Nov. 6, 2023 By Ethan Marshall
A study conducted by the New York City real estate firm StreetEasy concluded that 35.7% of previously-owned New York City homes on the market don’t get sold. StreetEasy also concluded that the average listing spends a median of 89 days on the market in New York City, compared to the national median average of 15 days.
The three main reasons why a home in the city may not be able to find a buyer were determined to be the pricing relative to competition, time spent on the market and not using an agent.
When it comes to pricing relative to competition, a mispricing compared to similar homes on the market increases the likelihood of not finding a buyer. An asking price 1% greater than that of comparable homes in the neighborhood increased the probability of not selling by 8.8%.
The longer a home stays on the market, the less likely it is to sell. Each additional day spent on the market was associated with an increase of approximately 0.1% in probability of not selling. This would equate to a 3% increase each month of a home not being sold.
Sellers who partnered with a professional were more likely to sell their home than those who tried to sell on their own. Compared to listings represented by an agent, the average For Sale By Owner (FSBO) listing was 37.9% less likely to sell.
The fact that this many homes in the area end up getting taken off the market underscores the immense challenge sellers in the New York City real estate market face. One such challenge is that price points are much higher in New York City compared to the rest of the United States. According to the real estate marketplace company Zillow, the median asking price for a New York City home in Sept. 2023 was $1.095 million. This equated to nearly three times the national median.
StreetEasy noted that co-ops, condos and townhouses in New York City each have very different price points. In 2022, 31.7% of co-ops, 41.6% of condos and 50.1% of townhouses failed to find buyers. The median asking prices in 2022 were determined to be $599,000, $1.385 million and $6.595 million.
Despite there being a lot of demand for home in the city, many would-be-buyers have been reluctant to try and purchase a home due to rising mortgage rates. In the last week of September 2023, the mortgage rate in New York City was 7.53%. If one were to but a median-priced home in the city with a 20% down payment at a 8% mortgage rate, another $285 would be tacked on to the mortgage payment, up to $6,428. This has led to many shoppers not being able to afford buying homes in the city, which may then result to sellers pulling their listings from the market.
According to StreetEasy Concierge and Senior Strategic Partnerships Manager Carlo Romero, there are still a few things those looking to sell a home in New York City can do in order to increase the likelihood of reaching a deal.
“Focus instead on the aspects under your control, like pricing strategy, working with a well-qualified agent, and the quality of your listing,” Romero said.
Skilled real estate agents with proven track records selling homes similar to those people are looking to sell can be very helpful when it comes to pricing a listing. On average, these experts sell more than one month faster and at a sale-to-list price ratio 10% faster than the market.
StreetEasy also highlighted the importance of creating a high-quality listing with good photos, a detailed description, a floorplan and rich media, like 3D tours. According to StreetEasy’s data, their listings that include 3D tours get 10% more views on their site. Listings that include floor plans get 69% more views.