stubborn loft seller wins at 21 East 22 Street

Conventional Wisdom takes another hit
Each deed is a fact, but each fact does not necessarily fit a coherent narrative with broader application. Have I lost you yet? A deed filed on April 12 recorded as fact that A Woman sold the Manhattan loft #5E at 21 East 22 Street on March 29 to A Guy for $900,000. The listing history shows that the loft was first offered for $950,000 on June 4 and held steady at that price (with a one-month hiatus and a change in firms) until finding a contract by January 18. 

The Conventional Wisdom is that a listing exposed to the market for more than a couple of months without getting a positive response (i.e., a bid) is over-priced, so requires a price drop to attract a bid. This analysis is so conventional that even four out of five dentists surveyed would come up with the same answer. In this case, however, the fifth dentist* turned out to be right.

This loft was marketed for a full six months at $950,000 yet found a buyer willing to spend nearly 95% of that original (sole) asking price. There’s a very likely explanation, but it will wait until the loft is described.

light and white
This loft is too small at “1,000 sq ft” to be a ‘classic’ Long-and-Narrow, though it is as wide as many classics of the genre, at 22 feet. Not having seen it, I can’t cop to the “serene, near-magical quality” but I wholeheartedly agree that the 12 foot ceilings and that 22 foot wall of windows provide (essnetially, for babble) “perfect proportions”.

A lot of light comes through those north-facing windows and the sense of light is enhanced by having everything in the loft white, except for the (light natural) finish on the floors: not just the walls and ceiling but the “kitchen [with] white carrera counters, top appliances [some are white!] & meticulously-crafted [white!] cabinetry” and the “spacious white-on-white bath”. The seller had a lot of white furniture, as well.

I wonder if there used to be a good view (or better light) north out of the 22 feet of windows, but I am not sure where in the north face of the building the “E” line is, or exactly where the monster One Madison Square is in relation to these windows. There are vague details of a building close out thoise windows in the second, curiously washed out, photo.

This loft is also too small to be a classic One Bed Wonder, as there is nothing surprising about having only one bedroom sleeping area in a 1,000 sq ft loft. The babble on that bedroom sleeping area is a bit odd though (“[t]he bedroom has been expertly positioned to afford privacy without detracting from the home’s elegant aesthetic”), as it has merely been “positioned” in the least obtrusive place to best maintain the sense of ‘space’. Not sure you need an expert for that. Note on the floor plan the subtle shading difference in the darkness of the “walls” of this “bedroom”, then note in the third pic that the “walls” don’t reach to the ceiling. This is a loft best utilized by one person, or by two people with the same sleep schedules (and a quiet dishwasher).

new buyer, or newly motivated buyer
I just had this conversation with potential sellers yesterday. There are lofts that sell off old asking prices, usually to a buyer new to the market, or to a buyer who has been abused by the market (lost a bidding war, often, or seen too many interesting choices snapped up by other buyers). Conventional Wisdom is, of course, that buyers who rejected this loft at (within negotiating distance of) $950,000 from June into December should continue to reject it in January. But somebody made that $900,000 deal in January.

(I won’t digress — here — on the risks of a pricing strategy based on “it only takes one [buyer]”, but it worked for #5E).

seller was right, of course
In this instance, the seller was proven right by a buyer who paid about 95% of the asking price. But the buyer had reason to be stubborn, as the last two lofts in the building closed above the $900/ft that #5E got. Loft #6A closed on December 21 at $985,000 for “1,050 sq ft” that was said to be renovated in a way comparable to #5E, but with the benefit of a real bedroom (not just a window, but floor-to-ceiling walls). At a time when #5E was languishing on the market, #6A roared through: to market on October 4 at $995,000, contract by October 22 at $985,000. That is enough of a ROAR to give a seller of a comparable unit hope that her ship might come in.

The more interesting case might be the smaller loft #2H, which sold on February 11 for $826,000. That is also a true 1-bedroom but is the smallest of the three, at “850 sq ft”. This one had a bit of a tough time, starting at $925,000 on April 4 last year, dropping to $875,000 on May 11, and $849,000 on July 10. No market traction, right?

With both a change in price to $799,000 and a change in firms on October 19, this one had a new lease on life: contract by November 11 at $826,000 (yes, a 3% premium over the asking price). That clearing price of $826,000 is only a 3% discount from the July-to-October asking price, a 5.6% discount off the May-to-July asking price, and a 10.7% discount off of the original and short-lived asking price of $925,000. In other words, if it was not within reasonable negotiating distance from the get-go, it certainly was for six months before the contract.

(I will come back later [much later] to add the links to #6A and #2H, as I am tired of waiting [and waiting] for StreetEasy to come back on-line; the “maintenance” is taking much longer than 5 minutes.)

*the fifth dentist
I may have to elevate The Fifth Dentist to a more prominent role in posts about outliers and conventional wisdom. (For those too young to remember the Trident ads, here’s one from 1971.) That’s a handy reference for the fact that things that usually turn out a certain way don’t always turn out that way. Note to self…

© Sandy Mattingly 2011