.

Jonathan J. Miller, the president of the appraisal firm Miller Samuel, said that the volume of sales for two-bedrooms was on pace to match last year’s figures, but that the inventory of two-bedrooms for sale was increasing more slowly. While overall inventory has grown by 13.4 percent since March 1, two-bedroom inventory grew the slowest, at 11.4 percent. “If inventory gets tighter,” he said, “that portends a more robust two-bedroom market for the year.”

The median sales price for two-bedrooms topped out at $1.65 million in 2008 and now hovers at $1.21 million, according to Miller Samuel data. Two-bedrooms in New York, of course, vary greatly, ranging from a modest apartment with one bath and less than 800 square feet, for $700,000, to a sprawling 2,000-square-foot space with two or more baths, a dining room or office, and maybe even a terrace, for $5 million.

Focusing on the lower end of the spectrum, a recent search for two-bedrooms between $750,000 and $1 million found more than 650 listings. (There were about 1,100 two-bedrooms between $1 million and $2 million.) Many of the under-$1 million properties were in Upper Manhattan, Brooklyn and Queens, but a significant number were in coveted locations south of 96th Street.

At the lower prices, the apartments tended to have only one bathroom and to be in nondoorman buildings, but many had been recently renovated. Brokers say that when priced competitively these listings sell quickly.

Tracie Hamersley, a senior vice president of Citi Habitats, said she had a two-bedroom listing in Murray Hill that received multiple bids and went into contract close to the asking price after one week on the market. “The buyer had bid on and missed out on two other similar apartments in the same building,” Ms. Hamersley said. “So certain types of two-bedrooms are definitely moving very quickly.”

She is listing a recently renovated two-bedroom two-bath condop at 312 East 23rd Street in a prewar nondoorman building. The owners initially listed it at $1.085 million in March, but buyer traffic picked up significantly after they reduced the price to $999,999 in late April.

“The price drop made a big difference, because a lot of people want to avoid the mansion tax,” Ms. Hamersley said. The New York State mansion tax is a 1 percent levy on homes sold for $1 million or more, which means an extra $10,000 on a $1 million apartment.

Many of the potential buyers are owners of one-bedroom apartments who were reluctant to make the leap to a two-bedroom when the market was weaker, according to Ms. Hamersley.

Like Mr. Nickman, she is encountering renters who are hoping to make their first purchase a two-bedroom. “A lot of these people feel they can stretch for the two-bedroom in the current market,” she said. “They want to get more bang for their buck.”

Arabella Greene Buckworth, a senior vice president of Brown Harris Stevens, has a listing for a two-bedroom one-bath co-op at 50 West 67th Street, on the same desirable block as the Hotel des Artistes. It was originally listed at $1.15 million, but buyer interest spiked when the price was dropped to $995,000. “A lot of people find the mansion tax to be a real psychological barrier,” Ms. Buckworth said. This listing seems particularly attractive to pied-à-terre seekers who are “looking for convenience of location and who are looking for something architecturally distinctive about the space,” she said.

Scott Harris, a vice president of Brown Harris Stevens who has several two-bedroom listings ranging from $499,000 to $1.56 million, said two-bedroom buyers on a budget were motivated by low mortgage rates and also by concern that when the limit for conforming loans drops to $625,500 from $729,750 on Oct. 1, mortgages will become more expensive. “The lower limit affects this buyer more than any other,” Mr. Harris said, noting that buyers of higher-priced properties tended to have higher incomes, which protected them somewhat from fluctuating mortgage rates.

Mr. Harris recently sold a two-bedroom one-bath apartment at 71st Street near Central Park, listed at $925,000, to Joe and Danielle Carney. The couple have a home on Long Island, but were looking for a pied-à-terre for the days when work keeps them in Manhattan late into the night.