49 East 21 Street loft shows the benefits (and PAIN) of timing

and windows (pain, or none)
The Manhattan loft #11C at 49 East 21 Street sold on May 6 at a $100,000 premium to the asking price of $1.75mm. On the one hand, this shows the benefits of windows; on the other hand, this shows the benefits of timing. I mentioned windows first.

The floor plan is nearly perfect for fitting 2 bedrooms into a “1,461 sq ft” loft, starting with a nearly square footprint. But the glory of the floor plan is the west wall of windows on this high floor. That main living / dining / kitchen space is only 12 feet wide, while extending 32 feet back from the 2 north windows. The space would have a totally different feel at those dimensions but without the 4 large west windows.

Consider, for example, the same footprint on the 5th floor, without those west windows. The Market was offered #5C from October into April (less two months off) at $1.825mm and $1.775mm, with no takers. Without a sale there, we can’t know exactly how The Market values the premium for 11th floor windows and light, except to say that it is more than a $75,000 premium. Most likely, a lot more.

I can’t see contract dates from the original sponsor sales, but these two lofts sold for very different prices in the new development offerings: #5C for $1,114,983 on November 16, 2004 and #11C for $1,338,998 on March 28, 2005. It seems that the sponsor thought the 11th floor light plus the west windows were worth more than $200,000. (The fact that those original #5C buyers flipped out within 4 months, selling for $1.495mm on March 2, 2005, is fascinating, but a digression from my main point. Similarly distracting, #5C sold yet again on October 24, 2006 for $1.62mm, another data point from different market conditions.)

Fans of StreetEasy will easily find more contemporaneous evidence that The Market thinks the 11th floor light plus the west windows are worth a great deal more than the same footprint without the windows on much lower floors. I also mentioned timing up top. For #11C, timing is like the proverbial bear: when you walk in the woods, sometimes you get the bear, sometimes the bear gets you. The #11C sellers ‘got the bear’, finding that The Market valued their loft at $1.85mm. Their sellers had a very different experience only two years ago. You could say that ‘the bear got them’, or you could say there was …

… blood in the water in 2009
You won’t need color fonts to see the blood, even in a cold recital combining the listing histories of the last two sales of loft #11C:

The 43rd President could see what happened to the 2009 owners of #11C, though he might not be able to pronounce it. Those wintry conditions that hit the overall Manhattan residential real estate market in the Fall of 2008 were still in gale force when #11C came to market that calendar winter. Although there were signs that the overall market was beginning to thaw by the summer of 2009, that was not true for these sellers, who were not subtle about their awareness that they were being squeezed by The Market. I generally omit the CAPS in broker babble, but the shouting is relevant to their late-stage marketing campaign:

PRICE JUST REDUCED! THE SELLER IS READY TO MOVE ON, SO COME MOVE IN ON THIS INCREDIBLE DEAL! CAN’T BEAT THE LOCATION AND VALUE!

outlier math
I would love to know what it was that motivated those October 2009 sellers so much. No doubt, the bear got them. But there are two sides to every transaction, and the sellers last month definitely got the bear in October 2009, paying $1.4mm then and selling for $1.85mm now. Does anyone think that The Market has moved 32% in the last 19 months? Not Manhattan Loft Guy. But that is what these data points show for this one loft.

cold comfort
Look again at the original sponsor sale price for #11C and you will see what cold comfort there was for the October 2009 #11C sellers. (If you don’t have the patience to scroll up, here’s the punchline: the October 2009 sellers at $1.4mm paid $1,338,998 in March 2005. So they were still ‘ahead’ in Manhattan real estate when they fled 43 East 21 Street, just not very much.

And not very far ahead, considering where (at least one of) those sellers came from. The miracle of search-by-owner on Property Shark reveals that the guy sold a Yorkville apartment to buy from the sponsor at 43 East 21 Street. He had some equity to work with, having sold in April 2004 for $965,000 and bought in November 2001 for $733,500.

The notice address of those bear-gotten October 2009 sellers is a small town in far northwest Connecticut. Not knowing anything about Greater Berkshire real estate values, I suspect that whatever money they had left went pretty far up there. (One more digression and I will stop. Promise.) And they almost certainly did have equity left over, as I found in looking for their original mortgage on The Shark. They put two mortgages on #11C in March 2005, totalling $1,118,000. Less other expenses, there is still some equity between the mortgages and their distressed sale at $1.4mm.

How could you not feel their pain?? I, for one, am glad to see they had some cash in a bag to take to Connecticut. I promised to stop now, so ….

© Sandy Mattingly 2011