motivated (proud?) seller picked the wrong price at 315 West 23 Street loft, again + again

new kitchen had to be some help, right?
One story for the Manhattan loft #12A at 315 West 23 Street (the Broadmoor), which cleared the market at $1.135mm on August 24 is that was down nearly 20% from The Peak, but so were a lot of lofts. A wrinkle on that story line would be that that 20% decline would likely have been worse, but for the new kitchen put in since 2008. But my call for the story of the recent sale is how wrong the seller was about the market and long it took for the market’s lessons to be heard.

I hope this is not perceived as mere criticism of the seller and agent, but as an illustration of how bad things happen to good lofts. Here is the sequence, starting from a quick sale just as The Peak of the overall Manhattan residential real estate market had climbed on its horse and turned west:

Let’s talk abut the loft a bit before talking about those numbers.

is what it is
The major market challenges to loft #12A were the same in 2008 as in 2010 and 2011: it is a windowed 1-bed 1-bath with an office that you enter through the kitchen, with ceilings that are high enough for a ‘sleep loft’ and some additional storage. It has going for it a roughly square footprint and windows East, North and West. The floor plan packs a lot of utility into roughly 28 x 34 foot box, with a sense of volume from the high ceilings, big windows, and 400 sq ft living room.

Personally, I don’t see this footprint as supporting more bedrooms or a second bath, without carving it into a rabbit warren. (You could put a bed for a child in that irregular office, but then you’d probably lose that longer closet.) Point being: it is maximized for what it is, as is.

After buying in 2008, the recent seller upgraded and expanded the kitchen. Differences may be subtle, but are apparent from the old and new floor plans. The (former) entryway closets were removed to permit the expanded kitchen to slide east a bit; the (former) office closet was reversed, to be entered from the foyer as a hall closet (and a new closet installed in the office); she may have saved some appliances, but the frig and a wine frig were moved to the angled wall, double ovens and a stacked washer dryer moved to the west wall of the kitchen, a new (larger) cooktop was slid east, and  even the sink was moved (and expanded). There is only a little counter work space in the new kitchen, but there was almost none in the old one. I can’t tell from the lack of ‘before’ pix, but I suspect the cabinets were completely redone, as well.

From the floor plans, the changes are subtle, as I said. Indeed, I missed them the first time I looked. But as an avid (if messy) cook, the new kitchen seems a much more fun (and efficient) place to work. The tragedy is that The Market did not want to pay for that improvement.

back to the numbers
Look again at the long marketing campaign, above. Seller started out asking considerably more than she had paid 2 years earlier, presumably because of the investment she sunk into the new kitchen. She adjusted immediately, and then again in the fall. After a pair of new prices in each of July, September and October, she reached some limit in November (perhaps wanting to use that new kitchen for only her second holiday season).

When she came back in the new year with a new firm and a new price, that price turned out to be firm, as well: she held at $1.199mm for the 4 months it took to get a contract.

a female dog approaches
Hindsight is a cruel prism to examine an extended and painful listing history. If one takes the view that The Market does not make mistakes but merely identifies values, all she wasted was time, in not attracting a bid under $1.2mm earlier. But if you take the view that buyers are influenced by emotional responses to a seller’s apparent distress, you would guess that she’d have gotten more than $1.135mm (and in less time) if she had started lower. Put me in Team Emo on this one.

There are many reasons why it is difficult to say where loft #12A should have sold in the current market, compared to the sale price at The Peak (for those of us on Team Emo who believe the answer is not necessarily $1.135mm). I see no good paired sales in the Broadmoor from which to measure hyper-local market trends. The closest I get is #7F on June 12, 2007 at $1.18mm and #6F on October 29, 2010 at $1.052mm, where the first is pre-Peak and the spread is ‘only’ 10.8%. That (weak?) comp suggests that the 20% drop in market value for #12A from June 2008 to August 2011 — despite an improved kitchen — was an over-reaction by The Market.

last bit of second-guessing (for today)
To be blunt, and perhaps cruel, my guess is that she over-valued her new kitchen because she knew how much work had been done (and money spent) and how much better it was. The Market failed to appreciate that, in any sense of the word. Team Emo guy that I am, I have to wonder if The Market might have been more receptive had she not pulled away from the market in November, and held firm at one of those Fall prices.

© Sandy Mattingly 2011