Anyone who regularly reads this column know that I find fault with asking prices most of the time in the Manhattan residential real estate market.
Let’s forget about irrational pricing, which can be explained by some combination of the listing broker’s ignorance or hubris and the seller obstinacy or imagination. I’m sure you can add your own explanations as well.
With regard to those numerous condos, co-ops and townhouses with offering prices usually about 10-20 percent too high, the obvious reason for that commonplace situation rests on perceptions of the market.
When brokers, sellers and buyers believe the market belongs to buyers, they share an understanding that bids invariably will fall far below the asking price. Buyers want to think that they are getting a bargain, and owners don’t want to feel screwed.
Thus, do the owners and their real estate agents set prices at a point that allows them to negotiate down and may permit a meeting of the minds perhaps halfway between the listing price and the offer.
In that way, the consensus is that the sold price will reflect fair market value.
I suppose there is some truth to such a position. However, everyone knows that asking prices represent a big lie. If that is so, how does the lie serve a purpose?
In an ideal world where every subway train ran on time and every fare were still a nickel, sold prices would begin and end close to asking prices. In such a world, there would be no need to lie.
Here is a sample of properties that are listed by various brokers and that I have seen:
- A lovely two-bedroom, two-bath corner co-op that shows very well in a so-so building between Central Park West and Columbus Avenue in the low 70s. With an appealing gut renovation, including many built-ins, lots of sunlight and arresting views of the park, this apartment has a kitchen with oddly chosen marble countertops, deep closets and an antique decorative fireplace. Rarely used as a pied-à-terre in a 1926 pet-friendly doorman building, the unit in pristine condition is getting closer to the correct price at $1.995 million, twice reduced from $2.25 million, with monthly maintenance of $2,853.
- In the mid 90s on a corner of Broadway, a 1,000-sf terrace attached to a 981-sf condo in a 1983 high-rise that boasts a huge pool, garage and other amenities. The bright corner apartment on a relatively low floor also has a large master bedroom and, on the other side of the living room with its dining area, a much smaller one. The pass-through galley kitchen with breakfast bar has been updated modestly, and the unit surely went to contract (at the end of January) near its offering price of $1.25 million with common charges of $1,400 and real estate taxes of $743 per month.
- With two of its three bay windows interrupted by a wall that creates a 9’2″-wide bedroom, a co-op in the low 100s on a Riverside Park block. This unit is on the top floor of a pet-friendly 1925 townhouse with an actual elevator and a basement laundry room. The open kitchen has a garish yellow color scheme, including laminate countertops, bubble-gum pink walls decorate the doorway to an ordinary bath, there is a decorative fireplace, and the bedroom has novel sliding closets like those pull-out pantries found in kitchens. At a reduced $425,000 asking price with monthly maintenance of $875, this apartment probably found a buyer willing to pay $400,000 when it went under contract last month.
- In the high 80s between West End Avenue and Riverside Drive, a two-bedroom, two-and-a-half-bath co-op that has a welcoming eat-in kitchen renovated and enlarged into the onetime maid’s room to include the usual granite, stainless and custom cabinetry. With older floors that couldn’t stand another sanding, abundant closets, a decent dining area, many built-ins, washer/dryer and southern exposures, the 1,450-sf apartment in a 1930 building with severely limited amenities was aggressively listed for $1.3 million with considerable maintenance of $2,270 monthly at the time it went to contract in January.
- A 760-sf co-op in a 1905 Lincoln Square building replete with a surfeit of church-like Gothic ornamentation. This one-bedroom apartment boasts 13-foot ceilings, a high-end kitchen with, however, only a half-size dishwasher, mostly sky views north, others west and oversize windows. The floors could use some work, the nicely improved bath has just a stall shower and there are five steps down to the unit’s entrance on a mid floor. As for the doorman building, it is pet friendly, provides a live-in super and has an invitingly landscaped roof deck from which nearby Central Park is visible. Although the original listing price of $825,000 with monthly maintenance of $1,259 was said to be non-negotiable, the amount was cut to a reasonable $799,000 in January.
Tomorrow: A Today Show flub
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Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022