did virtual staging cost 9 West 20 Street loft $100,000?

rather: is there a theory that explains an anomalous spread?
At the risk of over-determining this apparent paradox, the very recent (January 31) sale of the “2,154 sq ft” Manhattan loft on the 7th floor at 9 West 20 Street at $2.5mm calls out for an explanation, given that what appears to be the same loft in the same condition immediately below sold for $75,000 more only 5 weeks earlier. On the one hand, The Market preferred the 6th floor unit to the (only) slightly higher floor unit; on the other hand, at this scale the spread is only 3%, so possibly mere market noise. Readers know that Manhattan Loft Guy is not one to shy away in the face of possibly over-determining apparent paradoxes, so let’s look at the joint histories, then at what we know about the two lofts (less than what we’d like, but we probably know ‘enough’).

The joint history starts with the fact that this building was converted to condominium lofts in 2002, with the lofts sold with the same basic level of (for its time) high-end finishes. The sponsor sale prices are included, as they imply that the units were identical when sold then:

June 20, 2012 #7   new to market $2.75mm
Sept 21 #7     $2.595mm
Oct 23   #6 new to market $2.675mm
Nov 9   #6 contract  
Dec 7 #7   contract  
Dec 24   #6 sold $2.575mm
Jan 31, 2013 #7   sold $2.5mm

These neighbors went head-to-head, if only for a short time. And only for a short time because the 6th floor zoomed through the market in 17 days, though asking a (slightly) higher price. Can we assume that every potential buyer for the 6th floor was aware that the 7th floor was being offered for sale for less? (Yes we can.) Can we assume that the 7th floor seller would have happily taken a $20,000 discount to strike a deal any time after September 21? (Yes we can.)

fools, rushing
My rational side insists there has to be a reason why the first buyer of this pair preferred one to the other. That side also has trouble figuring out a rational reason. It may have to do with demolition costs (and bother).

You have to go to the Corcoran site to see the current 7th floor floor plan (StreetEasy has only an alternate plan.) Note the 4 bedroom layout (especially, the dimensions of the bedrooms along the east wall) and the (mostly) closed dining room. You have to go to an earlier listing to find the 6th floor floor plan. Note the different bathroom array, the (more efficient) 3 bedroom layout in the back of the loft, and the (larger) open kitchen.

One theory is that the $75,000 premium in favor of the 6th floor is due to the market preference for a more open kitchen and dining experience and for 3 bedrooms rather than 4. That bedroom issue seems especially counter-intuitive, but the fact is that the 7th floor was marketed with an alternative 3 bedroom proposal.

Another theory is that the 6th floor ‘showed well’ (in industry parlance) while the 7th floor was shown as empty, a generally more challenging visual puzzle for many buyers. There is nothing ‘wrong’ with the 7th floor loft. It has significant utility in the “2,154 sq ft” footprint, with 4 bedrooms, 2 baths, central air, a washer-dryer and a dining area. The photos support the babbling about finishes (“huge chef’s kitchen … luxurious limestone baths”). But it was empty. The virtually staged photos help a web viewer (some), but not someone standing in the loft in real life.

In contrast, the 6th floor (seen here in that earlier listing) has similar utility (3 bedrooms, 2 baths, central air, a washer-dryer) but marble rather than limestone baths and some “custom built-ins”. The small format photos are hard to ‘read’, but they don’t make an obviously stronger impression than the 7th floor photos, apart from the fact that they show a lived-in loft. Perhaps the 6th floor has a more luxurious feel due to things like the built-ins; no way for me to tell from the outside.

A third theory for the 6th floor premium is that it was not so much that the 7th floor did not show well empty as that an empty loft suggests a more desperate seller. This does not explain why the 6th floor buyer would have bought the 6th floor first, at a price certainly available to any 7th floor buyer, or why the 6th floor buyer would not have bought the 7th floor at the eventual 7th floor clearing price. In short, I don’t like this theory, but throw it out there because I am intrigued by the Empty Loft implications….

Finally, I read this same-building, same-footprint, same-quality head-to-head competition as suggesting that the 3-bedroom market is deeper than the 4-bedroom market, which is another way of expressing my first theory above. Obviously, this theory is capable of being tested empirically, but not by me with a limited loft data set. For a buyer who only needs 3 bedrooms, the 6th floor layout is a much more efficient use of space than the 7th floor, either as sold or with the proposed alternative. (Look at what a difference it makes whether the two bathrooms are adjoining, as on the 7th floor, or opposite, as on the 6th; fascinating ….)

Only the 6th floor buyer knows. The rest of us can guess.

unfortunate babbling snippet of the day
Agents don’t change the text of their listing descriptions often enough, there’s no doubt about that. The 7th floor babble contains an unfortunate and prime example of text that should have been changed on … oh … October 24 (the italics are mine, in case any readers are working with slower President’s Day holiday brain speeds today):

Unbelievable and unmatched value in Flatiron, Manhattan’s hottest and ultra-chic neighborhood. This is a fantastic and unique opportunity to purchase an entire floor of this beautiful, pre-war, boutique condominium, just off Fifth Avenue.

MLG history, on a day for US history
Sharp-eyed Manhattan Loft Guy readers will remember that I hit the prior loft to sell here in 2012, in my Jun. 22, 2012 – 2nd floor loft at 9 West 20 Street beats well-dressed 5th floor loft from 2010. That post reveled in two 2-bedroom configurations of this Long-and-Narrow footprint by including the 5th floor sale in September 2010, and went back to the three lofts with the highest sales prices in the building, up to the current date, leading up and and at The Peak of the overall Manhattan residential real estate market. Which is a perfect segue for ….

anomaly of the day, circa early 2008
The 6th floor did not sell when offered at lower prices right at The Peak:

Feb 14, 2008 new to market $2.499mm
May 7   $2.399mm
June 17 off the market “temporarily”  

This makes these sellers among the very few owners who were fortunate not to sell in early 2008 but who eventually sold.

The 6th floor presents anomaly upon anomaly. Kinda like celebrating President’s Day on neither the 16th president’s birthday nor the first president’s birthday. Enjoy the day!

© Sandy Mattingly 2013

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