At $10.5 million, the Manhattan five-bedroom condominium went on and off the market for almost a year. Reduced to $9 million in February, it got an offer in two days and went into contract, said listing agent Jason Haber of Warburg Realty.
It helped that the owner, a Broadway producer, promised “Hamilton” tickets to the successful buyer’s agent, Mr. Haber said, but cutting the price was critical.
“It’s not that the high-end of the market has evaporated,” he said. “It’s just that there’s a bit of a correction at that end of the market.”
Across the U.S., more luxury-home sellers are reducing their asking prices. In January, 4.1% of for-sale homes priced at $5 million or above got a price cut, a 50% increase over January 2015, when only 2.7% got a reduction, according to Realtor.com. The median reduction was $501,000, or 7.2% of the listing price.
This small slice of the luxury market saw a more dramatic uptick in price cuts than the market overall. In the same time frame, 12.2% of all for-sale homes got a reduction in their listing prices, up only 4% over the previous year.
The growing number of price cuts suggests luxury-home sellers are becoming more realistic about property values as sales have slowed, said several real-estate veterans. A couple of years ago, record sale prices were making headlines, emboldening sellers to ask sky-high sums.
Indeed, 2014 was a “banner year” for luxury-home sales, said Javier Vivas, an economic researcher for Realtor. (News Corp., which owns The Wall Street Journal, also owns Realtor.com, the listing website of the National Association of Realtors.)
In the second half of 2015, sales lost steam and prices came down to earth, Mr. Vivas said.
More luxury homeowners are turning away from “aspirational pricing”—a change that bodes well for getting deals done, said Jonathan Miller of New York-based appraisal firm Miller Samuel. “The high-end of the market peaked well before the balance of the market.”
This article originally appeared on The Wall Street Journal.
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