perils of over-pricing / 36 White comes down again : Manhattan Loft Guy

Manhattan Loft Guy

Sep. 30, 2007 - perils of over-pricing / 36 White comes down again

challenge of a tired listing

The 3^rd floor at 36 White Street [fixed the link; THX Adam] should be an attractive loft listing for people comfortable with this northeast corner of TriBeCa. Asking $1.795mm and $1,344/mo for "1,525 sq ft" of "spectacular renovation", under $1,200/ft for a classic Tribeca loft seems a reasonable starting point.

But it has been on the market since April, first at $1.975mm, then at $1.85mm in May, now at $1.795mm as of this past week. There is a challenging layout, with the elevator almost in the middle of the biggest space, but there are big windows on 3 sides, two bathrooms, and enough space to squeeze another bedroom in somewhere, if desired.

Had it come out now at $1.795mm I suspect The Market would respond fairly well, and the owners would have a chance to sell it at something approximating the asking price.

psychology of rejection

I have no idea how many people have seen this listing or whether they have offers since April, so these comments are focused on the type of listing than this one particularly. But the problem is one of Death By Small Increments. (See Sept 26, 2006 puzzling price policy / slow death near Union Square.)

Chances are that people interested in this micro nabe (east of Church is a very different area than prime Tribeca) have seen this listing (live or on the web) when it was priced at nearly $2mm. Chances are, they rejected it as 'not worth it'. Having done that, it is hard for many buyers to take a fresh look when the price comes down, particularly when the price comes down in dribs and drabs.

new buyers, old history

Buyers new to the market more recently may notice the listing, but if they do they will (should) always be aware of its history. Leading to the inevitable question what's wrong with this listing that it hasn't sold since ...? It is very hard for a seller to establish marketing momentum in a five month old listing.

With buyers relatively more skittish these days, anything that gives a buyer reason to wonder (doubt) about whether she might be over-paying is a problem for a seller.

Leading to tough conversations between seller and agent. Sellers are reluctant to 'lose money' (money they never had, of course) by dropping the price. Agents may be a bit chagrined about the lack of success at a recommended asking price. But what the market may need to take a fresh look at a listing is a dramatic price change.

At this level, $55k does not feel like a lot of drama. Even when (the first time) they dropped $125k after 4 weeks on the market. Perhaps they waited too long for the second cut. Perhaps they should have bitten a bigger bullet then.

Or maybe the Fall market will look kindly on this well-appointed lot at the new price.

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