Last Week's Biggest Sales
1. PARK SLOPE $8,450,000 17 Prospect Park West GMAP (left) As covered last week, the 5,200-square-foot mansion owned by Jennifer Connelly and Paul Bettany sold for a hair below its asking price, $8.5 mil. It hit the market in late January. Entered into contract on 6/1/08; closed on 11/17/08; deed recorded on 12/10/08. 2. PARK…
1. PARK SLOPE $8,450,000
17 Prospect Park West GMAP (left)
As covered last week, the 5,200-square-foot mansion owned by Jennifer Connelly and Paul Bettany sold for a hair below its asking price, $8.5 mil. It hit the market in late January. Entered into contract on 6/1/08; closed on 11/17/08; deed recorded on 12/10/08.
2. PARK SLOPE $1,800,000
547 9th Street GMAP (right)
Also old news: This three-story limestone house went for $200,000 more than its original asking price. Entered into contract on 5/8/08; closed on 8/11/08; deed recorded on 12/8/08.
3. WINDSOR TERRACE $1,800,000 $1,490,000
272 Windsor Place GMAP
When it was an Open House Pick in late February, the two-family house’s sellers were looking for $1,595,000. Entered into contract on 6/11/08; closed on 11/26/08; deed recorded on 12/9/08.
4. MIDWOOD $1,362,500
2401 Avenue O GMAP
Detached, 2,971-sf single-family house on a 4,500-sf lot, according to Property Shark. Entered into contract on 6/23/08; closed on 11/25/08; deed recorded on 12/12/08.
5. BATH BEACH $1,310,000
115 Bay 29th Street GMAP
DOB records indicate that this is a new construction, three-family house. Entered into contract on 9/19/08; closed on 11/24/08; deed recorded on 12/12/08.
Sebb – every time I house I looked at gets a price cut, I save money. This is what is happening more and more, and will accelerate next year.
Miss Muffett : Here sweety this is for you.
http://www.gamblersanonymous.org/
Miss Muffett : every time someone sells a house and gets asking or more than you loose money. How does it feel? you are losing everyday but that’s what happens to gamblers.
So “I disagree” – your theory that these prices reflect the current state of the market is depdnent on buyers and sellers behaving rationally.
I think I see a flaw.
Ledbury is spot on. Walking away is very difficult. As someone in that price range, I can tell you that the idea of losing a 10% deposit would be a major problem to me and indeed, would have eaten a very big chunk out of our budget to buy something else, even at a 20% discount. Precisely since we intend to stay for life, had we gone into contract pre-meltdown, we would have just sucked it up and moved on. But I would have been very bummed to see values go down another 20%+ after buying (and some say they could go down as much as 50%). Now that it’s clear prices are heading south, and that the economy is so scary, I’ve recalibrated my budget and tolerance for ridiculous prices.
Most people won’t just walk away from their deposit even if in a perfectly efficient marketit makes sense for them to do so economically. Having to find a new place, the inevitable emotional attachment, and good old fashioned honor can all go a long way in overwhelming economic benefit. In addition, when you are dealing in the $1 – $2 million range, it is entirely possible that buyers really can’t afford to lose their entire deposit and still have enough to comfotably put down another 10% deposit even at a 20% discount.
the deposit plays some role, of course, and it does give the seller some power. but if a rational buyer thinks the price for a substitute home (all in) will drop by more than 10% within the timeframe he wants to buy, he will walk away if he doesn’t get a discount that makes him whole. a rational seller will agree to renegotiate if she also believes that the market will decline more than 10% within the timeframe she wants or needs to sell, because she’s out money even with the deposit in her pocket. so these prices are reflective, at least within 10%.
I should add that I only started to see real price cuts on some properties (probably with more serious sellers) in the last few weeks but the vast majority of properties are still wildly overpriced and thus not moving. Suburbandude is right – it’s very hard to renegotiate after you’ve signed a contrct so main recourse for buyers who went into contract pre-meltdown and got cold feet is to back out and lose deposit. Some are starting to do that (figuring they will do better waiting out price declines) but for many people, that’s too bitter a pill to swallow. But yes, contracts signed after Nov 1 will be a much better barometer than things that went into contract pre-meltdown. Just look at how drastically and suddenly other assets have lost value – who knows what’s going to happen to NY RE?
“I disagree” – these sales DO NOT reflect current market conditions. The sellers could just have said no to any renegotiation. The buyers could walk away, but lose the 10% deposit. Does not happen too often.
I want to see contracts that were signed after November 1 to get a true reading of the market. Then we will know if the market is slightly declining or tumbling.