Luxury apartments keep lingering on the market.
As inventory grows and a buyer’s market creates the opportunity to extend negotiations, high-end properties are moving at a sluggish pace. In this environment, it’s sellers and developers who are quick to course correct and adjust pricing that have an advantage, brokers said.
In the last week of July, luxury properties that went into contract were sitting on the market for an average of 536 days, according to Olshan’s market report. Year to date, the average is 428 days.
While averages are inherently skewed — certain properties that have sat on the market for a long time could increase the figure — the numbers still highlight the slow pace. Buyers are still unsure of where the market bottoms out, said Stribling’s Sean Murphy Turner. While they’re waiting it out, there’s no rush to make a purchase.
“They don’t want to be the ones to pull the trigger,” she said.
When properties do sell, it’s frequently at a steep discount. This month, an Upper West Side mansion owned by oil heiress Helen LaKelly Hunt sold for $11.6 million — almost half of the amount it was listed for. Earlier this year, late banker and philanthropist David Rockefeller’s Upper East Side mansion sold for $20 million, which was a $12.5 million discount from the original asking price. Another UES mansion sold for $21 million less than its ask.
Properties will still sell when the price is right — but the expectation for negotiation is still baked into the current environment, brokers said. That leaves a seller to wonder whether to price a home expecting to negotiate, or price it lower from the get-go in hopes it’ll be compelling?
Negotiations and price cuts prolong the process, said Laura Tomana, director of research and analytics at CORE. Listings will go stale, making timing key for developers launching new projects.
In the end, buyers are in no rush and want to feel like they’ve snagged a bargain, said CORE’s Elizabeth Kee.
“It’s a thing that perpetuates itself,” she said. “They have to feel like they’re getting a deal.”