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Yesterday, I got a call from a seller who is thinking of moving his listing to our firm. His apartment has been on the market since August with a huge firm and he has seen little activity or attention. He is contemplating pulling his unit off the market until January or February. He would be joining many other sellers who tell us they are waiting until early 2009 to list. All are hoping to get past the great market meltdown and meet more favorable conditions. The question is: should they list now or wait?
No one knows.
In the early 80s, I had an apartment for sale on Park Avenue South. For six months hardly a person showed up to look. Park Avenue South in those days was not a place where people lived and at times there seemed to be more homeless people on the street than co-op owners. It was also a period when mortgage rates were around 13%. Six months went by and the seller was very frustrated. But then one day, three people showed up and all made offers. We ended up in a bidding war and the apartment went over the asking price of $125,000. Those were the days when a $1 million dollar sale made the newspapers.
Timing is a weird thing often resulting in the unforeseen and unimaginable. I remember at the end of August 2001, a very nice investment banker called me. He wanted to list his 7-room apartment at 70th and Third Avenue. He was moving to Bedford and was leaving his firm to join a hedge fund. I told him to wait two weeks until after Labor Day. Right after Labor Day, I showed his unit and got an offer which he promptly turned down. A few days later was 9/11. In the end, it took 8 months to get back to the price of the first offer. So I keep reminding myself that the advice I gave to wait until after Labor Day probably cost him money.
Fast forward to June 2005: I was appointed the exclusive broker for a tower 9-room apartment needing work at 300 Central Park West in a building where I have set many records. We went on the market at $7,195,000 and there was a lot of interest right off the bat which prompted the seller-- against advice--to jack up the asking price to $7,690,000. From there, I spent the next two years trying to get the apartment sold. Finally, in March 2007, just as the nationwide housing market was starting to slip, the seller agreed to lower the price to $6,995,000. At this point, most brokers would consider the apartment completely shop worn. But guess what? Within a month of dropping the price we had two buyers in a bidding war and ended up getting $6,995,000.
Of course, I can tell real estate stories forever. One thing I have learned is that you cannot predict when the buyer is going to walk in the door. Generally, it is true that things get very slow around the holidays and the dog days of summer. But Thanksgiving thru Christmas 2007, we were unusually busy with people from abroad because of favorable exchange rates. We have done deals at some of the oddest times including Christmas Eve. We just don't know who is going to come in or why. We know people have less money now which favors condos over co-ops. There also is very little inventory and many people are waiting until after January for a sign to sell.
One thing I have learned is that it's very hard to time the market particularly in a period like this. Betting that the market will stabilize and improve might be a folly. The market can go up, down, or stay the same and right now no one is betting up.
We'd all like to think that real estate is a science but it is not and sometimes there is just a big element of luck involved. So because the global financial markets are in absolute chaos and everything seems to be crumbling, we cannot predict who is left. On the other hand, you never know who is going to come out of the woodwork and want to park their winnings in an oasis called home which is a better refuge than the Dow. A deal can turn on a phone call.
I'm from the carpe-diem-he-who-hesitates-is-lost school. No guts. No glory. Be realistic. Price your home correctly and don't try to time the market. True precision needs to be attended to the price; the market forces will work and you will be able to sell.
Private Wealth Real Estate Services
Chief of Research
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