closes off 12% from 2007 but very near ask
You are entitled to a different opinion, but I never tire of noting the quick Manhattan loft sales where the loft was priced around (or below!) the last sale price. The sale of #16B at 270 Broadway on August 31 was just such a sale (one that earned the “!” in fact), as it found a contract within 32 days after starting with an asking price that was 12% below their March 2007 acquisition price. If this is not an adage, it should be: a bitter pill might taste better quickly.
I hit this same theme most recently in my October 29, how to sell a loft quickly? (not a secret!) another 808 Broadway loft does it, but I have hit it many, many times over the course of four-plus years. Sellers 9and the agents who love them) don’t have to trumpet their Motivation! or their being Negotiable!! if they start at the right price for the market. Speaking of adages, you know this one: actions speak louder than words. In Real Estate Speak, that would be: asking prices speak louder than words.
The #16B sellers paid $2.495mm on March 14, 2007 for this “2,551 sq ft” condo loft in Tower 270, outfitted with proper proper names, north-facing windows over Chambers Street and river views from the master suite. That was right around one year before The Peak, but these folks did not mess around when they decided to sell earlier this year. They started at $2.225mm on March 30 and were rewarded with a contract by May 1 at $2.2mm, a nice round number and a bar 1% “discount”.
sometimes, a hard choice
Especially when you see an example of correct pricing working, it seems easy to apply the rule that you price for the current market, not based on your cost. Had these sellers gotten hung up on the fact that they paid (pre-Peak) $2.495mm, they never would have been able to list at $2.225mm.
Again, this seems like an obviously prudent thing to do (if you really want to sell), but I hit on some psychological barriers (with scientific back-up!) in my October 24, real estate market psychology: about seller refusal to take a loss, and in my August 8, negotiation science / The Anchoring Effect.
the earlier owner did better
Among the facts these August sellers were able to ignore is that their seller back in March 2007 had paid the sponsor on February 21, 2002 only $1.395mm. That guy had a 79% gain in five years; life is not fair; they accepted their loss over three years, and moved on.
efficient market on the 16th floor
Just before the #16B seller signed a contract May 1, their neighbors in #16C came to market on April 30. These folks gave it a shot at $1.875mm for their “1,998 sq ft” loft with proper proper names and a window-full layout, but had to drop to $1.795mm in five weeks to strike a deal by July 22 at $1.725mm.
While not as quick or efficient as the #16B sale, the #16C sellers found a buyer within 90 days at a discount of 8% from their original asking price.
The two neighbors were represented by different firms and, while it is possible that the #16C sellers learned of the #16B contract price, it is unlikely that the #16C buyers knew of the #16B contract price. Here’s the fun thing about the #16C and #16B sales:
The Manhattan real estate market (especially for lofts) can rarely be credibly accused of being so efficient!
© Sandy Mattingly 2010