Last week the Wall Street Journal published two articles, one Tuesday and one Friday, about high priced Manhattan sales. In the first, the reporter noted the enormous price difference between sales at 2 East 67th Street, the first a few years ago and the second a few months ago. He used these two sales to draw conclusions about the change in the market between then and now, since the recent sale closed at a price slightly less than 40% of the price in 2008. And on Friday there was an article about a recent contract signed at 15 Central Park West (allegedly for slightly under $7000 per foot) in which the author observes that the upper end condo market shows more strength than the upper end co-op market and quotes expert opinion that 15 Central Park West is “operating somewhat independent of the luxury market”. He also quoted me giving, in abbreviated form, the opinion I reiterate below-
Here’s that opinion: one or two sales do not make (or break) a market. In every environment there are outlier sales (sales which occur outside of the normal price boundaries) both high and low, occurring in both the co-op and condo markets. These outliers usually tell more about the personal circumstances of the principals involved than about either the type of property or the market overall. Has the estate reached that crucial moment when just getting the damn apartment sold counts for more than anything else? The buyer who arrives at just this moment may be getting the deal of a lifetime. Similarly, the buyer who has just sold his company and will pay literally anything for the trophy property he longs for is an unexpected gift to the seller who has listed that property at a price unjustified by all the comparable sales.
As my wife says, the world divides into two types of people: those who brag about how much they spent and those who brag about how little they spent. Both types buy real estate, but what real estate they buy, and for how much, should never be a gauge by which to judge the market as a whole.