The Alexander Team is off to a stellar start in the fall selling season, seeing no signs of slowing down in the market in New York. With new listings at 145 Hudson, One York. The Plaza (1 Central Park South), 200 East 69th Street, 111 East 88th Street, 67 East 11th Street, and 401 East 65th Street, there is no shortage of new inventory from which to choose from The Alexander Team. Today we wanted to share our thoughts on something that is quite an art when it comes to real estate: pricing.
It is not a science, pricing a residence in New York City; rather, it is truly an art. In the current robust market, sellers and brokers are often overzealous about pricing, pricing far over where the market is dictating in hopes that perhaps a mystery “foreign buyer” will come along and buy with cash and without question. More often than not, this ghost buyer never appears. With all of the public information available on the web today to purchasers, no decision could be as unwise. Brokers and purchasers can figure out quite quickly that a residence is far overpriced, leading to either a lack of activity or aggressive lowball offers. This is why we strive at The Alexander Team to price apartments and houses in line with the market after deep comparative and market analyses, landing on pricing that is aggressive yet attainable: the end goal is always to sell.
This brings us to another art: the bidding war. Every seller wants a bidding war; it drives the price above what you initially asked for and gives you your pick of the litter when choosing the purchaser of your home. It is our goal at The Alexander Team to incite as many of these competitions as possible for our sellers. However, with overly aggressive pricing, bidding wars are becoming more few and far between. However, when pricing is executed correctly, they still can happen and man are they sometimes intense! Let us take a look at a few case studies:
Recently, at 740 Park Avenue, arguably the most prestigious cooperative building in New York, a duplex asking $48 million, sold for a whopping $71.3 million, $23.3 million over the asking price. Three prospective purchasers, two of them billionaires, pushed the price up in a wild bidding war. While residences here normally ask high prices, still asking too high a price may not have resulted in so many highly interested parties.
And downtown at 354 Broome Street, The Alexander Team duplicated this phenomenon with the sale of two side-by-side residences. Rather than ask an overly aggressive price for the neighborhood, the apartments were listed in line with the market. Within one day on the market, two offers had already come in. Three days later, a grand total of fifteen offers had arrived and the apartments are now in contract at 11% over the asking price. If we had priced the apartments way too high, you can rest assured they would still be sitting on the market.
So although the market remains shockingly robust and inventory low, it does not mean that every seller can find a buyer for his or her apartment at a high price. Buyers are still searching for value, looking for the homes that are priced at where the market is dictating. Don’t overprice and lag on the market for months—price well, and watch the bidding war magic happen.