Pick a million, any million
When it comes to pricing properties these days, brokers in Manhattan are at a loss. In a dynamic market, they’ll tell you, no one knows the best asking price.
Now, comparable recorded sales are almost useless: Those contracts were signed months previously, and the housing market has changed.
Even contracts signed last week may not well reflect the ups and downs of the stock and bond markets, vagaries of the global economy, fluctuations in consumer confidence, ever-changing demographics and desires of the buying public, sales by distressed parties, purchases by buyers who are determined to be in a particular building, or effects of disasters such as the oil spill.
Moreover, no two properties are precisely comparable – even the same line one floor higher or lower in an apartment building – making pricing more of an art than a science.
That said, pricing has seemed especially quixotic of late, reflecting seasonality and the uncertainties above. Examples abound of apparently similar properties being offered for wildly disparate amounts of money, with some bouncing more than once between higher and lower prices.
Imponderable, unknowable and unpredictable information particularly compounds the problem of correctly pricing luxury apartments, for which the eye of the buyer may be the best gauge of all in judging their worth. For one thing, such trophy units represent a tiny portion of the market. And that small portion will be attracted to a minuscule number of the trophy units, if any.
Consider a listed co-op that occupies a high full floor on Park Avenue in mid-Manhattan and costs $9,000 in monthly maintenance. Is it worth the $10 million asking price? More? Less?
Although the sumptuous Old World décor is not for everyone, the 11-room apartment, which comes with a small studio apartment on another floor, makes an uncommonly strong impression.
You’ll find a huge Aubusson rug in a living room (in the photo above) measuring 24.6 feet by 33 feet, wood-burning fireplaces (three), crystal chandeliers, five and a half marble baths, a balcony with architectural balustrades, expansive kitchen that is mostly up to date, faux painting and doors to nowhere, heavy drapes, and horizontal surfaces overloaded with costly objéts.
That the owners have homes in several countries as far-flung as South Africa tells you something about the opulence of the place, which any buyer is likely to make over completely.
More often than not, trophy properties sell for significantly less money than do those listed below $10 million. However, discounts tend to range well into the double digits for apartments and townhouses offered for, say, $25 million or more–for example:
- The townhouse at 63 E. 62nd St., where disgraced art dealer Lawrence Salander lived originally listed for $25 million and cut to $16 million a year ago recently sold for $14 million, not including any concession;
- Another townhouse, at 19 E. 70th St., went on the market this year for $59.5 million and then was reduced to $49 million, at which level it languishes;
- In the Time-Warner Center, a 62nd-floor condo that still is available after a price reduction in April from $33,689,000 to $29,750,000;
- Also greatly reduced, by 25 percent, was a townhouse that happens to be on East 70th St., as well. The sellers, Shelley and Donald Rubin, cut the price to $14.9 million in May after it sat on the market for a year and thereby found a buyer.
It is next to impossible to know which trophy property will appeal to a buyer with deep pockets at what price. As I mentioned, there may be only a couple of buyers who have both the means and the aspirations of owning a given property at a given moment.
Pricing, then, is something like guessing the number of jellybeans in a jar: Sellers and their brokers might get lucky, but chances are good that they’ll have to guess again and again before they can clinch a sale.
Note: For more of my critical comments about a variety of specific properties, you may want to subscribe free to the comprehensive e-newsletter that I write and publish on alternate Fridays (on hiatus until September), covering a range of news about the U.S. and New York housing markets, mortgage developments, household tips, celebrity sales and purchases, research and the predictions of experts.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022