Lion’s Head loft at 121 West 19 Street takes a long time to lose 9% since 2007 resale
our long national nightmare is over
This is not new news, as the contract was signed unusually long ago, but the “1,920 sq ft” duplex Manhattan loft #3B at 121 West 19 Street (Lion’s Head) finally sold on February 28. My headline news is that the poor folks who bought the loft for $2mm leading into The Peak just sold it for $1.825mm. My subhead news is that these poor folks were trying to be “sellers” for a really, really, really long time, starting after owning it for just a year. Of course they had trouble discovering the market value, sitting through so many different permutations in the post-Lehman market (a difficult time to start, no?). Not many Manhattan residential listings have this record of not selling, not selling, and not selling:
|Sept 13, 2007||sold||$2mm|
|Oct 8, 2008||new to market||$2.5mm|
|Mar 14, 2009||
|April 24||change firms||$2.299mm|
|Feb 23, 2010||
|April 22||change firms||$2.275mm|
|Feb 10, 2012||$1.995mm|
|Feb 28, 2013||sold||$1.825mm|
Were these folks crushed for cash after Lehman crashed? As The Miller graphed so recently in a Three Cents Worth post on Curbed:
I don’t think many people realized how sharp the drop in supply was after the market corrected with Lehman bankruptcy in late 2008. Inventory collapsed as sellers could not see a quick rebound in the future and got out as quickly as they could in order to wait for the market to improve.
Not these folks! With the rest of the inventory in Manhattan “collapsed”, these folks persisted for 45 months (less two periods of hiatus in advance of changes in forms, lasting just over 3 months), at wildly varying prices. Let’s pause to spell that out: these folks persisted for F O R T Y – F I V E M O N T H S.
OK, they didn’t act as though they needed the cash, despite selling (trying to) into a collapsing market, as they started at a price that did not reflect reality. Whatever else you may think of the original asking price, starting at a 20% premium to a near-Peak value did not demonstrate much motivation to sell into a (repeat after me) collapsing market, a market that continued to collapse for the 5 months that 20% premium was proposed..
Note the parallels in that history: they asked $1.995mm from July 2009 into February 2010 and from February 2012 until getting the contract 5 months later. They asked $2.1mm for 3 weeks in the Summer of 2009 and from July 2010 into February 2012 (There’s no typo in that sequence; the year “2011” does not appear on the history because they stayed on the market without a price change from July 2010 into February 2012.)
Note how hard it was for the 2007 buyers at $2mm to ask a price below their purchase price: only from July 2009 into February 2010 and from February 2012 into July did they ask below their purchase price (12 of the 45 months), and then only $5,000 below what they had paid.
Note that in a listing history full of mysteries, the most inscrutable mystery may be the gap between contract in July 2012 and closing in February 2013. Under any circumstances, that is an unusually long time to be in contract, even for a coop (of course, Lion’s Head is a condo). One would assume the deal was in jeopardy at some point, contract notwithstanding, but from the outside of the curtain there is no way to do more than speculate. I want to refrain from speculating too much, but I do wonder how tempted the sellers must have been as late 2012 turned into such a strong sellers market, at least for other sellers.
not all feet are equal
Despite a book value of “1,920 sq ft”, the #3B floor plan maxes out as a 2-bedroom+den. Babbled as “spacious”, a more refined (if unconventional) claim might be “voluminous”, as much of the “space” is from cubic feet fit under the 16 foot ceilings in the living room and bedrooms. The front of the loft has the mezzanine den (plus mechanical room) over the kitchen and second bath.
While that living room seems to be quite large, note the limitations in the main listing photo (in large format, it is actually pic #8 on StreetEasy). The loft is nearly 2,000 sq ft, but the most sensible use for the last residents was to put a small (!) dining table at the bottom of the stairs. That photo shows another unusual feature, one that only people experienced in deconstructing listing photos might observe: the windows show as opaque. In real life you are likely to be able to see out of them, but for “sales” purposes, no. This is probably related to the babbled benefit of “quiet”, as there is almost certainly a wall uncomfortably close to the #3B wall of 10 foot windows. (You get a better sense of what lurks outside from the main listing photo in the first resale campaign.)
Careful readers of Manhattan Loft Guy realize that I hit another mezzanine loft at the Lion’s Head recently, one with a happier seller. In my March 29, Lion’s Head no bedroom mezzanine loft at 121 West 19 Street closes up $25,000 since 2008, that headline tells the essential story. That recent seller (loft #4C) had been a buyer at The Peak (not pre-Peak, like #3B) yet eked out a value above Peak (not a $175,000 decline, like #3B). In that post I observed:
I don’t see another Lion’s Head loft that resold close to Peak and then again recently, so it is hard to say if other lofts here are worth more than they were at The Peak. (The closest is #9D, which is not that close as far as dates, but might project as similar: sold pre-Peak on April 20, 2007 at $1.3mm and again a while ago on March 12, 2012 at $1.41mm.) I could make the argument that the hyper-local market in this building is at or above Peak.
Can’t make that argument any longer, at least without taking #3B into account. (The 3 units in contract but not yet closed appear that they will mark #3B as an outlier.)
Fans of this Lion’s Head (an inanimate celebrity in 2006) should follow the link in this excerpt from my March 29 post:
I have not hit the Lion’s Head in a while, perhaps because there were only 3 public sales in 2012. I did do a major recap on sales in the building in my Dec. 23, 2011 – Lion’s Head loft resale up a tad since 2006 at 121 West 19 Street, however. Lions’ Head fans should check that out, with its recap of 6 2011 sales and a discussion of how 2011 pricing related to the sponsor sales in 2006.
estimating bath size is difficult from the outside
It is impossible to know the full financial impact on the #3B sellers from having owned the loft at $2mm and sold 4+ years later at $1.825mm. I don’t know their mortgage payment, or for how long the unit was vacant when they rented the space. I do know that they rented it at least twice. Our listing system has better data than StreetEasy, showing that #3B was rented in September 2010 for $9,500/mo (StreetEasy correctly shows that it took from April 2010 to get that deal) and again in December 2011 for $9,000/mo (again, StreetEasy correctly shows that it took from July 2011 to get that deal). (That tenancy may explain why the closing was delayed so long after the July 2012 contract.)
This sequence implies that #3B had an empty period between leases, and that they’d have had trouble covering mortgage plus taxes plus common charges even when rented; if so, the full story was even more sad than this simple equation:
The mirror has two faces, and The Market has many data points. 2012 was not A Sellers Market for all sellers.
© Sandy Mattingly 2013