The lead article in today’s New York Times brings us some startling news: Some desperate buyers are having trouble selling their homes.
One case in point, Adam Rogers and his wife Gillian, whose place in Brooklyn remains on the market. They bought the Clinton Hill unit in January of 2006 for $599,000. Reports the newspaper:
“At first the the Rogerses asked $679,000, the price at which their neighbor had sold his apartment.
“They since cut the price several times and switched agents. . . The apartment is listed at $599,000; they will lose about $60,000 in transaction costs if it sells at that price.”
Next case: Elizabeth Demaray and her husband Hugo Bastidas, who paid $620,000 for their condo in East Harlem in February of 2007. This very spring, they put the apartment on the market for $715,000 “about what comparable units in the building. . . had sold for.”
Then there are Jon Vernon-Browne and Adriana Herrera, who purchased a condo in
Manhattan’s Financial District for $1 million in February 2007. They listed it in May for $1.1 million and rejected a low-ball offer.
Another unhappy seller that the Times interviewed is Danielle Dugan, who bought her fifth-floor walk-up in2006 and has been trying to sell the Brooklyn Heights co-op for $357,000 since then. Having received one offer, which was unacceptable, she dropped the price of the apartment to $340,000.
Well, duh! Of course, these units aren’t selling. Anything – apartments, dish towels, automobiles, anything – will sell if priced correctly to . . . sell.
The properties above simply are not priced to attract a buyer. To pick an extreme example, if the sellers lopped $200,000 off the ask for each of the above properties, do you think that buyers would be able to resist such bargains? Of course not!
Consider, the first couple. For reasons best known to them and their broker, they somehow reasoned that their apartment would be worth the same as another one that had already sold at a desirable price in a market that was, and is, incontestably dynamic. In addition, prices today are in the neighborhood of 25-30% below 2006 prices.
When they learned the hard way that they were wrong, the couple simply engaged in the invariably futile practice of chasing the market. It is death, in terms of their inevitable failure to attract an offer, by a thousand cuts. Moreover, the likelihood of all things being equal regarding both units is next to nil.
In a fit of irrational thinking, the second couple seems to believe that their co-op bought at the height of the market must be worth more today than they paid as the market cruises toward a bottom.
As for seller number three, she, too, is merely chasing the market if she thinks a $17,000 reduction is going to make buyers suddenly sit up and take notice.
If those folks were truly desperate, then they would (let me grasp for clichés): 1. Open their eyes; Swallow their pride; 3. Take the bull by the horns; 4. Keep a stiff upper a lip; 5; Cut their losses; and 6. Smile all the way to the bank.
They can run after the market, but they’ll never catch it unless they 7. Get real.
What is the latest on the housing market in the U.S. and Manhattan? To find out, subscribe free to my biweekly e-newsletter.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022