Great Salesman Barnett Asserts 10,000/sqf is 20 to 30% Cheaper than Market

Real Estate is usually the ultimate in capitalist negotiation, and ensures the price of the property reflects the true market value at the point of sale. The agent and seller are negotiating for the highest possible price, and the purchaser looks to capture the best property in their mind for their cash. In most cases the market has comparative units that can be used as benchmarks for price.

A sale completes only when both sides are happy with the value they receive from the transaction.

So when I see Gary Barnett, who just raised the price of a yet to be developed penthouse from $98.5 million to $110 million in the pre-build One57, says his properties are still 20 to 30% undervalued, well, I just have to chuckle. Anytime a seller tells you that by purchasing a property you’ll instantly increase your wealth – that the property will miraculously increase in value because you hold it – you have to just step back a minute.

Mr. Barnett has no interest at all in granting you any bonus value. It’s his job, his best interest, and it’s his positive (yes, a good trait here) greed to maximize the revenue on his sale. When you purchase his property (or purchase any property, from any realtor, no matter how inexpensive or gaggingly decadent) the property will be worth Exactly What You Paid For It.

The only possible case where the property will be worth something different than you paid, is if you paid too much. The only side of the negotiation that has the best information about the property is the seller. They hold more cards than you. They know, say, if the marvelous property that you bought with a fantastic view has a new development slated for build that will completely cut off that panoramic cityscape in only a few years.

It’s just lovely to know that the same cheezy realtor lines that I get at the other end of the market (yeah, I don’t have $110 million for a condo sadly) are the same lines at the top. Barrnett also describes the property as “there will be more room to increase prices in the near future” and “prices in the building are still extremely conservative given where the market is today”.

Ahhh, it’s the same pitch at every level of the market. “Buy now, it’s underlisted, and the market supports higher prices, but only if you buy. right. now.”

Recession Proof-ish Condos: Buy In Financial Districts

I’ve mentioned many times that the condominium market in financial centres will always retain more value in a recession and bounce back quicker. New stats out of NY continue to show this trend.

Top end condominiums (the top 10% by price in any quarter) are down a very modest 16% from their height in Q1 of 2008 (4.17m vs. 4.99m) – where outside the financial district we are easily seeing values that have plummeted 60%, and in rare cases 90% (You can get HOA property for as low as $52 per sq. foot in Las Vegas).

This quarter and the last quarter have the highest number of 10m+ units sold in Manhattan. 12 completed sales of units 20m+ occurred in the three months ending September 30^th (here’s one).

Finally, One57 developer still believes he’ll sell out his development – the tallest residential building in Manhattan when it goes up – at prices ranging from $3,500 – $8,000 a sq. foot (up to $91,425 a sq. m.).

It’s nice to know the 1% are still buying, and buying, and buying.

A Condo you will never be able to afford – $98.5 Million USD

The tag line is:

Not only do you live at the centre of the universe, you overlook it

And for that right person who feels that they live (nay, are) the centre of the universe, there is now a condominium in construction that will have enough square footage to hold every cranny of your massiveness. The one57.

There are actually two (2!) of these apartments at this price – the 75^th floor 13,554 ($7,267/sqf) square foot, and the (for the more refined) 90^th floor 10,923 ($9,018/sqf) square foot residence.

I can honestly say that I don’t have the funds to live there.