Jones Lang LaSalle


The Tricks of the Trade in Coping With Slower Sales
By ANNA BAHNEY
Published: December 11, 2005

WAITING for an apartment to sell is surprisingly vexing, and the wait is growing longer. In Manhattan, properties are taking a month longer to sell than they did a year ago at this time, 133 days on average, according to third-quarter data from the appraisal and consulting firm Miller Samuel. As agonizingly long as that may sound to a seller, it is still within the norm for the last 20 years, which was 120 to 150 days.

Anrew Phillips and Amelia S. Gewirtz found a different approach to selling.

Dottie Herman, chief executive of Prudential Douglas Elliman, said that for buyers and sellers, the current market feels like being on an expressway going 100 miles an hour and suddenly dropping to the speed limit when a state trooper appears. "Now the speed limit feels like you're not even driving, it feels so slow," she said. "But it is a healthy pace."

Still, while brokers have begun to bring back the time-honored tactic of offering incentives and gifts to increase interest in their sluggish listings, and restless owners are scrambling to have their underachieving apartments staged for sale, the most critical indicator of time on the market is the most obvious: the price.

An apartment needs a price adjustment, according to Jonathan J. Miller, president of Miller Samuel, if it has been on the market at its current price longer than the average selling time. The current problem in the market, Mr. Miller said, is a spread between list price and actual value.

"When you have market conditions that change, quite often there is a delayed reaction time for sellers, of two to three quarters, after the actual change," he said.

"If things stay subdued for the next couple of quarters, you're going to see sellers getting the message next spring or summer."

The wild card, in this scenario, is the annual Wall Street bonus money. Typically infused into the real estate economy during the first and second quarter, this money may reduce the average time on the market and increase prices because it will create greater demand at the beginning of next year.

Sometimes price is only a part of a larger collection of issues - ranging from furnishing an empty apartment to firing an ineffective broker.

Christine Graifman realized a month and a half into a three-month exclusive agreement with her agent that her two-bedroom co-op was getting overlooked, in part because of a less-than-impressive appearance on the brokerage firm's Web site.

"There was only one photograph of the exterior of the building and an outdated floor plan," Ms. Graifman said, and it vaguely referred to a Carnegie Hill location when it could have trumpeted its location on Museum Mile.

"The apartment was empty and I felt like staging would be helpful," she said. "I suggested that to the broker, but he was against it, saying it would cost too much and take too long."

Her agent's solution to the lack of traffic and a single - very low - offer was to cut the price. Again and again.

It went on the market in October 2004 at $925,000 and was cut to $915,000 before landing at $899,000. After three months she did not renew the agent's contract.

When Ms. Graifman had Andrew Phillips and Amelia S. Gewirtz, both senior vice presidents and agents at Halstead Property, look at it, they thought it was not just a good apartment but a great apartment. It did not need a price cut, they decided, but some furniture, marketing and a price increase.

Three weeks and $3,000 later the empty apartment was filled with rental furniture as well as accents like coffee-table books and candlesticks pulled from the agents' own homes. They put the apartment back on the market in March for $1.05 million and received three offers the first week, including the one the owner accepted, an all-cash bid at the asking price.

For sellers who feel that their apartment is accurately priced, Mr. Phillips suggested thinking like a buyer. By going to look at other apartments in the same area and price range, owners can gauge how their apartment measures up.

Another thing to remember is to pick the most suitable season for the apartment.

"If you're not crazed to sell something with great outdoor space you might as well wait until the spring and put it on in March or April," Mr. Phillips said. "You might sell it before that, but not at full value."

Ground-floor apartments that are dark, he said, should be put on the market in the warmer months when the sun is higher and comes in directly, while an apartment with a partial river view should go on in the winter, when there are no leaves on the trees.

And in general, Mr. Phillips said, during the summer, "if it is over $1 million, those buyers tend to be thinking about the beach or the mountains, not the city."

Many sellers, restless and wanting to feel as if they are doing something, hire a stylist to stage their apartment for sale.

Ellen Reilly, 70, an artist, has had only fair to middling interest in her two-bedroom Upper East Side apartment since putting it on the market in July. Although her agent, Katherine Slattery, a senior vice president with the Corcoran Group, did not think the apartment needed staging, she put Ms. Reilly, who wanted to be proactive, in touch with Barbara Brock, a home stager based in Manhattan.

Ms. Reilly was advised by Ms. Brock to remove several paintings that were at eye level to create more blank wall space. "We just left three little pictures over the sofa," Ms. Reilly said. A table and little pine sideboard in the bedroom were removed, creating more space, and 90 percent of the books were put into storage.

"It looks clean and fresh and welcoming," Ms. Reilly said of her staged home. "It looks livable but without my personality."

Whether this will help her find a buyer (or simply helps her to feel more involved) is unclear, but the first showings after it was staged have been positive, Ms. Slattery said. One couple expressed relief at the serenity of the space. "I hadn't had that happen before," Ms. Slattery said.

Brokers, meanwhile, have their hands full getting clients and other agents to view properties. Last Wednesday, Dolly Lenz, an executive vice president at Prudential Douglas Elliman, and her colleague, Sandy Papale, a senior vice president, held a "Women in Showbiz" panel discussion for Variety and New York Women in Film and Television at an $18.5 million town house at 37 Beekman Place. The month before, Ms. Lenz also had an event for Yves Saint Laurent and Bergdorf Goodman at the penthouse of the Trump Park Avenue building, which she has listed for $31.5 million.

Ms. Herman said that these events are a way to attract a group of buyers who may not know they are in the market for a high end property.

"These are people who have something and stumble upon a property and realize that they love it," she said. "They do not have a need for it, they want the lifestyle."

Even brokers for new construction are providing incentives. Rob Gross, a senior vice president at Prudential Douglas Elliman, recently offered a Vespa motor scooter to the buyers and their agents for the last seven units at a luxury condominium he is marketing on Attorney Street on the Lower East Side. "Brokers and developers are spending more money than before to accelerate the process," he said.

Sometimes, the inducements brokers use need to be addressed to a power greater than clients or even other brokers.

When a beautifully renovated apartment at 80th Street and Madison Avenue lingered on the market earlier this year, Katie Rosenberg, an agent with Warburg Realty, decided to try the St. Joseph approach.

This custom involves burying a statue of the saint to hasten the sale. Ms. Rosenberg recalled phoning her client and telling her, "I know we're both Jewish, but I'm taking St. Joseph in there."

The Manhattan version of this custom, Ms. Rosenberg said, requires leaving a statue of the saint in its plastic wrapping and wedging it into a house plant.

A couple of days later, however, the plant was all but dead. "I thought, 'Oh no! St. Joseph has done his work on the plant,' " Ms. Rosenberg said. "He's gotten rid of the plant, not the apartment."

She watered it, and the plant came back to life. The next day the apartment sold.

"I think owners, unless they have no sense of humor, are open to it," Ms. Rosenberg said, adding, "I've got another place in mind to take him next."