The impetus for this post comes from a recent comment thread at StreetEasy entitled Doug Heddings now pricing all new listings 25% below comps which was obviously born from my recent post Manhattan Real Estate Market Snapshot and A Broker Blogger’s Dilemma. In that post I did in fact state that I was "pricing ALL new properties at levels of approximately 25% below sales prices of same or similar units (comps aren’t always in the same building and more frequently are not) this past summer (2008) resulting in a significant increase in buyer traffic."
Here is what I would like to add:
- I need a sellers cooperation to utilize this pricing strategy. For those who don’t agree with the strategy, we attempt to come to terms with another strategy that doesn’t entail marketing an excessively overpriced home. If we don’t come to terms, I don’t take the listing…IN TODAY’S MARKET.
- Comps (comparable sales) are almost impossible to use in pricing property in today’s market because it is almost impossible to know at what price contracts are being signed…IN TODAY’S MARKET.
- I should have said that those sellers who are agreeing to price at approximately 25% below summer price levels are seeing an increase in buyer traffic. Others are not.
- I shouldn’t have to say this again but I will for new readers of TrueGotham: What I write is anecdotal and based on my personal real estate business as well as some of my closest experienced colleagues…IN TODAY’S MARKET.
- My posts are also being reported REAL TIME and ahead of any lagging market reports.
When I spoke about a pending implosion of the real estate market almost 2 years ago that I was a hero (not to many of my colleagues of course). Now I’m reporting an uptick in my personal sales business from 4Q 2008 and a decline in prices and I’m accused of "broker-speak and spin." That perception is actually disconcerting given that the mission of this blog has always been to fight against that very thing.
Check out these quotes from the comment thread (I didn’t respond on the thread but only here):
Don’t think for a second that Doug Heddings is on top of current conditions. This is a recent quote of his "With inventory up almost 50% since last year, now is an excellent time to look and if you are fortunate enough to find a realistic seller you may even want to buy. That said, inventory has stabilized which likely means that all those who need to sell have put their places on the market and others are going to stay put." Inventory has stabilized??? of what chocolate bars?, 3 headed toads? He certainly is not talking about Manhattan residential Real Estate.
At the time I said that, it did appear that inventory had experienced a seasonal leveling off for the first 2 weeks of 2009 and I will admit that I should have qualified that I believed it was seasonal… and that I was talking about both chocolate bars and 3 headed toads. TODAY, inventory has crept up another 7% to 9,549 units in January as seen real time on UrbanDigs courtesy of StreetEasy.
And check out this response to the above comment:
patient09, the OP wasn’t meant as praise for DH. I agree he’s been plenty guilty of typical brokerspeak and spin. Obviously he’s trying to paint a rosier picture here with his "increased buyer traffic." I did think it was interesting that a high-profile broker publicly announced he was now listing everything 25% below comps while so many others are just playing stupid.
"Rosier picture?" I’m not "painting" anything but reality here. Never have and never will stray from that. I "spin" nothing. I share the goings-on in my own business as well as that of some of my colleagues. From that experience in the trenches on a daily basis, I sometimes share opinions, make judgments and even go out on a limb with an occasional prediction about the Manhattan real estate market. I have been right and of course, I have been wrong.
And lastly, check out this 3 comment thread:
heddings — I am familiar with his 863 riverside listing — it is still groslly overpriced given the location — my recollection is that he posted multiple price increases and then started down. Given the time on market, at least this one should accelerate down if he means what he says
WRONG! I took 863 RSD over for the estate from another agent and after multiple requests to lower the price yet again, the seller has chosen to stay at $1.795M. He has no mortgage and like many sellers, is frustrated at the prospect of selling for significantly less than he could have gotten last year. The price BTW is not totally out of whack for 4800sf as it certainly won’t sell at ask. And I never raised the price.
He’s lowering prices to what they should somewhat be naturally, prices still needs and will get some additional, overdue, price drops. In his greedy mind he wants to create a bidding war to bring prices up to 25% and more, it won’t happen again for a long long long time. Elvis has left the building.
Really mutombonyc? I want a bidding war? In today’s market? Are you kidding me? My "greedy mind" has been selling real estate in Manhattan for 16 years and if you ever read my blog you would know that I was talking about "Elvis leaving the building" long before it was popular.
If he wants a bidding war he needs to drop the prices 50%. 25% is just where the market is today, he’ll be chasing the market down from there.
And this comment illustrates my point perfectly that the perception of the broker’s place in the real estate market is ALL WRONG. I’m not chasing the market anywhere. Buyers and sellers "chase" markets. A real estate broker is a mediator and I do my very best to analyze current (TODAY’S) market data and dynamics in an effort to provide professional guidance for my client’s best interest. This is why I’m busy right now.
If you want more, follow the link above to the view the entire comment thread. I’m accused of misleading someone into thinking a new property has a washer/dryer because I said the building had a laundry room and I even got a $2.2M offer for one of my properties.
New York City real estate remains a fascination of many and broker bashing seems to be alive and well as everyone is looking for someone at whom they may point the finger. Fortunately for me, I believe that these particular folks are in the minority and that my clients respect and appreciate the expertise and level of service I bring to the table.