The most common question I’m currently being asked by owners seeking to sell their Manhattan homes is "how long have you been doing this?" And of course the second question is "how’s the market?" which seems to be just an inquiry to further support what they already know…it’s shaky.
I became a real estate agent in the early 90’s when property often took 2 or more years to sell. It was a time when buyers were like gold and taking the exclusive right to sell a property required careful consideration as the marketing alone could easily eat up most of the commission if you were lucky enough to sell it and see that commission. That said, transactions did take place but the experienced brokers/agents who had been around the block were the ones sought as the experts during that time. It made it very difficult for a newbie like me to earn a living which was precisely why I focused most of my energy on renting properties (what a disgusting experience that was!).
Fast forward to today. Although transactions continue to take place across all segments of the Manhattan real estate market, the pace has definitely slowed. For the first time in 15 years, I have a Georgian Townhouse at 863 Riverside Drive in Washington Heights (cheap plug I know but what the hey) that I have been marketing now for 18 months. It was listed with another broker for 6 month’s prior so it’s been listed now for two years. This is not the norm of course and I’m not implying that our current market has dipped to the snail’s pace of the early 90’s but it is definitely another indication to me that our market continues to change.
Here is how I see the story with the above property. It was originally listed in May 2006 at a very aggressive and ambitious price set by the executor of the estate. The property was listed as being in East Harlem in the listing database for 6 months making it impossible for people looking in Washington Heights to find it. I took over the home in December 2006 and against my better judgment followed the wishes of the executor to keep the price at $2,450,000. I was however able to suggest that we should market at that price for a completed renovation and $2.2M as is. It was still too high. By the time we reduced the price to $2.2M in June 2007, buyer psychology had started to change and August brought us the credit crisis. In September 2007 we reduced the price to $1.995M which is where it has remained for the past 10 months. We have had 2 contracts out in the past 2 months at levels very close to the asking price but one party ultimately could not obtain financing and the other couldn’t build high enough to make the space work for their religious organization. So nearly 20 months after taking this property over, it remains listed at $1.995M and I continue to spend significant time and money marketing and showing the home in an effort to procure the "right" buyer. The reason that the seller has continued to renew his agreement with me is because he appreciates the continuous effort over the past 19 months that we have made to procure a buyer…and we will sell the home. The reason that I continue to market the home is because I believe it is a magnificent property for the right owner and of course I have put way too much sweat into the place now to simply walk away. I remain committed to sell this home.
There are two significant points to this story. Obviously hindsight is 20/20 but had the owner allowed me or his first broker to price the home right out of the gate at $1.995M, the estate would have been sold almost 2 years ago and everyone would have moved on with their lives. As it is, this is a prime example of how being behind the curve in a softening market only results in more time on the market and a lower final sales price. The key is to be ahead of the curve and price a property at an attractive level for current buyer psychology. The second important point is that a seller should constantly and consistently be checking in with their agent to make sure that marketing is continuing and being tailored in a constant effort to procure a buyer for their home. All too often in markets like the early 90’s, agents get a signature on an exclusive listing agreement and then just hope and pray that the right person comes along to buy it.
My business is about selling homes, not accumulating listings that can’t be sold. So on the rare occasion that I find myself with a property for this length of time, I constantly evaluate my marketing strategy, motivation and whether or not I’m captaining the ship. That said, I have to go call my captain…uh…um…I mean seller. Eureka!!!