MLG fave loft at 130 West 17 Street again shatters expectations, sells 1.7% above Peak

non-commodities can be hard to value
it is a good thing I am not sensitive, because I have once already been surprised by the clearing price of the recently re-sold “2,150 sq ft” top floor Manhattan loft #9S at 130 West 17 Street. The last time it sold (June 5, 2008, at $2.85mm) I thought it “closed above where the comps and building stats indicated the range of values” (that was in my July 15, 2008, 130 West 17 Street #9S went for it + got it, the second of two posts about that listing, with my September 23, 2007, 130 W 17 9S is new + really going for it). This time it sold at $2.9mm, a tiny premium to even that near-Peak above-comps sale, but at least this time there is the baseline of that June 2008 sale.

I will come back to that June 2008 sale, but it is clear that The (current) Market had little trouble accepting the loft: it came out at $2.995mm on December 10 and found the contract by February 9 that closed on April 16 at $2.9mm. The premise for the recent asking price was clearly the very similar June 2008 value, though I will confess to finding it difficult to articulate why Now should be higher than Then.

My working assumption (subject to seeing some facts that lead me in a different direction) is that this loft benefits from scarcity of true comps, so is more prone to Field of Dreams pricing. This is how I put it in my July 15, 2008 post:

My general point here is that the truism that The Market Is Determined By The Decisions Of Individual Buyers And Individual Sellers generates — in my opinion — more variation for lofts than for "apartments". Perhaps because there are so many more "apartments" than lofts in Manhattan, an "apartment" buyer is more likely to have more directly comparable choices of units in similar locations, of similar size, in similar condition. Thus, the general market should be more ‘efficient’.

My specific point is that this loft closed above where it could have been expected to (by me, at least), taking into consideration its location (a great Chelsea block, yes, but one that did not generate a premium for #9N or #6S), condition (is that renovation worth $400/ft over #9N? or even more over #6S?) and the possibility of paying an additional and unknown amount for roof rights.

A loft that has no peers is a valuation problem, and an especially large problem for a buyer dealing with a stubborn seller. That was certainly the case in 2007 and 2008 (see the extended listing history, discussed in the July 15, 2008 post).

still exquisite, still dazzling light from 4 exposures, still a great location
I see exactly two things of potential significance that have changed from 2008 to now in the marketing of this loft. The kitchen island is gone, and they are no longer playing up the possibility of purchasing roof rights from the coop. (Compare the floor plan then vs. now; and the broker babble then vs. now; the kitchen is easier to compare by using this set of Then photos from the old Corcoran listing.) Everything else is exactly the same (allowing for different people to measure the same rooms a little differently at different times).

I don’t think that either of these differences matter for the current value, but I have a theory about those roof rights back in 2008 that I will get to.

I am not going to go to the trouble of looking for the best comps for loft #9S, as even I have my limits (you may be surprised to hear). But I have a high degree of confidence that there have been no lofts for sale recently, or recently sold, that have the combination of positives that #9S has: a highly efficient square footprint that is even more efficient for having so many windows on 3 sides (can we agree that the 4th “exposure” is a joke? if not see how long it takes you to find the one north window); plus “panoramic views and dazzling light”; plus the utility of 3 bedrooms and a windowed office; plus the high level of finishes; plus the 17th Street location in the becoming-more-prime east Chelsea corridor; all for under $3mm.

Any candidate comp you can find will have multi-variant adjustments to be made, with the utility fading with each adjustment.

my theory about the roof
I would certainly argue that the current value of loft #9S should be lower than that in 2008 (that contract was signed March 5, 2008), though I conceded that the Market disagreed with me on that. But I don’t think the current sale at $2.9mm would be (rationally) achievable without that intervening sale at $2.85mm, for the same reasons stated (about which I was wrong, as events occurred) in my September 23, 2007 and July 15, 2008 posts.

My theory is that the June 2008 buyer was persuaded to (ahem) significantly over pay for loft #9S then because the additional plus factor of “the coop is receptive to the purchase of roof rights for private use”. As hard as it is to comp this loft as-is (or as-was), it would be exponentially more difficult if you had to find comps with roof rights.

Having done that job of goosing the 2008 value, the roof rights are not mentioned in the current babble but the hangover effect of that $2.85mm clearing price still operates to set a justifiable range of values. This theory only works if that 2008 buyer was excited about developing the roof, but it is the one reed I can cling to that takes the June 2008 value into rationality.

does 130 West 17 Street sit at a break in the space – time continuum?
Wise guy readers of Manhattan Loft Guy will remember that I have had trouble with comps for other lofts in this building. I paraded that trouble in my February 9, 130 West 17 Street loft flies through market, beating (my) expectations, in which I confessed to have advised buyers that the “1,200 sq ft” or “1,300 sq ft” Manhattan loft #5S had an inflated asking price by reference to actual sales in the building, despite the (later established) fact that it sold fairly quickly at only a small discount.

i would like to think that it is not arrogance that leads me to continue to believe that some of these loft sales are ‘beyond comps’, that the best analysis of past sales data does not guarantee that an individual buyer and an individual seller will generate a market price that cannot be fit rationally into the past sales data.

In any Manhattan residential real estate market niche you can find someone who says (by word or deed) “I don’t care what the comps say, this is what it is worth to me”. When a seller persuades a buyer that the buyer can’t have the unit except on that basis, you get sales that are not rational, or beyond comps, or outliers. With two in the same building, there may be a break in the space – time continuum at 130 West 17 Street, but I can hardly entertain that notion and stay rational….

© Sandy Mattingly 2012