why did that first contract fail?
It is impossible to know this kind of thing from the outside, but there is a reason that the “1,300 sq ft” Manhattan loft #6C at 133 West 28 Street took nearly a year to sell without any meaningful change in asking price. I wish I knew the story behind this listing history:
|April 5, 2011||new to market||$1.2mm|
|Aug 1||back on market|
|Sept 22||change firms||$1.195mm|
|Jan 12, 2012||contract|
I don’t believe the price change had anything to do with the deal. The loft was as well described by Halstead in the first go-round as by Core in the second. The sellers thought they had a deal last July, but something happened to that contract within 3 weeks (possibly a board turndown, but that is pretty quick work for a coop board). Rather than stick with the first agent, the sellers decided to change firms, though not (meaningfully) change price.
Sometime in between the Halstead listing photos and the Core photos the loft was redecorated, and possibly staged. The living room furniture is very different in the April 2011 pix than in the September 2011 pix. I can’t be sure if the palette in one bathroom changed, or if the photographer’s filter was set differently in each photo, but the later photo (with the dramatic shower curtain) has the bathroom countertop much darker than in the first set of photos.
Maybe the new look in the living room (more crisp, lighter, more neutral) attracted more qualified buyers in the Fall. Or maybe the sellers were more flexible in the second tour then in the first. You’d think that sellers who were asking $1.2mm but who had paid $880,000 in 2004 would be negotiable down to 8% if that was what it would take from the beginning, but perhaps they only learned that lesson after losing a deal.
Fact is, both agents found contracts within about 15 weeks of beginning marketing; only the second one held together.
do you see anything wrong with this loft?
I ask because (as you will see below) the other recent building sales imply a higher value event han asked for #6C, though the comp analysis in each case with those sales is complicated. I see a basic loft, with nice finishes, challenging light, a second “bedroom” that does not qualify as a legal bedroom (because it is too narrow), and a chef’s kitchen “in the truest sense” (to give the babble some credit). Yet the sellers started out asking only $923/ft and The Market gave them only $850/ft.
There are 100 downtown lofts on the Master List of Manhattan Lofts Sold Since November 2008 that sold between $500,000 and $5,000,000 since February 1, nearly all of which have sq ft data. Loft #6C (with its nice finishes, challenging light, small second “bedroom”, but true chef’s kitchen) closed at a lower price per foot than all but 9.
recent & nearby sales = not very helpful
The loft upstairs was in contract when this one came to market last April, but was hardly an easy comp. I hit the “1,300 sq ft” #7C in my May 7, 2011, stubborn flower district loft seller holds for sale at 133 West 28 Street with rooftop garden, but it’s that rooftop garden (“800 sq ft”) that makes it difficult to project the fair value of #6C from that #7C sale at $1.58mm. The #6C sellers took a healthy discount from the #7C sale, so they did not seem to be too distracted. I will come back to that one below, as the new math is noteworthy.
Two lofts on the same floor sold more recently than #7C. They were also presented some comping issues for #6C, though the #6C sellers appear to have used them, or came to an asking price at their closing prices by some other method. I hit loft #6B in my August 8, 2011, despite failed contract, 133 West 28 Street small loft sells above ask in a refreshingly efficient market, when it sold the same day (as noted in the post) as loft #6A (in the attached building next door, part of the same coop). They are both “900 sq ft” mini-lofts (so, had very different utilities than #6C, at “400 sq ft” larger) and that post title says “refreshingly efficient market” because they sold on the same day at essentially the same price, by two different sellers selling to two different buyers. (Well, for you anal types: at $922/ft and $929/ft.)
Those two went into contract the month after #6C came to market, and — coincidence or not — the #6C sellers came out right in the small range of those $92x/ft sales. The market efficiency broker there, as #6C got bargained down to $850/ft.
Let’s go back to that garden….
comping backwards, from outside space, in, and beyond!
With the benefit of hindsight and the #6C sale, it is now easier to look at #7C. With #6C having discovered the interior value for the “C” line of $850/ft (obviously, $1.105mm), we look back at the #7C sale as including 1,300 sq ft of interior space worth roughly the same $1.105mm, leaving it to the 800 sq ft rooftop garden to account for the $475,000 difference. On a per-foot basis, the exterior space at $594/ft turns out to have been worth 70% of the value of the interior space in that sale last April.
The math works, but the result is an outlier for Miller values, as you already know if you have been aware of my frequent use of this May 6, 2010 post, riffing with The Miller on the value of Manhattan terraces, decks + balconies, for the basic guideline that outdoor space is generally worth between 25% and 50% of the value of interior space. See that post for a discussion of The Miller’s original source post and a discussion of what kind of variables may make a given array of balcony, terrace or deck more or less valuable.
Looking back at #7C now from the perspective of the #6C closed sale, the 70% valuation of this rooftop garden is an outlier because it is disproportionately large (well more than half of the interior) and lacks direct access from the living space. Indeed, it is possible that this value is actually more of an outlier, as there was very little bragging about the #7C interior space, so #6C may actually have a more highly finished interior. (Plus, as I went on, and on, about in that May 7, 2011 post, the #7C floorplan has some real ‘issues’.)
But I will stop here, before running further afield.
© Sandy Mattingly 2012