Selling Lower During This Boom Market

Amid all the extra activity in our Spring real estate market, there seems to be a prevailing feeling that prices are rocketing up.

We've seen it happen on some houses. And, heck, in reporting it all as a trend, we here might be part of creating a narrative about increasing prices. (There was also this recent Easy Reader cover story, which quotes Dave extensively.)

But let's just say, it's not always so.

Prices won't go to the moon.

There's a maximum fair price for any house. And it's not always $10 million-plus.

Let's take one example, new construction in the Tree Section at 757 35th (5br/7ba, 4000 sqft.).

The property first listed in June 2024 at $5.499M.

Unsold after 4 months, it was re-listed at $5.199M in October.

It went pending on the MLS on Jan. 7, the very day that fires broke out in Pacific Palisades and Altadena, but then the property fell out of escrow. As the listing was restored to "active" status, the price went up $200K to $5.399M.

As we said at the time: "For a listing that has been on the market 7 months, and has just endured the minor trauma of falling out of escrow, you would not expect to see a price increase."

But surely they were jacking up the price because the market seemed to be full of opportunity – scarce listings, needy buyers, deep pockets.

Just 10 days later, 757 35th had another deal.

Now it has closed about $400K lower, at exactly $5.000M.

That was not a crazy overbid. It was a 7% discount.

Even in this market, the home found its level, well below asking.

Then let's take a quick look at Manhattan Village.

The rarest, but most treasured, listings are the single-family "estate homes" in the Village.

After years without many such listings, there's been a little run of them recently, including the subject here.

28 Chatham (3br/3ba, 3306 sqft.) came out Jan. 20.

It's neither original (80s) nor modern, with updates going back perhaps a couple of decades. Though it's on the very block that hosts the pool for the estate homes, it's actually got its own backyard pool.

With 5 of the last 6 estate homes near 3000 sqft. in size getting $3.000M or more – with a high of $3.270M – this one priced quite a bit higher.

Out of the gates, 28 Chatham sought $3.649M.

The all-time record for any SFR on the market in the Village was $3.500M, for 10 Westport nearly 4 full years ago.

The home at 10 Westport had been rebuilt virtually from the ground up, and looked like new construction.

Well, in today's market, 28 Chatham has beaten the champ.

In what might be the quietest claim on a title ever, 28 Chatham just closed for $3.592M, $57K below asking, despite the presence of multiple offers.

The fact that Chatham closed under asking isn't quite as eye-opening as 757 35th going $400K under, but it's something.

In both cases, sellers tried to price to a high-flying market, making assumptions about where prices were going to go, and what buyers' attitudes were going to be – but they ended up taking less.

One more listing just closed and took less, also. 

That's new construction at 1701 5th (5br/6ba, 3274 sqft.), closing for $3.750M, after a start at $3.950M.

Now, that listing technically began in November (perhaps prior to completion), so it was priced according to how the sellers saw the market last year. They never tried to raise the price to meet this year's busy market.

But the house did sell 10 days after the fires hit, and still went down on price when it closed.

One more listing we took note of in East Manhattan just a week after the fires, 1136 5th (5br/5ba, 4400 sqft.), is temporarily on a hiatus from the market. You might recall that listing's early pricing journey:

• Asking $4.900M in a "coming soon" status

• Price increased to $5.600M as it came active

• Price cut to $5.099M after 10 days

Obviously, they reversed course on the big markup pretty quickly, but it's hard to judge anything until an actual buyer makes a deal with an actual seller to establish value. 

Is the market overheating?

Is it calming?

Was the impact of the fires hype coming out of just a few sales?

Are we entering a new pricing paradigm?

Now, there's data for you to argue either way.

As fodder for the argument, one way or the other, none of the properties referenced here was in the Sand Section or Hill Section, or in prime areas at all, except for 28 Chatham within the context of the Village.

See, it can be a lively discussion!

Let's see how the rest of Spring unfolds.