New UrbanDigs data shows us just how important it is to price property correctly in Manhattan. Homes priced accurately from the start attract buyers quickly, resulting in a minimal discount off the original asking price and a faster sale. However, pricing too high could mean your property will sit, without offers, and rack up days on the market (DOM) resulting in a high discount.
The chart provides a clear view of the correlation between a listing’s DOM and the eventual discount from the original asking price.
Green Line (Under 60 DOM): Representing properties listed for fewer than 60 days, this line shows a lower discount range of about 0% to 5%. Accurate initial pricing encourages quicker, more competitive sales.
This trend reflects a fundamental principle emphasized by Alon Solé of Platinum Properties: “The better approach is to price the listing just under what the building and area are valuing similar units that have closed. This has the best chance to bring traffic, demand, and much more potential to drive the price up with multiple offers in a relatively short period of time.”
Red Line (Over 120 DOM): This line captures the discount for properties on the market for over 120 days, showing significant reductions of 10% to 15% from the initial price. When a property stays on the market for an extended period, it often means the price was set too high initially, leading to price cuts over time to generate interest. The cost of pricing too high is clear — homes linger longer, and sellers face not only heavier discounts but also ongoing carrying costs.
As Solé notes, “The average sales price in Manhattan is about $1.1M. Pricing the average listing incorrectly can easily result in a discount of over $100,000 plus months of carrying costs.”
Blue Line (3Q24 Median): Serving as a reference point, the median discount across all Manhattan listings in the third quarter of 2024 is around 5%. This benchmark indicates a general discount level for the market, showing how properties under 60 DOM tend to meet or even beat this median, while those over 120 DOM trail far behind, needing much larger reductions to sell.
Advice for Sellers
Sellers need to be hyper-aware of this market reward and penalty system. Increased days on market is a silent deal killer – so do your best to be realistic and price properly from the get-go.
Noah Rosenblatt of UrbanDigs emphasizes the impact of pricing and days on market, stating, “We like to think that markets are efficient and reactionary, and as such, it is not surprising to see the markets reward properties that are underpriced or priced at market, and at the same time, inflict a penalty on those that are not.”
The takeaway here is simple: avoid testing the market with high initial prices. Pricing realistically from day one can result in faster sales and higher returns, while overpriced listings risk prolonged market time and greater losses in both time and price.
Your listing agent can arm you with accurate market data so that you can properly understand exactly where your unit stacks up against competing inventory.
If you’re ready to sell, or if you’re just curious about what your property is worth, reach out to Platinum Properties today to be connected with a member of your team who can help educate you on the state of the sales market, how your property stacks up against competing inventory, and how the Platinum team can help get your unit sold for top dollar.
