Aspirational pricing is out of style: A Gilded Age mansion overlooking Central Park with protected air rights has received another price cut.
The asking price for the 15,000-square-foot townhouse at 973 Fifth Avenue has been decreased to $58 million, down from $80 million when it first listed three years ago. The price had previously been cut to $72.5 million and $65 million.
While it won’t reset the townhouse market, the home would still snag the 6th highest ever sale price for a townhouse if it gets its new ask.
“By pricing it just under $60 million, on the one hand, you’re giving it the acknowledgement that it is one of the best single-family mansions in NYC,” said Adam Modlin, who took the listing over nine months ago. “But you’re also sending a message to buyers that it’s priced appropriately.”
The city’s most expensive townhouse, at 14 East 67th Street, went for $77.1 million, in a deal where Modlin represented the seller.
The nearly 30 percent price cut at 973 Fifth Avenue comes despite protected air rights and a several million dollar renovation employing historians to preserve original details. The home’s roof deck offers 360-degree views that can’t be encroached on by new development, because of its location on the “Cook Block”, where buildings can’t exceed six stories, according to Modlin’s listing. It also has 10 bedrooms and 8.5 bathrooms.
Price reductions are now prominent in the luxury market, despite strong sales volume.
About 15 percent of luxury listings — homes priced at $4 million or more — had price reductions last quarter, up from 12.5 percent the year before, according to data collected by analyst Jonathan Miller. Normally, when sales are strong, reductions become less frequent because buyers lose negotiating power. Manhattan’s luxury market has seen more than 25 contracts signed for the past three weeks.
But price cuts are sticking around.
It’s taken time for the prices to adjust, Miller explained, because sellers have reacted slowly to new market conditions.
“Sellers are still anchored to the conditions before the Fed pivot,” he said, referring to an interest rate hike that started over a year ago. “That creates a wider spread between what they’re asking and what the market will pay.”
The two most expensive homes to enter contract last week did so after price reductions: The 9th floor at 778 Park Avenue was marked down to $20 million from $25 million, and the townhouse at 14 East 81st Street, also represented by Modlin, entered contract with a $20 million asking price, down from $22 million. The week before, a penthouse unit at 135 East 79th Street went into contract with a similar $2.5 million price cut.
Price reductions can be more common in the ultra-luxury market because comparisons are harder to find. That’s particularly true with townhouses, which have more variation than condos, where there can be dozens of identical units in a single building.
“A townhouse is more like a painting,” said Modlin. “And what should a rare painting sell for? Well, that is not obvious and is often in the eye of the potential buyer.”
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Some ultra-high-net-worth sellers sometimes opt for aspirational pricing because there’s no rush to sell — they don’t need the cash from one home to pay for the next.
“If the right buyer is out there at this moment and I can optimize and capture that one buyer I’ll give it six months or a year, and if I don’t make the right match, a year from now I can make adjustments,” said Modlin, explaining the rationale.
“People don’t ever want to think they left money on the table.”