Front lines: recent downtown sale

Ali, just curious if this was a foreign buyer, and also how many of those who viewed the aparment were. I'm guessing (with no data to back it up whatsoever) that Soho attracts more foreign buyers, even in this current market.

I'm curious - you said it was listed at 2 prices? What was the other ask price? The 1.9M offers - did they come in at the earlier price (which was lower, right?) or the higher price? Or both?

SoHo attracts so many foreign buyers that I started to learn French to be a better realtor down there. (I already have a smattering of Spanish). However, final purchaser was an American.

A lot of the serious interest that we saw, both domestic and international, was families who wanted to buy a place that their kids could live in for a few years, that would then function as a pied-a-terre or an investment property. Part of this was our specific location --- south SoHo near Canal seems like a neighborhood with a long-term gentrification story.

But it also explains who is buying in this market if "ordinary" rich people -- bankers married to lawyers -- aren't. The new buyers are multigenerational, so they're really buying on the basis of three or four jobs instead of one or two. A lot of buyers like this also bypassed my listing in favor of something bigger -- it happened many times that Mom and Dad like the $2 mm one in SoHo a lot, but the $3 mm one in Tribeca better.

ali r.
{downtown broker}

I had this experience too on a property I was selling recently (readers: I got my fingers burned big time). The only big $ left in town seems to be family wealth.

tech-guy

listed at $1.995 in the spring, which generated a great deal of interest and an instant bidding war (which was the plan) where the winner did not go to contract (which was not the plan) and then the loser never freed up cash.

(Both parties were parents buying for kids -- who themselves had high-powered jobs with six-figure incomes).

We turned down, I think, $1.8M at that point, explaining that our bidding war info led us to believe that was a ludicrously low price.

Then we raised the price in the summer, to $2.195M, and upon seller instructions, I swatted away $1.9M -- generally from potential buyers with $1MM incomes and no parental equity -- with great regularity.

ali r.
{downtown broker}

Did you swat away the $1.9M cash offers because the sellers had gotten it into their head that they wanted a "2" in front of the purchase price? How much financing (if any) did the eventual buyers require? Were the sellers able to sell at a profit?

Thanks for the info, and congrats on a great sale in a very tough market! I hear inventory moved is about 3, so your listing alone raises the median quite a bit ;)

Ali,
What you are saying resonates with my thinking: that there are many more "investment" properties in NYC that the statistics say. If mom and dad let little Johnny stay in the investment property, it's still a investment property. I just talked to a ex-hedge fund commodity trader today who's unemployed. No one predicted that prices that took 4 years to clim would drop in 6 months. Hence, the ex in his title. When you wipe out those types of bonuses, and the parents buying for investment, it's going to be hard to justify soho and tribeca valuations, IMHO.

ali, apologies for being a bit crude, but your sellers had enormous balls. Holding out in this market for $175k over a 9 month period is gutsy. There must have been some sleepless night for you on this one. Thanks for sharing.

amity, yes (remember the bidding war had given them some numbers to go by); none as it was a cash deal, and yes.

The other thing I'd mention, especially if FSBOs are watching this thread, is that it's not like you price in a void, walk away for nine months, and then come back and have a new piece of market data. You're constantly testing your assumptions by watching the behavior of buyers on your property and other properties -- there was a bidding war on a Prince Street property that helped convince us we were right.

Positive carry -- I hear you that the valuations should drop if the money goes away. All I am doing is providing a story that not all the money has gone away YET. I think 4Q volume numbers will show us that the tide is receding, and fast, but that might take years to be reflected in prices -- or the music might just stop and nothing will sell for awhile and then the players will come back.

And JuiceMan, that's the exact phrase an old-school Corcoran broker used to me when I raised the price on this thing. I believe the female version is "enormous earrings."

But yeah, I'm gonna sleep tonight.

ali r.
{downtown broker}

p.s. tech guy :>

ali r.
{downtown broker}

Ali,
I hear you, and I applaud you for closing something in this market. I just sold a nice chunk of change of a money market for a real estate broker client of mine because she hasn't closed anything in a while and needs to pay some bills. Your pain is my pain.

"Other segments of the market that are more cookie-cutter might be seeing double-digit softening, but we are not yet seeing it for "special" properties. This parallels the story of that UWS Classic Six that is on a different thread."

Except didn't that thread note a return to 2005 prices?

I remember when New York was the exception. Then Manhattan was the exception. Then prime manhattan. Then certain neighborhoods. Then certain blocks. Now we're actually at "the market is down, but not for certain apartments" rationalization legel.

Funny.

What I'm saying 10022, is that there's a little bit of an art to pricing. People always ask what listing brokers do to earn their money, and I'm throwing in an example where the difference between an oft-offered price and the final price was 9%.

I do think the market is marginally down -- I think the 4% decline psf is the way to look at that -- but I got an uptick. You'll see it in acris in a few weeks.

Why did I get a good price? Partly because of the block I sold on. There's no question but that One York and SoHo Mews, even though they might not be sold out, are helping gentrify that southern end of SoHo, and it's a nicer area than it was three-four years ago.

Also, I'm good.

That said, someone who is better -- Jacky Teplitzky (the top broker at Elliman and someone I really admire) was quoted in the Post yesterday as saying that the correct pricing is somewhere in the 2005-2006 range.

So I'm not going to disagree with your statement as a general thesis, just going to point out that there are exceptions, and I know because I just closed one.

ali r.
{downtown broker}

I not trying to be a jerk, but I'm reminded of the phrase "even a broken clock is right twice a day".

ali, thanks, you've confirmed something I sensed when I shopped coops and condos in prime Manhattan in 2002 - that at the studio/one-bed level a common scenario is mom dad helping out a 20ish daughter/son have a place to live in a good neighborhood while they either finish education/training or work at starting jobs that don't pay so well, but as an investment of the parents, expecting to sell for a profit when the son/daughter is on their own feet - I had not expected the 2-brm apts would be similar

Ali, you add class and dignity to this forum, which sometimes attracts confrontational individuals with very skewed views.

This particular thread you started is very informative and serves as a reminder that properties ARE in fact moving, though slowly. Let's face it, many participants here actually seem to believe that offers 25% to 50% (!) below asking would actually be accepted, given the market trend. They will believe whatever they want to believe, I suppose, and I find anecdotes such as the one you shared with us here to be much more reflective of how things are going in real life. Thanks, and congratulations on the sale!

nyc10022, do you really have to bring your noise to every thread?

Ali, thank you for sharing. I saw a similar transaction occur at the beginning of the year, and you are certainly to be congratulated for being able to close this in November 2008. I guess no one can really know how many more of these can take place in 2009-2010. Do you mind my asking when the sellers originally purchased their property, and was their profit significant?

The parents of rich kids have propped up real estate in this town for 60 years. Probably longer. Foreigners schmoreigners.

Hey positivecarry, are you the same Postive Carry, the name of the boat of the disgraced money manager/hedge fund mananger of United Capital, John Devaney? he through some great parties in FL on that boat.

> nyc10022, do you really have to bring your noise to every thread?

Completely ironic, coming from ccdevi

> This particular thread you started is very informative and serves as a reminder that properties ARE
> in fact moving, though slowly.

75% less than just a few months ago. Tough to say that "XXX is working" in this market when nothing really is. Three quarters is a HUGE drop.

> That said, someone who is better -- Jacky Teplitzky (the top broker at Elliman and someone I really
> admire) was quoted in the Post yesterday as saying that the correct pricing is somewhere in the 2005-
> 2006 range.

Going by the accuracy of predictions of brokers over the last 2 years, that means 2001-3 prices...

Actually, I think Teplitzky actually mentioned earlier prices, but basically said it was anyone's guess as to where a given price should be (but I don't know if that was the Post, I thought I read it in TRD). Which I find pretty amazing. When Dolly and Dottie have the honesty to say something similar, we'll all be up in flames.

Seller profit was probably low double-digits gross -- I don't know what their transaction costs were.

However, they did live in the unit for a while when rents were high, so they also got a cheap year in SoHo out of it.

ali r.

{downtown broker}

bump

ali r.
{downtown broker}

Apt_Boy,
Nope. I'm just a fiscal conservative. That guy has lost a TON of money. You could probaly pick that boat up for a song, just like his plane and homes...for those that don't know, google news him and read about how NOT to run a business.

ali:

I believe the correct term is 'big ovaries!'

Ali, thanks for this informative post. Question: the winner of the first bidding war in the spring, do you konw why the deal fell through? Did the buyer change his/her mind or was it a matter of financing?

> bump
> ali r.
> {downtown broker}

You going to do this daily?

10022, no, I won't bump it daily, because I assume uptowners like yourself will get bored.

However, since uptown gal has a question . . .the prospective buyers' lawyer killed it, for what we thought were stupid reasons. One of her objections was that when you went on the DoB site (which is now computerized), you could see that there was a stop-work order on the building. Despite our assurances that 1) it wasn't relevant (I believe I argued that for a 2008 building which had been commpleted for years, a 2005 stop-work was the equivalent of an "outstanding library fine") and 2) that sponsor would fix it, she urged her clients to walk.

It didn't help that they were working with more than one buyer's broker -- as a result, they didn't take the assurances of "their" broker that it would be okay to close seriously, they though he was just trying to make money.

Sponsor subsequently did get the stop-work removed (which was a huge hassle, as DoB is a mess and of course THEY couldn't find a file proving why they'd issued it) so it wasn't a problem for subsequent buyers.

Also, point of etiquette, buyer's lawyer never returned our file. Condo offering plans are 300 pages long, and it takes time and effort for someone in my office to xerox them, so it's nice to return them to seller if you don't need them.

ali r.
{downtown broker}

Ps: Malraux, LOL -- and I would be interested in the opinions of any attorneys whether they agree with me or buyer's lawyer -- obviously I have a very biased POV about this.

ali r.
{downtown broker}

"You going to do this daily?"

Could ask the same question as you post articles daily about Wall St. job losses. nyc10022, a good story really cramps your style / agenda doesn't it?

This is a nice story, especially if the buyers are happy and comfortable with their purchase. Congrats, Ali.

Interesting story, Ali. Thx for sharing. I've read so much about how useful buyer's brokers can be, in this case the broker contributed to killing the deal.

"Could ask the same question as you post articles daily about Wall St. job losses. nyc10022, a good story really cramps your style / agenda doesn't it?

No.... because I don't bump 'em. If people stop reading 'em and commenting, they die.

bump this story hourly if you want... good luck.

"No.... because I don't bump 'em. If people stop reading 'em and commenting, they die."

and then you post another story the next day that says the same thing. What's the difference?

bump, because nyc10022 likes this thread so much.

> and then you post another story the next day that says the same thing. What's the difference?

Just because there is more bad news doesn't make it the "same story". No need to be bitter.

> and then you post another story the next day that says the same thing. What's the difference?

Just because there is more bad news doesn't make it the "same story". No need to be bitter.

double bump.

(this is fun)