True Gotham

Some of my readers recently asked me what I meant when I said that "property is king" in the Manhattan real estate market.  Yesterday at one of my open houses, the evidence of this truth was never more powerfully displayed. I have been in the Manhattan residential real estate business for 16 years and never in that entire time have I experienced the masses of traffic that appeared at this open house yesterday.  I am not embellishing in the least when I tell you that about 150 people came through this apartment in 90 minutes!  I remain stunned.  We currently have 5 offers, 4 at the asking price, and anticipate many more before we go to a highest, best and final bid scenario.  I attribute this incredible amount of traffic and interest to one or more of the following reasons:

• The recent decline in interest rates. 
• Ultra-low Manhattan housing inventory 
• Attractively priced with very low maintenance.
• Condition of the property...it's pristine and beautifully decorated. 
• Location of the property (72nd Street just off of CPW)
• Transparency of listing (accurate square footage, accurate photography, and video tour...see below)

So if it's still not obvious why property is king as a Manhattan real estate agent, here's my point.  I have been working with some of my buyers for as long as 3 years.  Some of these buyers have difficulty trusting that I'm doing a good ("complete") job for them despite all of my efforts.  On the flip side, there is this particular seller whom I met 3 weeks ago and who was referred to me by someone she deems credible with high levels of integrity.  Therefore, she trusted me to price the apartment properly and market it effectively to appeal to the broadest segment of prospective purchasers.   In this instance, her trust, my expertise (I got this one right), and most importantly, current market conditions all came together likely resulting in an efficient sale whereby the market will truly dictate the price at which this home sells. 

And some additional anecdotal evidence of a more active Manhattan real estate market:

• A studio we have been representing for 5 months has multiple offers as of last week.
• And another home that we are representing received multiple offers after yesterday's open house.

That is precisely why PROPERTY IS KING!

Here's a video of the home that saw 150 or more bodies pass through Sunday between 11:30am and 1:00PM.

For my regular readers, you know I hesitate to market my properties on TrueGotham (and I'm not really marketing this one here either) but I felt that in this instance a display of the video may further explain the reasons behind the huge turnout for this property.

Wow...market seems more than robust huh Doug. Can't wait to see how real estate does this year with all the stimulus being provided(jumbo limits, Fed, rebates..etc). It's like reading the sports pages! Good Luck with those best and finals. Thanks for the continued update.

This was truly a great strategy, pricing that place $100k less than what it is probably worth to get maximum buyers in the door. Hardest part was probably getting the seller to go along with it. Nice work
ps. i am sure the franconia residents were thrilled when 150 showed up in their lobby this weekend.

As a potential buyer, I am impressed with your overall presentation of the property and the reasonable listing price. The pictures and video were also very well done. The price point and low maintenance definitely are big draws to buyers. The best part of the listing is the ability to attract buyers and sell within a very short timeframe. Time is money, expecially when you factor in time value of money. Good job.

Thanks for the kudos Good Gamble and JT although I don't think it was a gamble at all. More of a gamble is overpricing something and waiting for the "right" buyer to walk in a pay.

great job Doug! Realistic sellers who trust your guidance! Thats why you are who you are! When I tell my clients this strategy, and to use this method and give them hard data to back it up, they still show me the overpriced asking price of a property in their bldg that hasn't sold in 5 months!

Oh well. Solid advice and great to hear the healthy update on the market! Priced right properties are still selling!!

Thanks Noah. Of the many attendees yesterday, you should know that several discussed our blogs and how much they enjoy our honesty and candor about the market. One such person is one of the bidders. Keep up the good work.

thx You too! Apparently I am a doom & gloom blogger and expect the market to drop 50%!

Did you know that. I certainly didnt. Anyway, very very busy here too with buyer clients, as I only have one seller now and I am getting plenty of calls there too for E Harlem townhouse.

If you have any investment property buyers, let me know!!

Ok those bathroom tacky brass fixtures are to vomit for and the sink is cheap crap. Bada bing, right there you have a $6000 emergency renovation job just purely based on taste. I would also like to mention that, Subzero or not, that is a tiny kitchen and there is no front hall to speak of. Plus those butt-ugly couches must get thee hence to the Salvation Army before someone sees them.

So NP...you wanna bid? :-D

Property may be king, but if you price something low enough...in some ways this listing will hurt future sellers because it will now be an official comp. And the final selling price, even if it is closer to 1.1 mil (what I would expect this place to be worth, even in a soft market) won't be made public. So buyers (and, frankly, sellers' agents) are going to point to this and say, "But they only asked 999k for that place..."

Bolder,

That's a ludicrous analysis particularly because the closing price will be recorded and available as part of public record. The market is going to dictate what this place is worth which is precisely the way it should be. If 150 people come through your apartment and you have as many as 8-10 offers, that is a free market working beautifully. I guarantee that if this was priced at $1.1M or greater we would have recieved bids under $1M to avoid mansion tax.

Yes, the market always dictates, but how you arrive at the price is in some ways as important as the price itself. I'd be interested to know what recent comps in the building were.

Re the mansion tax: I don't think that 10k is much of a sticking point for anyone with 250k in liquid assets.

I will cheerfully admit that 1 mil is a psychological barrier, however, and anything within 50-100k of that amount is a tough pricing point.

Bolder,

I threw darts with a monkey to see what the price would be...seriously...I did an extensive market analysis as I always do. And arriving at the "right" price being as important as the price itself seems a bit redundant? You can't have one without the other. Again, I have to reiterate that when a seller follows this strategy (which btw I have done with my own property) they sell quickly and for a great price. Almost always when they insist on a higher price or I miss the mark (that happens too of course) we end up on the market for a considerably longer time and selling at a lower price.

I noticed on streeteasy the original list price was 1.1 but then it was reduced to the current price a few days later. Care to shed some light on that?

Doug,

I really appreciate your willingness to talk openly about square footage. I'm wondering if you can explain where the 1000 sf figure comes from - when I look, it seems closer to 900. The living room and two bedrooms essentially form a big rectangle that's 17.5*41, or about 700 sf. The kitchen and hallway seem to be another 100 -120, and the two bathrooms seem to be another 80-100. Would you mind explaining where theother 100 comes from?

Glad you asked Jay and just another reason that StreetEasy isn't as relaible as many think. An agent in my office had entered this apartment in our listing system as a "lead" so that s/he would get a small piece of the commission when it was finally listed. They guessed at price of $1.1M (I'm assuming because it was erroneously listed as being 1100 square feet)and entered that price in the system. I then activated the unit and completed all of the unit and building data. The price update field is in an entirely seperate area of the database and I simply forgot to update it right away. It wasn't until the next day that I received an email inquiry about the property and noticed the incorrect price. So it was never priced at $1.1M...that was another agent's best guess before it came on the market. Hope that makes things clear.

CuriousBuyer,

Great question. You should first watch the 5 TGTV episodes on square footage. Don Meade who appears in the series measured the apartment for us. It has been listed since 1985 as being 1100sf. We knew that was grossly overstated but we are frequently forced by sellers to keep perviously stated square footage numbers. The interior perimeter, including all closets, is much closer to 1000sf than 900sf so we listed it as 1000sf.

These discrepancies in previously stated versus "real" square footage open a huge can of worms that transcends just how much space someone is getting. For example, when pricing a property in a co-op, it's very hard to calculate a price/sf value becuase stated square footages are all over the place and inaccurate. We do our very best to make sure that our measurements are accurate making the listing as transparent as if you were standing in the place yourself. Bring your tape measurer and I think you'll find that it's very close to if not exactly 1000sf.

Great blog, and great entry. I respect Urbandigs' desire to tell the truth as he sees it, however, I think he could learn a great deal from you. I have a listing in Tribeca, the first week it was on the market we had 11 showings, 1 offer (Too low for a counter). Last week, with all the market noise, we had 1 showing. This week, we already have had three before Wednesday (The building does not allow open houses). My sense is that buyers have come to the realization that rates for 7/1 and 5/1 ARMs are getting very low, and inventory is super tight. I anticipate a pretty strong Spring. In my opinion, last year at this time was far worse than today, for the Manhattan market.

Thanks mh23 but I can learn a LOT from Noah too. He's a consumate professional with integrity and very bright too. I love his blog. It does seem that things are picking up again but I still don't see the activity that I personally experienced this time last year.

mh23 - no doubt I could learn a ton from Doug about this business; of course I can as he has 12+ years more experience and that goes a long way towards servicing clients. He proves time and again to be a solid, hard working, honest & ethical broker who works his a$$ off for his clients. Plus, Im sure he knows tons of tricks in marketing and negotiating that was learned from his time in this field.

I would love to learn from Doug to take my sales business to a higher level. Im only 4 years in this business and most of my deals were sub $2M..breaking into that higher level is something I want to do in years to come.

Ill always offer my honest views on market, and at some point I will turn positive on NYC. For now, Im a bit skeptical and Ill publicly explain why.

Noah,

Thanks for the kind words. I wouldn't worry so much about breaking into the higher end market. Contrary to what most people think, the meat and potatoes of my biz is in the $1-2M range with some deals higher and some lower. I just try to provide EVERY seller, regardless of the price point, the same service and make sure I know which market I'm targeting with the sales strategy.

And again, you're doing great and you know that. As I have said in the past, for someone in the biz for 4 years, you have more credibility than most and I would trust you to sell me an apartment anytime. I happen to already have a good broker :-D

We sold our 1 bedroom, 1 bath UES condo in a day by this same method: our broker convinced us to underprice by 100K (beneath market value as determined by comparable sales in our bldg.) It was a leap for us to agree to this, but the open house was flooded with over 120 visitors, many making offers above asking right away. A few days later, we had 10 "best and highest" bids to choose from, all at least 100K above asking, at least half of the offers were for cash transactions. Woohoo!

Forget the recession and all the lying brokers over the past years...

anecdotal broker evidence is what we can trust!!!

Eddie, my cynical blog reader, I never claim to provide anything but "anecdotal" evidence but it's front lines reporting from the trenches of the industry and I report both good and bad (just read the rest of the blog). You can choose to make of it what you like but it is indeed nothing more than honest anecdotal evidence of a busy market: no more, no less.

Noah, One other thing about Doug... he's doing video better than most any other agent in the city. I'm a renter with no prior experience in the 'for sale' market. Doug, your video helps provide context to a conversation that would otherwise go right over my head.