Jan. 7, 2009 - are they fooling only each other? / 3 neighbors push, 1 smiles

regressing (meanly)
I have been following a funky-but-spectacular (in its way) Manhattan loft and -- after noting the last price drop (and reading a little frustration between the lines of the marketing text) -- I checked on two other units in the same building also for sale. Their stories are strikingly similar; in cynical terms, they are even predictable (from an outside cynic's perspective). From a market dynamics perspective, they are probably dragging on each other at this point.

From the perspective of neighborly relations, I wonder what happens when these folks run into each other in the elevator. There are three sellers who seem unwilling to break away from the pack, or to reach for the clearing price of a neighbor.

Unit "A" (not its real name) is my personal favorite and has been on the market the better part of a year. It has had 3 price drops, having started around $1,400/ft. It is now right above $1,000/ft.

Unit "B" is equally braggy (though in a different way) and has been available for a shorter period than "A", but has also had 3 price drops (in a more compressed range). "B" started under $1,200/ft and is now offered around $1,050.

Unit "C" is also brag-worthy but has been around long enough for only one price drop, from around $1,100/ft to just over (stop me if you have heard this before ...) $1,000/ft.

no surprise, right?
The last sale in the building was in November, and Unit "D" is also a member of the beautifully-renovated school. That one started at nearly $1,200/ft almost a year ago but had to come down before striking a deal 13% off the reduced price -- it got a bit under $950/ft. Unit D struck its deal before Unit C came to market, but by then all 3 of the selling neighbors were probably aware of where Unit D had to go for a deal.

This strikes me as sufficiently interesting (and convoluted) for a primitive table (all prices approximate, of course, to protect the anonymous -- and MLG). Hope this does not make it more confusing:
 

Fascinating how the three available lofts are pricing ever closer to $1,000/ft, even though each is being marketed as somehow 'special'. Fascinating that none of the 3 'survivors' has yet bitten the asking price bullet by matching the last actual sale. I wonder what it will take to get another one of these babies sold (the old clearing price may be too old by then).

© Sandy Mattingly 2009  

Jan. 7, 2009 - RE: are they fooling only each other? / 3 neighbors push, 1 smiles

One of the mitigating factors may be how long each of these has owned their unit.  Those with more equity can afford to drop into the lower range without risking bankruptcy.

However what you describe is otherwise fairly typical.  Each is hoping that their asking price won't scare off a lower offer.  They are trying to find the place at which an offer will come in with room to negotiate into the range of the previous sale.

"D" was obviously motivated as evidenced by the timely drop way down in the 3th month after coming to market.  And you are right, the longer they wait to drop the price, the higher the risk of chasing the market down even further.

As a Buyers agent, I would councel my clients to take a look and make any offer based upon the previous closing price, or even slightly less - for room to negotiate.

That's it for now.