Aspirational Pricing Still Lurks in the Hearts of Sellers

May 3, 2018

“Everything that has a beginning, must have an end.” The Oracle (The Matrix).

I’m keeping this week’s Housing Notes short as I stroll around the Matrix and work on a new Boston market report for Douglas Elliman.

But I digress…

Your Local Chase Bank Branch is on Fire

So many analogies to be made.

This Week in Aspirational Pricing

Sales at the development One57 in Manhattan showed a good quarter because the developer finally chose to discount asking prices to meet buyers at current market conditions. This building is the poster-child of Manhattan super new development simply because it has been on the market for so long. In a recent Bloomberg Pursuits piece: NYC Luxury Tower One57 Has Big Quarter Thanks to Condo Discounts

While that’s a good strategy given that the developer is building another tower two blocks away with twice as many units, One57 has been on the market for seven years and still has 27% of its units left to sell.

“The quiet little secret about the super-luxury market is it’s absorbing” inventory, Barnett said.

While it is true that super-luxury sales are being absorbed, they’re not doing that on their own.

Absorption occurred as asking prices were brought down to become more connected with what actual market conditions were.


[Custom furniture at a duplex in One57. Photographer: Jeenah Moon/Bloomberg]

And I won’t go into details about the 25% list price chop – from $250 million to $188 million. While that’s a significant cut, this is a 38,000 square foot house on an acre.

Appraiserville

Since these Housing Notes are a “lite” version this week, make sure you read all the great appraiser-related links down below.

ZILLOW: Entry-Level Homes with ‘Farmhouse Sinks,’ ‘Wainscoting,’ or ‘Exposed Beams’ Sell for Nearly 30 Percent More than Expected

No they don’t. This is what we call “junk statistics.” This press release suggests that when someone installs a “farmhouse sink” in a $400,000 home, the house becomes worth $520,000? Nope.

“Chip and Joanna Gaines’ farmhouse-inspired design trends command highest sale premiums among entry-level homes, according to an analysis from RealEstate.com”

Brilliant Idea #1

If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, or you think you already subscribed, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them because:

– They’ll make cup cakes like Joanna;
– You’ll take a price cut;
– And I’ll bring the kitchen sink.

Brilliant Idea #2

You’re obviously full of insights and ideas as a reader of Housing Notes. I appreciate every email I receive and it helps me craft the next week’s Housing Note.

See you next week.

Jonathan Miller, CRP, CRE
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog
@jonathanmiller

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