How Low Can You Go - High End Blues
A: High End housing in NYC is slowing down with units staying on the market much longer, and if not priced aggressively is putting sellers in the bad position of having to reduce their asking price numerous times. How low can it go? It depends on how desperate the seller is and how soon they need the money!
Its the toughest niche market to sell in when the housing market starts to slowdown as the New York City real estate market has over the past 6-8 months. Those looking to sell their properties on 5th Avenue, Madison Ave or Central Park West are finding it tough to get their original asking prices. I'm hearing that Open Houses are just that, OPEN with not many people showing up. Are buyers scared to put down their millions in NYC real estate if they think the market is slowing down? Seems to be the case. But savvy buyers will be especially vigilant during these times to try to low-ball a high end property that has already reduced their asking price 1,2 or even 3 times.
Look at 1016 Fifth Avenue, a very desireable pre-war co-op building on 5th Ave between 82nd & 83rd streets. Even with Central Park right across the street units in this building are being reduced drastically in an attempt to spur buyer demand.
There are currently 4 high end units listed for sale in this building:
Apt. 5A
On the market since 1/11/2005
Reduced from $8.3M to 7.3M
Reduced $1M
Apt. 5D
On the market since 3/17/2005
Reduced 3 times from 3.55M to 2.995M
Reduced $555K
Apt. 5B
On market since 6/7/2005
Not Reduced Yet - 5.95M
Apt. 14B
On market since 9/24/2005
Not Reduced Yet - 7.8M
Now, this is a first class pre-war building that resides in a prime location in the Upper East Side. The building is literally steps from Central Park & the Metropolitan Museum of Art while the building offers a brand new fitness center, individual basement storage, and a staffed elevator. How low will it go? No one knows for sure but I can tell you that the units that have not been reduced yet are sure to be feeling the pressure from the ones that have reduced their asking prices closer to market value already.
Those in the market to buy a high end 2-4 bedroom apartment with a high priority on proximity to Central Park should keep their eyes on these units for further price cuts. In the end, you might be able to squeeze out a substantial discount for this very high quality product.
High end buyers should use this philosophy for other luxury buildings across Manhattan where the seller is in the uncomfortable position of lowering their asking price until a buyer steps forward!
Its important to note that sellers usually rely on their hired broker to advise them on how much the price should be reduced, and that the concept of price-reducing is NOT an exact science. After months on the market, the seller broker probably just wants to do a deal and might lower the property's price too aggressively to get one done.
Will you be the lucky buyer of a property reduced too much?
Add to Newsvine
