Gregory J. Heym
Executive Vice President, Chief Economist
By Sharon L. Crenson
U.S. Treasury Secretary Henry Paulson, the former chief executive officer of Goldman Sachs Group Inc., sold his 50th floor condominium near Manhattan's Lincoln Center for almost $8 million, according to public records.
Paulson paid a total of $2.88 million for two apartments he bought and combined on West 67th Street, one in 1996 and the other in 1998. Tax on the re-sale was about $112,000, according to the New York City Register.
The median price for four-bedroom Manhattan apartments like Paulson's was just under $7 million in the third quarter, according to Miller Samuel Inc., the borough's largest appraiser. On the Upper West Side, it was about $7.2 million, and prices in that neighborhood may be poised to rise further, said Gregory J. Heym, chief economist for Terra Holdings, the parent company of New York City real estate brokers Brown Harris Stevens and Halstead Property.
``The West Side market in our latest report looked a little weak,'' Heym said ``The prices over there are going to shoot up.''
Goldman, the world's most-profitable securities firm, last year paid Paulson $38.3 million in salary, stock and options, making him Wall Street's most highly-compensated executive in 2005. After he was confirmed on June 28 as Treasury secretary, the firm said it would give him an $18.7 million cash bonus for the first half of 2006. As Treasury secretary, he earns $183,500 per year. Treasury spokeswoman Brookly McLaughlin didn't immediately return a call seeking comment from Paulson.
The apartment sale was first reported in the New York Post.
Paulson and wife Wendy J. Paulson sold their nine-room condo for $7,995,000 just as that type of apartment building is becoming more popular in New York. About 70 percent of the city's multi- family stock is in co-operatives where residents sit on boards that review the finances and private lives of potential buyers. Condos don't require such approval and are more likely to be newly constructed.
The number of Manhattan apartment sales, both condominium and co-op, rose 9.3 percent to 2,113 in the third quarter, gaining 5.8 percent from a year ago, according to the Miller Samuel report.
Fueled by Wall Street bonus money, New York apartment prices gained 73 percent over the past five years, making Manhattan the most expensive urban market in the U.S.
Investment banks such as Goldman Sachs and Morgan Stanley handed out a record $21.5 billion in bonuses at the end of 2005, according to New York State Comptroller Alan Hevesi.
The Paulsons have another home in Barrington, Illinois, according to New York City documents.
U.S. new-house prices will fall this year for the first time since 1991 and existing homes will have the smallest gain ever, the National Association of Realtors said this month. The U.S. median price for a new home probably will dip 0.2 percent to $240,500, the first decline since a drop of 2.4 percent 15 years ago. The price for previously owned homes likely will rise 1.6 percent to $223,000, the smallest gain on record.
Neil Binder, co-owner of Manhattan's Bellmarc brokerage, said media coverage of the slowing U.S. housing market has sparked sales.
``When the press came out that the world was coming to an end, it stimulated a lot of activity,'' he said.
Friday, October 20, 2006