Here are some tips to think about when trying to decide whether a Manhattan home has been on the market too long:
1. Consider the context – Manhattan is not just one big market. The market is broken down to many submarkets that are determined by elements such as neighborhood, price points and time of the year. For example, right now the average time on market for a Manhattan home in the luxury $4 million and over range is around a year. The average time on market for a property $1 million and under is around 60 days. So if you are looking at a luxury property that has been on the market for say 190 days it does not necessarily mean that there is anything wrong with it. The number of days is just a reflection of what is going on in the luxury market where the pool of buyers are fewer.
2. Look at the price. Is the price realistic? A number of sellers who are listing their properties with “aspirational prices”. They believe that there property is worth much more than market value because they heard rumors that another apartment in their building sold for a big number. That is why I spend so much time preparing a detailed comparable report and discuss how important correct pricing is in this market.
If you see that, the property has had one price reduction or more that indicates that the seller is becoming realistic about pricing. It may have taken time for the seller to come to that realization.
Perhaps the seller was overly ambitious early on and is now adjusting to market conditions. This does not mean that there is something wrong with the property. The initial price was just wrong for the market. If the new price is around the market value then it attracts a larger pool of buyers. At the new price, it is a good opportunity for the buyer and indicates that the seller is, now more motivated to get a deal done.
3. Timing – When it comes to listing a property not all seasons are created equal. A property coming on the market in December the slowest time of the year is in a much different position than a property coming on in February the start of the spring season and the busiest season of the year.
4. Condition – A property that needs to have a gut renovation is an excellent opportunity for buyers willing to take this project on. The pool of buyers for this type of property are much smaller than the pool for a renovated resale apartment or new construction. Structural issues can be a big deal. The buyer needs to know ahead of time whether he or she is going to be making the repairs or that the repairs will be done by the building.
5. Financing – Are there a high number of investment units? That could be a red flag to get financing. Banks look for a certain percentage of owner occupied units before they will approve a loan in a building. It could be also be that the building has very high monthlies. Unless an apartment is priced attractively enough to offset the high monthly charges, it will just continue to sit on the market. It could be the building’s weak financial condition. If the building has poor financials then banks will not approve a loan. In addition, it could be that the building requires all cash and a high percentage of liquid assets.
6. Presentation – What does the property look like online? It could be bad photos and a combination of poor marketing. When I take on a new listing, I hire the best photographer and have the property staged. I also have a compelling property and a neighborhood video to promote the listing. I have taken on many listings that fail to sell with previous brokers. New photos, staging, video and an aggressive marketing plan get the apartment sold.
7. Does this apartment fit your needs? Then do not just cross it off the list because it has been sitting on the market for a long time. Remember that the listing needs to be placed in the context to its specific and local market along with the history of the listing. Do your homework before you decide to make an offer. Hire a very experienced broker who will be able to render an expert opinion on the apartment’s value. Remember just because other buyers are passing on an apartment does not mean that it cannot be right for you! I have sold an apartment in my Fifth Avenue condo building that faces brick walls three times, each time at a higher price. Why? Because the unit is located in a highly coveted prewar condo on Fifth Avenue. The price is at the entry-level affordable price for the building.