Pricing properties becomes more art than science in New York’s high-velocity market.

In November, large developer Extell Development pulled the condominium units at its new residential tower at One Riverside Park in New York off the market temporarily to adjust pricing. According to the developer, the price tags at the 35-story glass-and-limestone building were simply too low, and 70 of the property’s 219 units had flown off the shelf in the 10 days since the offering plan had been approved by the Attorney General. Extell’s move highlights that even master developers are having difficulties pricing for the velocity of the New York market.

In the third quarter, inventory hit historic lows, with just 4,567 total co-op and condo apartments available for sale, a 21.9 percent decrease from last year, according to a report by Miller Samuel. That marked the tenth consecutive quarter during which inventory dipped. Meanwhile, sales volume hit the second-highest level in Manhattan in 24 years, with 3,837 sales closing during the period. The quick pace of the market means that a comp could be here one day and gone tomorrow.

In this scenario, New York brokers have had to relook and refine its pricing strategies significantly in the last year. The limited inventory means there are fewer potential comps (comparable sales) and listings, to compare a listing against. Plus, buyers are looking further afield at properties in different neighborhoods, opening up a whole new world of comps to factor into the pricing equation.

Further adding to the confusion around pricing is the luxury market – prices there are rising faster than those in the middle. While the median sales price of a Manhattan apartment jumped by 0.8 percent quarter-over-quarter to $872,000, according to Elliman, the average price of a luxury apartment (an apartment priced in the top 10 percent of the market) rose by 9 percent quarter-over-quarter. As such, pinpointing the right price for a listing has become more of an art form where one has to rely increasingly on instincts and guts. This environment makes pricing both challenging and very interesting.