Lion's Head loft sells above ask after changing firms

Trust me: nobody cares about how real estate agents do other than real estate agents. The recent sale of the “1,511 sq ft” plus “170 sq ft” terraced Manhattan loft #2B at 121 West 19 Street (the Lion’s Head) looks to most folks like an above-ask sale. There’s that, of course, but to me it also illustrates how arbitrary and (yes) capricious The Market can be for agents. The first part of the story starts at the end: the loft was listed with Corcoran on July 8 at $1.399mm, went into contract by July 28, and closed on October 14 at $1.44mm. Obviously, after a bidding war. Apparently, a great (and quick) success. But wait … there’s more ….

The full recent listing history adds a longer story, with some ups and downs:

Feb 15 new to market $1.475mm
May 19   $1.425mm
June 1 hiatus  
July 8 change firms $1.399mm
July 28 contract  
Oct 14 sold $1.44mm

In an efficient and stable market, any loft that could sell for $1.44mm in October should have attracted serious bids within a few months of coming to market at $1.475mm, right? Apparently, did not happen. Note that the former agent and seller agreed on a price drop to $1.425mm, which was (a) below the contract price 10 weeks later, but (b) mooted by the loft going off the market within 2 weeks. I don’t know the terms of the original listing, but that agent had less than 4 months to sell, and priced ‘correctly’, yet did not get the sale.

Much as I would like to claim that a Corcoran advantage accounts for the different market reactions in July compared to earlier, that is not likely to be significant. (I do wonder if the stuck CAPS button in the first listing chased away buyers, but maybe that is just a personal peeve on my part, not shared by The Market.)

not a question of “fair” or not
That is the way the business works some times. An agent can do everything right with a listing (capitalization aside 😉 yet not get a typical 6 month period to attract a buyer, and the next agent comes in and gets an almost immediate contract above the last ask of the former agent. Great news for the sellers, nice work by Agent #2, and a doff of the cap to Agent #1 for selecting a price that could generate the highest price available in the market. Agent #2 gets the commission. Agent #1 has only the memory of the doffed cap.

up 49% over sponsor purchase in 2006
The recent #2B sellers were the original purchasers from the sponsor, having paid $967,337 on June 21, 2006, so they realized a huge gain by selling at $1.44mm 3 weeks ago. I was curious about other recent sales in this monster of Flatiron, wondering how the #2B sale (and appreciation) compares.

The loft next door was the most recent sale, a sale I hit in my September 2, raise the price to get the price, as Lion’s Head loft sells after oddly successful campaign. As it happens, that loft also did not sell at a price it should have sold for, and ‘needed’ a price increase to sell at the new asking price, despite also needing 115 days from the price increase to generate that contract. That Bright Shiny Object is a fascinating tale in its own right, but if I dwell on it further I risk Serious Digression….

For present purposes, suffice it to note that #2C sold by the sponsor on June 12, 2006 (a week before #2B) at $1,369,546. Ignoring the intervening sale, we see that #2C appreciated 57% in 5 years. #2B’s gain was ‘only’ 49%.

I would not read too much into this exercise, as there is not a standard for the building, by which to compare 2011-over-2006 gains. The last sale before #2C was #9F, with a much different post-sponsor history. Loft #9F sold on June 9 at $1.475mm, almost five years to the day after the sponsor sale (June 12, 2006 at $1,170, 987). That computes to a niggardly 5-year gain of 26%. (I hit that one in my July 6, Lion’s Head loft sale hits the number at 26% over 2006.)

I will not go further back than #9F, as I again risk Serious Digression, given that I have spent so much blog time in the Lion’s Head over the years (11 Manhattan Loft Guy posts before today are tagged “Lion’s Head”.)

So let’s go back to the beginning. Professionally, I feel for Agent #1 for the Manhattan loft #2B at 121 West 19 Street. I don’t see anything she did wrong (apart from THE DAMN CAPS) and the loft went into contract within 5 months of coming to market 2.4% off the first asking price and 1% above her last asking price. But she did not get paid. Consumers and Manhattan residential real estate market ‘fans’ (I am looking at you, StreetEasy commentariat) are tuning the world’s smallest violins to express their (lack of) solidarity with me. So be it.

It has got to hurt to be right, yet unrewarded.

© Sandy Mattingly 2011


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