So we have three contracts reported today:
25 Mooreland, 588 DOM, reduced to $4.395 from $6.250: 70% (final price not yet disclosed)
16 Hope Farm, 471 DOM, reduced to $2.349 from $3.396: 69%
5 Conyer Farm, 549 DOM, reduced to $8.250 from $12.500: 66%
It’s just a crazy suggestion, but if a seller were to put his first price at a level closer to these final ones, I bet the days on market would be reduced.
Sunday’s NY Times real estate section has an encouraging (for sellers) article on multiple bids resuming for city apartments . Before you raise your price and call in the movers, though, read the fine print:
Brokers say that bidding wars are almost always set up by listings that are “priced well,” and by that they mean 20 to 30 percent below the high-water marks of early 2008.
Jonathan J. Miller, the president of the appraisal firm Miller Samuel, estimated that two-thirds of the roughly 4,000 apartments for sale in Manhattan are priced too high for the current market.
“So,” Mr. Miller said, “you have this weird situation right now where you have above-average inventory, but people are fighting over the ones that are priced correctly.”
I’ve preached pricing for probably eight years now, but it’s even more important in this market than during the boom. Read the entire article (use Google News, search “New York bidding wars”” if you aren’t a registered Times user and want to skip the hassle of becoming one) and then perhaps sit down with your agent and plot a new pricing strategy for next year.
Second homes are selling on average at 19% off asking prices (which, one hopes, were reduced over the past year) and sales are booming. Greenwich home owners are generally too financially sophisticated to fall for that trap; no one’s going to steal their house!
49 Shore Road
Okay, so you pay $1.3 million for the land this sits on in 2004, ditz around awhile and finally get your spec house built and on the market in April 2008 for $4.2 million. No one buys it. Do you: (a) lower the price or (b) fire three brokers but insist on keeping the price where it is? If you said “b”, congratulations – you and this builder will probably be painting your roofs white just in time for winter.
73 Dearfield Drive is an okay colonial that has been up for sale since June, 2005. It started at $2.295 and now, three brokers, four years and numerous prices reductions later, it’s listed at $1.595 million. I hope the owner enjoyed exposing his home to strangers all that time because I can’t think of any other reason to keep it over-priced and unsold for so long.
Someone’s out of whack here, me or my peers, but I’m watching listings come on at prices I find astonishingly out of touch with where I see the market. Houses on negligible streets asking $1.1, $1.2 and $900,000 + when, using the 70% assessed value tool (which I do think is particularly helpful in lower end houses) they should be at $650,00 – $675,000 tops. Those are the numbers I supplied mentally, by the way, before I checked assessed value.
11 Green Lane
One house I feel free to use as an example because it’s now owned by a bank and I don’t worry about injuring a corporation’s feelings is 11 Green Lane, in western Greenwich. It sold for $700,000 in ’04, the owner ran into trouble and it was put up for sale last year, starting at $895 and dropping as low as $515,000 before the bank took it. Now the bank wants $569,000 for it. If it didn’t sell at $515,000 why would it sell for more? Assessed value is $483,000, which might be about right.