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People still putting their US mansions on the market

New York

BILL Grabowski, the owner of Healthstar Inc, a pharmaceutical machinery business, has lived with his wife on the same piece of land in Quincy, Massachusetts, for more than 30 years. Now, with US equities imploding and states of emergency being declared across the country, Mr Grabowski has decided to list his four-bedroom, four-bath house for just under US$2.7 million.

"The worst thing that happens is, nobody buys it," he says.

Mr Grabowski isn't alone. Some homeowners have looked at the country's unprecedented economic and social tumult and decided to put their houses on the market, often with prices that correspond to a booming housing market.

"I can think of three clients I have, off-hand, who said 'let's roll' ", says Vickey Barron, a broker at Compass in New York.

"Any good agent's job is to sit down with a seller not in person, anymore - but to sit down with them and list the pros and cons," she continues. "Those clients wanted to move forward."

The list of cons is a long one. The real estate market, particularly in the so-called "luxury" tier, has been struggling for years. "The issue already was getting people through the door," Ms Barron says. "And then, when they did come in, they were in anything but a hurry" to buy. A Douglas Elliman Miller Samuel report pegged luxury as an average of US$2,864 per square foot during the fourth quarter of 2019 in Manhattan.

Now buyers and sellers also have to reckon with near-impossible logistical hurdles, even if a contract does get signed. How can an appraiser get into the building if non-residents are restricted from entering? How, with social distancing, can anyone interview with a co-op board?

"I have someone who's signed a contract for an apartment on New York's Upper West Side, and now he's wondering how he'll get movers to put furniture into the new apartment," Ms Barron says.

"And if someone's bought and wants to do a renovation, can they even get contractors in?"

None of this has stopped Billy Armfield, a data scientist for a software company, from listing his 1,400-square-foot, three-bedroom duplex apartment in Brooklyn, NY's Fort Greene for US$1.9 million.

"We definitely watched the market and wondered if it was the best time to do it," says Mr Armfield, who's lived with his wife and daughter in the apartment since 2017. "We know there's also an ethical concern, and we know the world is focused on being safe right now, but we always wanted to come to market in the spring."

Mr Armfield put his home on the market last Friday, listing it with Erin Boisson Aries and Dustin Crouse of Christie's International Real Estate's New York brokerage. "The stock market is definitely down, and that obviously will affect some potential buyers," Mr Armfield says. "But interest rates have also plummeted, so that is going to give buyers easy credit."

It's those historically low interest rates, sellers say, combined with a belief that their own houses are, in some way. unique to the market, that has led them to list. "For us, I think what it came down to is market positioning," Mr Armfield continues. "The apartment has lots of character, and it is unique relative to the other inventory on the market."

Even as sellers are listing houses, multiple brokers say contracts are being signed this week, particularly for houses below US$1.5 million.

"Especially first-time homebuyers, (the stock market collapse) isn't relevant to them because they need a home," says Josh Stiles, a broker with Compass in Boston, who listed a US$2.1 million condominium a block from Boston Common last week. "That market has minimally been affected." He says that he's brokered two signings in the last five days.

Faith in ongoing demand led Lenny Moreira, who has retired from the construction company he founded, to list a studio apartment at 330 Third Ave in New York that had formerly been occupied by his son.

He's going to list the apartment for about US$525,000, well above the roughly US$400,000 he says he paid for it seven years ago. "I could keep the apartment indefinitely," Mr Moreira continues. "But I think people are going to continue to invest in real estate. I could be wrong."

That uncertainty remains, however optimistic sellers might be.

"If people don't have the money right now, maybe the market will come back in a month, and they'll say, 'Let's go back and look at that house again,'" says Mr Grabowski. "But we built this house, and we love it. You can fish for stripers right off the beach, and then in 15 minutes you can be in downtown Boston at a Red Sox Game - if they ever start playing again." BLOOMBERG