If you’re considering hiring a real estate professional to market and sell your home in today’s challenging environment, may I strongly suggest hiring a team as opposed to an individual. An increase in inventory paired with a decrease in the pool of buyers has resulted in a slower spring market than most have grown accustomed to.
All of that said, it has never been more important to have multiple agents available to physically show properties precisely when prospective purchasers want to see them. Here is just one example of how a multi-member team benefits a seller:
Buyer calls for an appointment for 10:30AM on Friday:
Individual agent: "I have another appointment at that time so can you do 3PM?"
Buyer’s agent: "Sorry I only have the client in the morning."
Result: With more inventory to peruse in today’s market place there is a very good chance that this buyer will find something else without ever seeing your home.
Solution (TEAM APPROACH): "Of course we can show at 10:30AM on Friday. You will be meeting so and so from our team and their cell phone number is blah. They will see you then."
It really is THAT simple! More bodies, more availability to show and SELL your home. In a market where buyers have more choices, you absolutely want to make sure that your property is among the pool of those from which they are choosing. If they can’t see it, you can’t sell it.
The spring residential real estate market is in full swing albeit quieter than the same time last year. In addition to less volume, there is one major impediment to deals getting done in today’s marketplace. That obstacle is price. Although most sellers have accepted that the market has declined between 20 and 40% from peak levels (depending on the neighborhood), buyers are seeking greater discounts in an effort to hedge the possibility of further price depreciation. The result of this gap in psychology is preventing price discovery in the market.
Anecdotaly I have seen at least 3 transactions in the recent weeks where buyers and sellers were separated by as little as 2-4% of the asking price with neither side willing to budge. And so far, both sides are holding their ground even unwilling to split the difference. In an effort to make a deal, buyers are asking sellers for items like stereo systems, flat screen TVs and furniture to be included in the sale. Some sellers are agreeing to such concessions while others stand firm patiently waiting for a better deal to come along.
So while some deals are being made and others remain in a stalemate, we seem to be at least nearing price discovery. Until that time, let the marathon negotiations continue. Never a dull moment in Manhattan residential real estate.
A lot going on behind the scenes here at TrueGotham and stay tuned for some very exciting news. In the meantime, in an effort to stay connected to my readers, here’s a quick snapshot of my current business:
- Buyer traffic has increased-36 people at open house in West Village.
- Number of bids has increased-2 unacceptable bids on property listed for 4 months, 3 bids over ask on West Village condo, 1 bid each being negotiated on 2 other properties listed for 3 months and 1 month. Others expected on listings of 6 and 7 months old.
- Negotiations are still analogous to running a marathon with deals taking longer to finalize as both sides change terms as the process plays out.
- Price discovery may be nearing as the psychological gap between buyers and sellers narrows. 2 recent buyers lost "their special home" to higher bids while in lengthy negotiations.
- I know this is contradictory but asking prices remain all over the map with some factoring in a 20-30% negotiating cushion and others pricing more appropriately for today’s market.
That’s what I’m seeing. No spin…just facts. Volume and prices remain down YoY and it’s anyone’s guess as to when the market will begin to stabilize. Inventory seems to have stopped it’s climb for now which may indicate the imminent stabilization of prices.
You can assume that when I haven’t blogged for a week or more that I’m either on vacation (not this time), bummed out about the current market (not that either), or so darn busy that I just don’t have time to blog. The latter is absolutely the case as I’m currently negotiating bids for 2 buyers and accepting bids and working on contract signings for 5 other properties on behalf of my sellers.
I’m still contemplating taking the leap to video blogging which I believe would be more efficient so stay tuned as I gain the courage to show my face once again on TrueGotham.
Regular readers of TrueGotham know all too well my irritation at the mis-quoting of square footage. I even did a 5 Part Web TV series to address just that topic. It has unfortunately been determined that measuring square footage is not an exact science and coming up with an accurate measure of a property seems to be nearly impossible. So imagine my incredible dismay this week when a seller and I exchanged the following emails:
ME:
Just received square footage back from floor plan drafter and he measured at 1095sf. From where did 1350sf number come? Big difference and I can’t market at 1350 when measured at 1095. Just want you to know that I will be listing at approximately 1100sf
SELLER:
The 1300 sf number was taken simply from past listings for the "e" line in the building. They are all supposed to be identical. Its possible that people were including the sf of the balcony…The "m" lines is supposed to be marginally smaller than the "e" line, and don’t have a balcony. There are 3 currently on the market, listed at between 1250-1300 sf. We either overlooked something, or everyone else in the building is lying.
ME:
Probably the latter but I will investigate further. I am willing to not list sf and inform those who ask that other E lines are listed between 1250 and 1300sf but I can’t market as 1300sf. Make sense?
SELLER:
Unfortunately, that doesn’t really address my concern. The way we see things, the unit’s biggest selling point is the space you get for the price (but it’s NOT as much "space" as he wants to claim!). Listing a number that is below its actual equivalents undercuts us, and not listing the sf seems to defeat the whole purpose. I realize that brokers will understand what is going on, and inform people appropriately, but everyone I know does their own research as well. I know I did, and space was the first thing I looked at. (He should have done more thorough homework and he would have known he purchased 1095sf and not 1350 as it was marketed)
Can you at least call your colleagues who are listing similar units and ask why they feel comfortable listing at 1250-1300 sf? To be perfectly honest, this may very well be a deal breaker for us. (Most of my colleagues don’t intentionally lie about sf . Some simply state the last number at which the property was marketed whether accurate or not)
ME:
I think that you should proceed with someone else as this just doesn’t feel right to me. I’m sorry but I will not mis-quote square footage regardless of whether my colleagues will.
SELLER:
Douglas,
We were not asking you to misquote anything. (Really?!?! Seems he wants me to market his home as being 200sf larger than it is.) We simply don’t understand why your guy’s numbers are so radically different than everyone else’s (because we actually measured!) I am not saying they are right and you are wrong, I am simply trying to wrap my head around how the two methods could come up with such different calculations. Its not like we are talking about fly-by-night brokerages here, its Sotheby’s, Corcoran, Bellmarc. Its even people at your own agency. (My point EXACTLY!!!) That said it seems that this is not something you are really interested in doing, and that you haven’t been since your initial response on the 9th. That being the case, I agree its best we all go our separate ways.
Thank you for your time.
So that’s that. I’m not going to be representing these sellers with the sale of their 1100sf apartment because I won’t lie and market it as 1300sf. BTW…that is a 200sf difference!!! That is a 10 x 20 foot room!!! How can I look someone in the face and tell them that another 10 x 20 foot room exists but they just can’t see it. It’s a magical room that the human eye can’t see but we have to charge for.
This is ludicrous and worse yet they will absolutely find someone to market this apartment as being 1300sf. BUYER BEWARE!
Had a blast on FoxBusinessLive today with anchors Connel McShane and Jenna Lee and IRA/401K guru Hugh Bromma, the CEO of the Entrust Group Our discussion covered current conditions in housing markets nationwide, the confusion that everyone is experiencing from mixed messages in the media, market direction, and selling/buying options.
If you care to see the first half of the interview, here is the entire hour show. My segment starts at 23:45 into the show.
Although there are still a very small percentage of owners who attempt to sell their own properties, those who are have become more savvy and sophiisticated in their efforts. The owners of a 2BR/2BTH apartment in Lincoln Towers on the Upper West Side have designed their own website, BestHomeInTheWorld.com, that includes more information about their home than anyone could possibly imagine. Complete with co-op board requirements and a link to the managing agent’s website where one can find the purchase application, these sellers have left no stone unturned. The owners are also offering a brand new Toyota Prius or a $25,000 cash back incentive to the buyers of ther home as well as a $5000 finders fee for anyone who sends them a buyer. They have even embraced the power of video. Check this out:
I’m going to resist any critique of the video or the website and simply commend them on an excellent marketing effort and wish them the very best of luck!
The following data represents Prudential Douglas Elliman CONTRACTS SIGNED for all of New york City for the weeks ending 3-6-2009 through 4-3-2009:
Average Sales Price: 1,029,091
Median Sales Price: $666,250
%Discount from Last Asking Price: 9.70%
%Discount From Original Asking Price: 19%
Range of Sales: $160,000-$10,100,000
- <$500,000 31%
- $500K – $1MM 34% (65% Sold Below $1MM)
- $1MM – 2MM 22%
- $2MM – $3MM 8%
- $3MM – $5MM 4%
- >$5MM 1%
Transactions Sold ABOVE Asking Price: 2%
Transactions Sold AT Asking Price: 7% (9% Sold @ Ask or Above Ask)
Tans actions Sold BELOW Asking Price: 91%
Ownership:
- Cooperatives 59%
- Condominiums 40%
- Townhouses 1%
Regional Breakdown:
- East Side 28%
- West Side 23%
- Downtown 24%
- Midtown 10%
- Brooklyn 14%
- Harlem 1%
- Queens 0%
- Bronx 0%
Total Days on Market to Contract Signed:
Total Days on Market to C/S Since Last Ask Price:
Active Listings in Manhattan Market Qty: up .005%
So here are the trends:
- Median sales price has decreased to $666,000 from $785,000
- Average sales price decreased to $1,029,000 from $1,086,000
- Discount from Last Asking Price stable at 9.7% from 9.5
- Discount from Original Asking Price slight increase to 19% from 17%
- Transactions sold at ask or above stable at 9%
- Majority of transactions, 65%, are under $1Million
- Median number of days on market to C/S since last ask stable at 55 days from 53 days
Transaction Trend: The number of transactions on a monthly basis has been increasing since November. March’s transactions are up 24% over February’s transactions.
These numbers are exclusively those of Prudential Douglas Elliman but definitely serve to shed some light on what is going on in the current Manhattan real estate market.
Although this is under the "Fun" category of this blog, it is hardly any fun for most parents who are trying to get their kids into private schools in Manhattan. Given all the buzz of late about schools and real estate value (via NYT’s) and the fact that my wife and I (along with our 5 year old daughter of course) have just completed our second go-round of this process, I thought it was appropriate to share this insightful video courtesy of NYC Private Schools Blog. For all of you who have wondered what the big deal is about getting into kindergarten in Manhattan, check this out:
Charming isn’t it 🙂
BTW…3 blog posts today because I’m gone yet again all of next week for a retreat on which I will have limited to no access to computer, cell, or email. Be back on the 20th and Happy Holidays to all!
With all the negative press that the Manhattan real estate market is getting these days and a veritable stalemate occurring between buyers and sellers, Manhattan property owners are shifting their perspectives on how to best sell their homes in a challenging market. Most are no longer interested in pricing their homes at unattainable levels and are much more receptive to aggressive pricing that gives buyers a perception of value.
The shift has happened to such a degree that some sellers are even arguing with their agents who suggest high asking prices. Just this week I had a seller suggest an asking price of more than 10% lower than I originally projected. I generally have a reputation of pricing correctly but of course I sometimes get it wrong. But it has been 15 or more years since I have had a seller tell me that they wanted to list at a much lower number than I had suggested.
With market dynamics remaining confusing at best, sellers are now getting on board and trying to appeal to an apprehensive buying pool by attractively pricing their homes. These sellers will likely be just that: SELLERS.
