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Why is it so important to price correctly?

WHY is it so important to price an apartment correctly in today's or any other market.

In the 1st Q of 2010, NYC is seeing an increase in property transactions than the same time, one year ago.

The absorption rate (the amount of time it would take to sell the entire inventory of apartments) was 19 months in December of '09. Now 1st Q '10- it has reduced to 9 months.

The typical (Good absorption rate) is between 6-9 months, so we have seen inventory drop.

Every year people Ring in the new year and around January 3rd, buyers wake up and say, OMG- I need to buy a new apartment and sellers say, we need to up size or downsize. This year was no different.

Our phones have been ringing off the hook and the market is moving albeit sideways.

Some new pieces of the puzzle have been added into every transaction, mainly from the banks. The banks scrutinize each individual building more and require tons more paperwork just to get to "closing."

The biggest issue right now is appraisals. Many apartments, town homes and houses are coming in at lower appraised values (compared to the selling price)and that can cause problems in a transaction.

Some buyers walk away, because of the lower appraised value and some renegotiate the price down to a lower level.

All this being said, properly pricing  of your asset is extremely important, even if supply is down and demand is up.

You don't want to sell an apartment at X and then the appraisal comes in at X minus 10%. That could cause you time, money and stress. And as a person that has been in the front line of many of these types of situations, no one wants this to happen, except maybe the buyer.

If you have any questions or comments, please email me at:

Pzweben@elliman.com

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Paul Zweben, Licensed Associate RE Broker
paul.zweben@compass.com
Carolyn Zweben, Licensed Associate RE Broker
carolyn.zweben@compass.com
110 5th Ave, 2nd Floor
New York, NY 10003

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The Zweben Team is a team of licensed real estate salespersons affiliated with Compass. Compass is a licensed real estate broker and abides by Equal Housing Opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description. All measurements and square footages are approximate. This is not intended to solicit property already listed. Nothing herein shall be construed as legal, accounting or other professional advice outside the realm of real estate brokerage. New York State Fair Housing. New York Real Estate Standard Operating Procedures.

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