conjuring value / 11 W 20 St leaves the envelope behind

looking for comps, value, prices
The 8^th floor at 11 West 20 Street is a “2,300 sq ft” “spectacular” loft that is new to the market this week, asking $2.85 and $2,123/mo (condo). This is a 25 foot wide Long-and-Narrow with some plumbing (but no windows) on both long sides and classic loft features (high ceilings, big windows, exposed mechanicals, vaulted ceiling). The baths are “spa-like” and the kitchen is “top-of-the-line”. But there are only three photos.

When I looked to see if other units had been on the market recently, I first saw the 5^th floor, which sold in January. Also offered by PruDE; also “spectacular”; also barrel vaulted; this kitchen has professional appliances; indeed, that whole thing was not only in “triple mint condition” but was “magnificently renovated”.

So I thought that was a useful comp.

It took from April 2006 to September for the 5^th floor to get a contract, with one price drop from $2.25mm to $2.125mm before closing at the $2.125mm asking price in January this year.

So then why is the 8^th floor on the market at $2.85mm, I wondered.

is the 8^th floor that much more valuable than the 5^th?
Before I did too much to figure out whether there are significantly better views or light from the 8^th floor than the 5^th I looked at the 8^th floor’s history.

a very good comp
Turns out that this unit was sold in February this year, just 3 weeks after the 5^th floor. We’ll get right to the punch line here, then work back …. This unit closed 9 months ago for $2.15 – only $25,000 more than the 5^th floor had just closed for.

The history on this unit is a little confusing, but it appears that it went to contract within 3 days in December 2006 at a 5% discount off its asking price of $2.25mm.

I don’t see any building permits issued on this unit, so it is very likely that it was as spectacular last December when it went into contract at $2.15mm as it is now, offered for sale 33% higher.

Anyone buying this and planning a large mortgage needs to be concerned that this unit may appraise closer to its February 2007 sale price than its November 2007 asking price.

another year, another sale
I scrolled back just a bit further in city records to see that this unit also changed hands in June 2004. That time it had been offered for sale from December 2003 before going into contract in May 2004 (after 2 price drops from $1.85mm) and closing in June for $1.6mm.

I suspect (but do not know) that it was as spectacular then as it is now. From that closing 29 months ago, the current seller thinks someone else will think that it has appreciated 50%.

because I say so
I have noticed several lofts over the last few weeks that are priced at levels that are difficult to justify based on past sales in the same building (none quite so stark as this one, with a past sale of this unit).

Sometimes sellers and agents assign a real stretch price and they find a buyer in that neighborhood. When that happens it is hard to argue that The Market Price was something different from what that willing buyer paid for it. For that right buyer, there might be a perfect combination of geographic desirability (by their own personal social map), finishes that matched his/her tastes, otherwise the right emotional attachment to a space, plus – this is sometimes the critical factor in such sales – a fear that someone else would buy it out from under them.

So maybe the act of claiming that the 8^th floor is worth $2.85mm will help them get a clearing price in that neighborhood. That’s a whole lot of maybe, but maybe it’s a start.

© Sandy Mattingly 2007