“Stale” New York Homes are Back in Play, Amid Inventory Shortage
The Real DealDecember 12, 2012A slew of luxury listings that have languished on the market for several years have been scooped up in recent months, as a shortage of high-end residential inventory has brought so-called “stale” listings back into play. In the last several months, brokers said they’ve seen the pieces finally fall into place for a range of transactions – starting at around $3 million all the way up to $25 million — that have been absorbed long after they were first listed.
Supply has been outpacing demand for some time. Chronic inventory shortages have put Manhattan sellers in control of the market, they said. Condo inventory in Manhattan is down 24.3 percent year-over-year — its lowest level since 2005 – according to third quarter market figures from Douglas Elliman.
After sitting on the market for nearly seven years and going through a litany of prices changes, the Upper East Side’s Rothschild Mansion finally traded to Leroy Schechter for $25 million in October for instance. And last month, Elliman agent Xiaolan Shang, known as Sherri, finally sold a $9 million apartment at Trump International that had been on the market on and off for a decade.
Shang, who hails from China, picked up an exclusive on the listing just three months prior to the sale; it had previously been listed by a spate of other brokers, including Elliman’s Ariel Cohen, Sotheby’s Roger Erickson and Trump’s Susan James. James eventually brought the buyer, Barbara Ullman, in the final deal. The buyer paid all cash, Shang said.
The price of that apartment had fluctuated since 2008, when Streeteasy.com first shows the apartment being put on the market. It was listed for $8.2 million in 2008 and then for $8.75 million in 2011 before being de-listed. Shang picked the listing up in April, putting it online for $8.9 million, but later raised the price according per the seller’s wishes to $9.5 million. The seller was French businessman Guy Benhamou, according to public records. Erickson apparently suggested placing the unit on the market for around $7 million a few years ago, according to an email sent by the seller to Erickson December 5.
“I still can’t believe it,” Shang said of the deal, which hit records on Monday. “People were coming up to me asking what was going on with the property and why it wouldn’t sell.”
CORE broker Michael Graves faced the same challenge when he took on two penthouse listings at adjoining buildings at 10 East 18th Street and 7 East 17th Street, owned by Elliot Joseph’s Property Markets Group. Both penthouses had been on and off the market since 2008, when the buildings were initially brought to market. The properties, both asking $3.595 million, had bounced from broker to broker before Graves secured the exclusive this summer.
“In early discussions [with the sponsor] after I received the exclusive, I was asked by the sponsor’s partners ‘Michael, how much price reduction do you need? We know these listings aren’t stale, they’re dead.’”
But Graves was confident he didn’t need a price reduction. He had recently completed deals above $2,500 per square foot nearby at 240 Park Avenue South and thought it was a change in marketing, not price, that was needed to sell the apartment. “When something has been on and off the market for three years, a change is definitely needed. But you cannot just blame the broker — market conditions and many other variables are always in play,” he said.
In addition to brightening up the photography on the marketing materials, Graves identified a unit at 7 East 17th Street on a lower floor that had similar proportions and which was already renovated to a high standard. “I convinced that owner to allow me to show his unit in tandem with the penthouses in order to illustrate what could be done,” he said. “We effectively took the imagination out of it and gave buyers something real.”
The tactic paid off; the first unit went into contract for the full asking price just a week after Graves took over, while the second found a buyer six weeks later for some $115,000 over the asking price. The deals for both units closed in September.
“This is a very small building in our portfolio,” Jospeh said. “The partners wanted to be finished with the asset. I was so beat up from having it on and off the market for years. I just wanted to sell it already. To get over ask, that’s amazing.”
Meanwhile, the Rothschild Mansion was originally listed in November 2005 for $25 million, where it sat on the market for almost two years. It was briefly taken off the market and relisted with a $35 million asking price in July 2007. The deal closed in October.