penthouse loft at 121 West 20 Street beats Peak, but is it rational?

by 2%, but it is something
Of course you know that any single number to summarize The Market (whether the entire Manhattan residential real estate market or the loft niche) smooths out a great deal of data noise. Some data points are close to the average or median, some are a bit higher or a bit lower, and even fewer (generally) are much higher or lower than The (overall) Market. I will leave the metaphysics of that for another day (note to self …), but will note that the outliers are the bright shiny objects that tend to attract a lot of attention.

Today’s bright shiny object (apparent outlier) is the Manhattan loft #5E at 121 West 20 Street (sometimes known as PH5E), which is bright and shiny because it just sold for $2,1012,500 after having sold very very close to The Peak for $1,975,000. A lot more bright shiny objects like these and we would say that The Market for Manhattan lofts is back to peak pricing … but of course we don’t have a lot of similar paired sales. (Another note to self: check paired loft sales, 2008 and 2011.)

some very sincere flattery here
I would not call #5E a triplex, but the last agent did; it is either a duplex or a loft-with-mezzanine, and has a private roof deck way up top. Both marketing campaigns counted the second level / mezzanine that sits on top of about one-third of the main space (floor plan here) in the overall measurement, claiming “1,716 sq ft” in the current marketing and “1,700 sq ft” in the 2008 campaign. Note that StreetEasy thinks the space is “1,242 sq ft”, presumably as a measure of only the footprint, not the mezzanine.

What’s weird is that the main space claimed 15 foot ceilings in the last campaign but 20 foot ceilings in the 2008 edition. Very weird.

How do we know the condition is the same, now compared to 2008? Start with the fact that the floor plans are identical. Then look at how sincerely the 2011 agent flattered the 2008 agent by  stealing paraphrasing imitating much of the former broker babble. Same loft, in same condition, two sales showing a small but distinct appreciation.

a very accepting market
That gain was achieved very smoothly. Loft #5E came to market on April 2 at $2.195mm and found the contract by May 13 that closed on June 17 at $2,012,500. Yes, the buyer worked an 8% discount from ask, but still paid more than the July-2008-buyer-turned-June-2011-seller.

A rational and informed view of the market context for #5E in 2011 would have thought that it was well over-priced at $2.195mm. But macro does not explain everything, or predict specific decisions by individual buyers and sellers. This seller seems to have asked for the moon and convinced this buyer that it would take at least a small satellite to own the loft. That “$x,012500” suggests that they ended negotiations with a classic ‘let’s split the difference’, possibly from the seller having come down to $2.05mm and the buyer coming up to the last sale ($1.975mm).

Seller insisted. Buyer accepted. Market value was established, whether an outsider would have valued that loft at that time at that price, or not. That’s how it works, messy and (sometimes) irrational as it appears.

I am curious about whether an appraiser and a mortgage lender shared the buyer’s view of value here, but no mortgage has been filed (yet).

© Sandy Mattingly 2011