maple beats oak, handily, and 9th beats 10th, as 21 East 22 Street loft close up 26% since 2007

neighbor, not so handy
For fans of neighbor-on-neighbor competition, it does not get much better than this. Two Manhattan lofts with identical footprints that share a ceiling/floor come to market in “stunning” condition or better within a few weeks of each other, both get contracts quickly with very small discounts from ask, yet one closes 8.6% higher than the other, and much higher than its last sale in 2007, while the other sells well below its last sale in 2005.

quick sale + small discount = happy seller, right?
The less-appreciated Manhattan loft is the “950 sq ft” #10F at 21 East 22 Street, which (I am reliably informed) cleared at $985,000 on June 28 in a deed that has not yet been filed. The marketing campaign was quick and successful, by all reasonable measures: out at $995,000 on March 2 and in contract by April 1 at the tiniest round number discount from ask (an even 1%, in fact).

The loft was enthusiastically babbled:

Stunning one bedroom loft with soaring beamed ceilings, huge windows, and northern light, in prewar doorman co-op, featuring gorgeous designer bath and chef’s kitchen with top of the line appliances, dreamy and enormous walk in closet and superb attention to detail throughout.

StreetEasy lacks any interior photos (I hate when that happens) in the current listing but the ones in a prior listing support the enthusiasm. The place is all about the light, as the bedroom walls are sliding glass and the palette is dominated by white and stainless. The main room is a large and well-proportioned (and light!) near 23×17.

a hyper-local bubble in 2005?
Based on subsequent events (below), these “happy” sellers must have overpaid in 2005 at $1.295mm. But they were not the only ones. I will fall into another digression trap if I pursue this much, so I will simply note that the larger (“1,100 sq ft”) loft next door sold four months before #10E in 2005 at $1.31mm, a huge premium to ask. It was also in no-detail-overlooked condition (the listing does not survive on StreetEasy, alas) but also boasted Madison Square, Empire State. and Met Clock views, some justification for $1,191/ft. The recent #10E “happy” sellers paid $1,363/ft, without the views. O. U. C. H.

These “happy” sellers must have been frustrated that they could not cash out even at a loss just after The Peak. They were not off much in terms of timing, and should have been priced right (in relation to their 2005 purchase, certainly), but look what happened to them in the quarter following The Peak and on into the nuclear winter that settled over the overall Manhattan residential real estate market with the Lehman bankruptcy in mid-September 2008:

Dec 8, 2005 sold $1.295mm
June 13, 2008 new to market $1.195mm
Sept 29   $1.095mm
Dec 8   $950,000
Feb 19, 2009 off the market  

They did just about everything right: came to market below their 2005 purchase price, then dropped by six figures two weeks after Lehman, then again within ten weeks. The Market is The Market is The Market, and they missed it. Long after the fact speculation is free, and i have to think that if they had advanced this sales effort 90 days they would have caught the last wave of buyers before Lehman crashed the party. But: they didn’t, and it did.

Chastened by that experience, they came back to market six months ago willing to take a big hit on their purchase. The Market accommodated, of course. I have to wonder (rude though it may be) if the folks downstairs proved that they left some money on the table.

is it the bedroom, Mars?
It is (past!) time to get to the star of this post. The Manhattan loft #9F has a different floor plan for that same footprint, carving a good-sized bedroom out of the front corner, with babble that is hardly more enthusiastic than the #10F babble:

renovated loft. 950 s.f. featuring 2 beds and 1 large bath, original wood floors, nearly 12ft ceilings with exposed, original concrete beams. Open stainless kitchen with top of the line appliances. Custom lighting and maple cabinetry. Amazing volume of storage throughout. The innovative design elements are by Jonathan Schloss Architect.

Innovative design elements aside, the main difference between the lofts as built out is that added bedroom in #9F. Maybe there is more value hidden in those innovative design elements than you’d think (than I’d think), but The Market valued the extra bedroom and innovative design elements in #9F at a premium of $85,000 over #10F, in direct competition. The full history of that competition:

#10F   Mar 2 new to market $995,000
  #9F Mar 25 new to market $1.095mm
#10F   April 1 contract  
  #9F May 7 contract  
#10F   June 28 sold $985,000
  #9F Aug 8 sold $1.07mm

Granted, the direct competition was not long, but I have to assume that whoever signed that #10F contract on April 1 was aware that #9F had come out a week earlier. And #9F would appeal to the 2-bedroom-layout-NOW market, which #10F would not.

But the fact is, the two lofts with ‘stunning’ and/or ’innovative’ design were out at the same time, and closed $85,000 apart. Do you see what I wonder (unfairly, I admit) if the #10F sellers priced to too low (left money on the table)?

2007 numbers, with 2006
The recent #9F sellers paid $850,000 for the loft on June 27, 2007 before doing that ‘innovative’ renovation. The babble for that sale was pretty restrained (key: “renovated kitchen is spacious and has oak custom cabinetry with a breakfast bar”), but the floor plan (that you can’t see, darn) shows a rather different 2-bedroom layout than in the just-sold version, which, among other things, has maple cabinets.

Their sellers, bless their hearts, paid attention to the #10F and #10E sales in 2005 (above), and started out asking $1.125mm in October 2006 before quickly dropping twice ($995,000 and $880,000) before signing up these folks in April 2007 at $850,000 — within a year of the top of the overall Manhattan residential real estate market.

I doubt that the #9F buyers-in-2007-turned-sellers-in-2011 (and renovators in between) put more than $200,000 into the “950 sq ft” space. But they just received $220,000 more than they paid for it four years ago.

In pointed contrast to their neighbors directly above, of course. Rather than starting another rue party for them, I will close….

© Sandy Mattingly 2011

Tagged with: , , , , , , ,

Leave a Reply