bidding war after 9 months, 6 price drops at 244 West 23 Street loft

timing is everything
That hoary chestnut “it only takes one (buyer)” is dear to every seller’s heart, while the very optimistic sellers also love “it only takes two (to have a bidding war)”. These bromides cause a lot of sellers to make mistakes, but sometimes they are … you  know … true. I came across the Manhattan loft
#5B at 244 West 23 Street as I was recently cleaning up my Master List of Manhattan Lofts Sold Since November 2008 . It is worth a post, even though it closed almost two months ago, because it is that rare bird: after many months of having no one interested, a (mild) bidding war erupted after the last price drop, and it closed on July 19 $25,000 above the ask.

Here’s the history:

Sept 10, 2009 $1.62mm
Sept 30 $1.52mm
Oct 6 $1.5mm
Nov 2 $1.49mm
Jan 29, 2010 $1.465mm
Feb 13 $1.41mm
Feb 18 $1.375mm
May 2 contract!

I have already ruined the punchline, as you can figure out that the contract was signed at $1.4mm.

Of course I don’t know what the sellers and agent talked about from September into April, but a reasonable guess is that these sellers were frustrated. And motivated. Note the three prices in four weeks at the start; note the three prices in three weeks after New Year’s. Note the resistance implied by holding at that last price for ten weeks before signing a contract.

that one buyer
Any reasonable buyer prepared to pay up to $1.4mm for this loft in May was probably pretty new to the market as a buyer; otherwise she’d have bid in October, if not from the begining.

Any reasonable buyer prepared to pay up to $1.4mm for this loft in May probably figured that no one else was interested in the loft, or it would have long since sold. Hence, she would naturally have assumed that the sellers would be negotiable from that last $1.375mm asked.

Imagine how surprised that solitary reasonable buyer prepared to pay up to $1.4mm for this loft was when she found out that there was another bidder (who must also have been new to the market, and was probably surprised to have company).

those two bidders
While the sellers were able to squeeze only a $25k premium over the asking price in those late April – early May negotiations, there must have been some satisfaction in not having to further cut their price to make a deal. I am guessing that the second bidder was worth at least $50k for the sellers, as they most likely would have had to give up at least $25k from their asking price if negotiating with a single buyer.

the metaphysics of The Market
Looking at this another way, if the loft was worth $1.4mm in May (a ‘fact’ established by the arm’s length transaction), then it must have been worth $1.4mm for at last some time before hand. (What changed from January 1, for example??)

But, if the loft was not worth $1.4mm in February (a ‘fact’ established by the failure to sell off the $1.41mm asking price), then how could it have been worth $1.4mm in May?

paging Yul Brenner
‘tis a puzzlement. But the odd stuff is what makes it fun! (Unless you are a frustrated-but-motivated seller, or a surprised bidder, perhaps.)

© Sandy Mattingly 2010


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