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Here's the Psychology at Work Behind NYC Real Estate Listings

By Amy Zimmer | February 21, 2017 3:52pm
 The kitchen at 318 W. 47th St. has an induction stovetop, which is all the rage among designers right now. But since it's not something necessarily on would-be buyers' wish lists, the marketing team isn't promoting it in materials. They want the crowds to come first to see it for themselves.
The kitchen at 318 W. 47th St. has an induction stovetop, which is all the rage among designers right now. But since it's not something necessarily on would-be buyers' wish lists, the marketing team isn't promoting it in materials. They want the crowds to come first to see it for themselves.
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Halstead Property Development Marketing

MANHATTAN —  From pricing to staging, there's an art to luring would-be home buyers that taps into the psychology of the New York City real estate market, brokers say.

The end goal is to get as many eyes on a property as possible — converting online searches into open house visits — since there's often a “monkey see, monkey do” effect when buyers travel in herds to showings, which then creates a sense of urgency, said Zach Ehrlich, of Mdrn. Residential.

“The psychology of real estate very much has to do with why bidding wars happen. When one person wants something, others want it, too," Ehrlich said. “When there is less demand, even if something is a great bargain, people tend to be slower about jumping on it."

When more listings hit the market — upping supply — there’s a paradox of choice, Ehrlich believes, making it less likely for someone to pull the trigger on buying. That’s what’s happening in the luxury market, where buyers are sitting and waiting, he said.

But Claire Groome, of Warburg Realty, thinks that crowded open houses — which “create panic for people” — are losing their allure as the market has shifted over the past year and buyers are gaining more leverage.

“People in this marketplace do not want to get into bidding wars,” she said. “When there are too many offers [nowadays], it frightens away the buyer, and people have moved on in their mind.”

Here are some factors that brokers consider when creating a listing:

The power of pricing “just below”

Just as in retail, many in real estate price something "just below" a round number — for example listing an apartment for $499,000 instead of $500,000.

“There is a psychological effect of being just a hair under,” Groome said.

She, for instance, recently sold a three-bedroom co-op in Carnegie Hill listed for $3.495 million after three days on the market, saying, “Rarely will you see something listed for $4 million.”

When Dan Bamberger, of the Bamberger Group, analyzed Manhattan sales prices in 2015 using Streeteasy data, he found that listings between $300,000 and $1 million used the “just below” strategy nearly 90 percent of the time. Homes priced between $1 million and $10 million used the strategy 78 percent of the time.

The allure of neutral spaces

Staging apartments — which often involves de-cluttering, painting and changing furniture — has become more common, even for apartments at lower price points.

These apartments tend to show better in photos as well as in real life, experts say, as they give would-be buyers an easier canvas upon which to quickly project their lives.

Groome calls it the "5- or 10-second rule." She believes people decide within 5 or 10 seconds of seeing a space whether they can picture themselves living in a home.

She recently took over a languishing listing from another broker of a $15.5 million Upper East Side co-op, decorated opulently in garish greens and pinks. She cleared it out, painted it a more neutral white and put modern furnishings in.

Within days she had offers — at the same price point.

“What sells is modern-ish, less furniture, bright light," she said.

The repellent effect of stale listings

In this market, listings that sit longer more than 60 to 90 days raise red flags, Ehrlich said.

“Listings that are past 90 days have a 95 percent chance they won’t sell unless the seller drops the price,” he said.

Buyers are suspicious of stale listings, thinking something must be wrong with the property. Their agents also steer clear of them, thinking the seller isn't likely to cut the price, Ehrlich said.

These days it’s hard to hide if a unit has been on the market for months since sites like Streeteasy clearly display a listing's history.

But brokers try to work around this, warned Bamberger.

They might reduce the price by some nominal amount — like $1,000 or $5,000 — to grab attention again as a "price reduction,” he said. Or, they might re-list an apartment, reversing the order of the unit number. So, apartment 11K might be relisted as K11, “effectively tricking websites like Streeteasy and Zillow and, in turn, the consumer," he said.

A listing's wording is chosen with care

Though text may be secondary to pictures, many brokers still labor over word choice — even more so now, said said Stephen Kliegerman, of Halstead Property Development Marketing.

"Because of the political climate, [marketers] are saying, ‘Do we really want to say it that way?’" he said. "In places like New York where there’s a more liberal constituency, people aren’t liking the word ‘huge’ right now.”

Some words, however, may have multiple meanings to astute buyers, like the popular descriptor, "quiet," Kliegerman said, which might be code for a dark apartment tucked away on a low floor in the back of a building.

“You want to make sure your messaging is clear and direct, but you want make sure you leave some things out so people still call you,” he said, explaining if a listing has too much information, would-be buyers might think they don’t have to see the space.

For instance, a new Hell’s Kitchen project at 318 W. 47th St. has a stove with an induction cooktop, which is all the rage among designers right now. But the marketing team did not play up the feature, hoping to lure house hunters into the space to tell them more about it in person, he explained.

Building names have a subtle effect, too

For many years, buildings on the Upper West Side tended to have names, like the Dakota, whereas those on the Upper East Side were more likely to be known by numerical addresses, like 720 Park Ave., noted Constantine Valhouli, of the real estate analytics firm NeighborhoodX.

There isn’t such a stark east-west divide these days, but names still carry power.

“Since in the city, residential addresses are generally more prestigious on the side streets while business addresses are preferable on the avenues, there is all sorts of nomenclature jiu-jitsu going on, by moving the entrance of a residential tower on the avenue onto the side street, or vice versa,” Valhouli noted. “Perhaps the few exceptions to this are Fifth and Park avenues, and the Central Park West, South, and North.”

Rental buildings are often given names to distinguish themselves from others, said Kliegerman.

Buildings often are given names when they’re at an “address that doesn’t place you anywhere” or might cause confusion, like how far north is 1575 Park Ave., he said. A building at 444 W. 44th St. might use a name if it's being marketed to Chinese buyers, since 4 is considered unlucky. A building at 1313 13th St. might also be given a name for superstitious reasons.

“When we’re naming a building,” Kliegerman said, “we work hard to make sure the name has some relevance to the history of the building or neighborhood, something that’s more contextual to the property.”