Going… Going… Still Here! Why Some Luxury Homes Languish on the Market for Eons

Listed for $8 million in 2006, penthouse A/B at 129 West 20th Street in Chelsea is stunning, but more than six years later, it still has no takers, despite dropping its asking price to $6.45 million. “The owner really spent a lot of money in the materials and the design,” said one broker. “But in real estate, your dream penthouse is not someone else’s dream penthouse.”
This ten-room spread at the Dakota debuted in October 2006, asking $19.5 million (it now wants $14.5 million). The wacky styles and metallic paint beloved by the owner, advertising bigwig Ilon Specht, may not be everyone's speed, nor is the $8,598 a month in common charges, but come on---it's the Dakota!
To enjoy the penthouse at 425 East 63rd Street, listed since February 2007, the new owner will need to combine two separate units. As for why no one seems willing to plunk down $5.6 million for the privilege in this real estate-obsessed city, it may have something to do with the bear skin rugs, the marble and gold bathrooms or the ventriloquist dummy on the couch.
The townhouse at 120 East 70th Street was asking $33 million when it came on the market in August 2007. Time has not dimmed its ambition. This spring, the price shot up from the reduced ask of $25 million, to an all-time high of $35 million. "It's a beautiful house, but it's overpriced," said one broker. Another agreed, adding that he'd never even seen a 20-foot wide townhouse ask for so much. Certainly, he'd never seen one get it.
The 12th-floor of 810 Fifth Avenue once belonged to the late vice president Nelson Rockefeller, who knocked down the wall of the building next door to expand his spread after divorcing his first wife and yielding the two upper floors of their triplex to her. Listed since February 2008, this co-op is only half of the legendary spread and with just two bedrooms, it seems on the small side for a $27.5 million price tag.
Apartment No. 9/10A at 1 Beekman Place has dropped its price more than a few times since it debuted at $13.9 million in March 2008. Now listed at $10.5 million, the price is certainly more palatable and the apartment appears to have been renovated recently. Could it be that Beekman Place is not the draw it once was?
No. 3B at 129 East 69th Street ticks all the boxes: pre-war, nine-room, asking a not outrageous $5.95 million. We'd say its biggest sin was probably hitting the market at $6.9 million in November 2008---roughly two months after the fall of Lehman.
We can't say that we're shocked that No. 24A, a four-bedroom in Hell's Kitchen's Atelier, can't get its $4.5 million asking price. The unit was purchased for $1.17 back in 2008 and relisted four months later for $2.7 million. Its price has continued to rise ever since as the listing languishes year after year.
Besides the fact that the listing photos seem underwhelming alongside the soaring descriptions and features like 100-feet of Park Avenue frontage and 12 rooms, it's hard to say why no one wants duplex 8AB at 755 Park Avenue. Maybe it's just asking too much? Listed in May 2009, it has since dropped its price from $18 million to $16 million.

One broker angrily told us that he’s missed out on more than a few listings by being honest with sellers rather than peddling a fantasy number. Brokers who do that “screw up the market,” he complained. “They agree to overprice a property because it’s what the sellers want to hear.”

Moreover, once a listing becomes stale, buyers start to think that there must be something wrong with it. Then, even if and when the seller drops the price, buyers can be leery.

“It’s like seeing a piece of jewelry displayed at a store,” said A. Laurance Kaiser IV of high-end brokerage Key-Ventures Realty. “If it’s been in the window for six years, unless it’s the most exquisite thing that no one can afford, you think there’s got to be something wrong with it.”

More expensive properties do take longer to sell because the pool of potential buyers is much, much smaller for trophy penthouses and sprawling $40 million townhouses. A property between $10 million and $20 million spent on average 225 days on the market this quarter; for properties over $20 million, that number falls to 212 days, according to Streeteasy data. But that’s still shy of a full year.

Not all sellers are greedy, though—some of them are just so infatuated with their homes that they can’t see them objectively. “Psychologically, the problem is that everyone loves their own house the most,” said Kirk Henckels, the executive vice president at Stribling.

Expensive, custom renovations are particularly tricky. One broker spoke of an owner who’d poured millions into a meticulous renovation and felt like he absolutely had to get the money back when he decided to sell. The architect and designer encouraged him to stand firm: after all, what did it say about their design if it didn’t bring in a fawning public?

What happens to these market dinosaurs? Does anyone ever come along to rescue them from listing purgatory, the endless parade of critical buyers judging their views, frowning into their bathroom mirrors and peering into their cabinets?

For a few, five or six years down the road, the market finally catches up to an asking price. The townhouse at 41 East 70th Street, for example, spent seven years on the market before it sold this fall for $25 million—the price it tried, and failed, to get in 2005 before reaching ever higher—$30 million, then $35 million.

Perhaps the buyer, steel magnate Leroy Schecter, felt a pang of sympathy for the overreaching townhouse. He had, after all, just re-listed his apartments at 15 Central Park West for $95 million—a full $40 million more than he’d been asking the year before.

So what’s responsible for the spinsterhood of 129 West 20th Street?

“It’s a luxury loft in a non-doorman building—there’s your start. Nothing in the building is that size, and it’s a very, very taste-specific,” said a broker who was familiar with the property. “I brought a lot of people there who really, really loved it, but it didn’t fit their lifestyle. And they didn’t want to pay for a renovation that if they bought it, they’d have to destroy.”

He cited the cantilevered steel staircase—which would make most parents of small children convulse in fear, the kitchen with unusual zebrawood cabinetry (stunning) and unusually small European appliances (not so stunning) and the fact that the master bedroom and its terrace faced an office building. It was a temperamental beauty whom everyone wanted to date but no one wanted to marry. Not to mention that the Chelsea of 2006 was not the High Line, Google-hosting, gentrification juggernaut it is today. If it made its market debut today, it could probably get $6.45 million, just as it could have back in 2006, but it’s no longer the fresh-faced debutante it had once been.

“The owner really spent a lot of money in the materials and the design,” said another broker. “But in real estate, your dream penthouse is not someone else’s dream penthouse.”

Indeed, although the staircase didn’t worry the broker representing the Canadian family (the children already lived with one) she fretted aloud that the layout—with the bedrooms right off the entertaining areas—would keep the children up if the parents had parties.

Eran Cohen, a rental broker in the building, was more blunt. “I think it’s a great, great unit, but it won’t go for that price,” he said, adding that the owner keeps toggling between renting and selling, which may suggest indecision. Said Mr. Cohen: “He has no patience.”


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