pricing strategies / the holiday sale at 525 E 11 St
my theory: if you drop, drop meaningfully
A lot of times the peculiar pricing decisions that get made are the result of serous arm-wrestling between seller and listing agent, particularly after an apartment has been on the market “a while”. I suspect that in many cases of small price drops (addressed in September with puzzling price policy / slow death near Union Square about 4 W 16 St) it is the seller who chooses death-by-small-increments – at least I hope it is not the agent’s advice, because in my opinion that just does not work. Small price changes signal nothing useful to the marketplace and change no reasonable buyer’s appreciation for an apartment. (I addressed some serioius price drops in nothing says ‘motivated seller’ quite like dropped dollars / 36 W 15 St #2 on a roll two weeks ago and at 42 E 12 St in December with “serious” seller hasn’t entertained much / serious pricing pain at 42 E 12 St; I also checked in again at 4 W 16 St in January in more price pain on 16 St /if you knew then what you know now…)
President’s Day sale is a new one on me
Unit 7B at 525 E 11 St has been for sale since April 2006. It is said to be a 2 BR + 2 bath 1,200 sq ft unit with high-end kitchen and baths, a terrace, and services including a doorman and gym.
They started at $1.395mm in April, dropped to $1.35mm in June, and to the current $1.299mm in September. That is aggressive pricing for Avenue B, IMO. And two drops of $50k each in ten months does not seem to me to acknowledge the market feedback that ‘the price is too high’.
The Citi-Habitats website has an interesting note to the open house set for Sunday (12:30 – 2): “presidents day special! bring us $1,199,000…deal”. So the “asking price” of $1.299mm is not only “negotiable” (as you sometimes see and often hear an agent say about a listing price), but they are clear about what they will take.
what happens next?
Since this is not an ‘official’ price change, it won’t show up in the listing history shared between firms. (So someone who discovers this listing next week won’t see $1.199mm as an asking price.) If they don’t sell in the President’s Day Weekend Sale, will they drop the official asking price?
It would be weird if they didn’t. Buyers who miss this little data point and come to the listing later will be disadvantaged at not knowing something important about the seller’s motivation. Which does not seem to be in seller’s interest either (keeping such things secret, I mean).
Maybe the “sale” price will work….
update Feb 20: here we are, 8 days after Abraham Lincoln’s birthday, 1 day after President’s Day (observed), and 2 days before George Washington’s birthday, and the Citi-Habitats web listing (link is above, and here) provides no hint that there was a holiday sale: price is $1.299mm (sssshhhhh)
© Sandy Mattingly 2007
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