UWS price-choppers hope $999K is the charm.

In recent weeks, I've started to notice genuinely attractive properties (mostly 2BRs) dropping below the $1MM mark. The $999K price point draws sellers for at least three reasons: 1) Sales under $1MM are not subject to the "Mansion Tax"; 2) $1MM may be a psychological barrier for some buyers; 3) Search engines may bring a wider pool of buyers to listings under $1MM. (By the way, I think #3 is a... [more]

In recent weeks, I've started to notice genuinely attractive properties (mostly 2BRs) dropping below the $1MM mark. The $999K price point draws sellers for at least three reasons: 1) Sales under $1MM are not subject to the "Mansion Tax"; 2) $1MM may be a psychological barrier for some buyers; 3) Search engines may bring a wider pool of buyers to listings under $1MM. (By the way, I think #3 is a red herring. The drop-down lists in most real eatate search engines are populated with "round" numbers, and all searches are inclusive of the search parameters. So an asking price of $1MM actually generates more hits, because $999,999 will drop out if the buyer specifies $1MM as a minimum.) Anyway, I decided to check how big the bulge at $999K is. On the Upper West Side, at least, it's pretty big: $940,000 - $944,999: ... 1 $945,000 - $949,999: .. 13 $950,000 - $954,999: ... 7 $955,000 - $959,999: ... 3 $960,000 - $964,999: ... 2 $965,000 - $969,999: ... 5 $970,000 - $974,999: ... 0 $975,000 - $979,999: .. 15 $980,000 - $984,999: ... 2 $985,000 - $989,999: .. 11 $990,000 - $994,999: ... 3 $995,000 - $999,999: .. 72 $1,000,000-$1,004,999: 2 $1,005,000-$1,009,999: 0 $1,010,000-$1,014,999: 0 $1,015,000-$1,019,999: 0 $1,020,000-$1,024,999: 0 $1,025,000-$1,029,999: 3 $1,030,000-$1,034,999: 0 $1,035,000-$1,039,999: 2 $1,040,000-$1,044,999: 0 $1,045,000-$1,049,999: 9 $1,050,000-$1,054,999: 9 $1,055,000-$1,059,999: 1 TOTAL: ................ 160 Equally interesting is how those asking prices got to where the are. Among the 72 listings in the "bulge", 35 (48.5%) have undergone chops of at least 5% at some time. By contrast, only 18 of 88 other listings (20.4%) have seen similar chops. Of the listings over $1MM, chops have been even less prevalent: 4 of 26 listings (15.4%). $999K is an inherently attractive price point, but it seems to have special allure for sellers who have reduced their prices to draw scarce, value-conscious buyers. Ironically, the popularity of this strategy may be rendering the price cuts futile; with the price point becoming so crowded, an ask of $999K is no longer a competitive differentiator. To compete effectively (unless the buyer pool somehow expands), these sellers will probably have to cut further or accept bids well below ask. If the 2BR market doesn't find support at the mansion-tax threshold, the next firewall might be at the conforming-mortgage cutoff. [less]