Forget about aspirational pricing. Sellers serious about offloading their luxury apartments will need to slash prices to find buyers who have plenty of new development alternatives to choose from, top brokers said.
After a slow start to the typically busy fall, agents said they’re just beginning to move product – and only when their sellers get real about asking prices.
“Most sellers are absolutely not realistic,” said Dolly Lenz, speaking at a conference hosted by the magazine Haute Living at the Plaza Hotel’s Oak Room. “They’re buying into the hype and they’re bringing it to the brokers and saying, ‘Oh no, my apartment will sell for $15 million.’ Well, the last sale in your building was for $8 million.”
Sellers may also have to adjust their expectations about how long it will take their apartments to sell. They may be used to reading headlines about high-velocity sales coming out of the low-inventory landscape of 2013 and 2014, but times are different now.
“The catch word is velocity,” said Stribling & Associates’ Cathy Taub. “I want a year-long exclusive, not six months. Sellers are accustomed to expecting their properties to sell very quickly and feverish emails start coming in after a property has been on the market for just three or four weeks. Unless pricing is really lean, buyers just aren’t feeling the urgency.”
Some sellers appear to have gotten the message.
Approximately 650 New York City listings lowered their ask by at least 5 percent over the last 30 days, compared to 419 listings in the previous 30-day period, according to StreetEasy. A total of 29 of those homes were priced at $10 million and up.
“Everyone expected there to be an uptick in activity coming back from Labor Day but there wasn’t,” said Compass’ Leonard Steinberg. “In November, all of a sudden the email inboxes are cluttered with price reductions.”
Sellers are getting into “hunker down position,” said Sotheby’s broker Stan Ponte.
It’s already looking like a buyer’s market, particularly in higher-price brackets, but they still might do well to wait and watch, some said.
“If you’re strongly negotiating on an apartment today, you might be able to get an excellent deal,” said Shlomi Reuveni of Town Residential, forecasting further increases in luxe inventory. “If you wait another six months, you might get an even better one. Then again, if you wait another six months, you might miss the boat.”
As for finding a bargain, Lenz said it’s best to take the road less traveled in search of a deal.
“Look where everybody else isn’t,” she said. “They’re all in the West Village or Soho. Try the Upper East Side. It’s not as bad as you remember.”