the stuff you can't see earned 7th floor loft at 15 West 20 Street a 13% premium over 8th floor
(I can’t see them, either)
Did the hyper local Manhattan loft market in one Flatiron 2005 era new development improve by 13% in … (wait for it) … 6 days? Sounds ridiculous, right? Well, the “2,259 sq ft” Manhattan loft #8A at 15 West 20 Street (Altair 20) sold on November 13 for $2,562,500 after a contract was signed by August 25, and after testing the market since March at 3 higher prices, yet the seemingly identical “2,259 sq ft” Manhattan loft #7A sold on November 7 at … (wait for it) … $2.895mm after coming to market on August 24 and finding a contract by August 31. And by “seemingly identical” I mean two lofts with identical floor plans (#8A here, #7A here) that were built out to a high standard by the 2005 developer, that were marketed with broker babble promising equivalent levels of finishes, and the pictures of which show (to my eye, at least) identical finishes and materials, though some palette choices vary.
My head is spinning over this $2,562,500 and that $2.895mm. How could a seller persuade a buyer to pay 13% more than the neighboring loft contracted for within a week?
One obvious response is that the high buyer did not necessarily know what the low buyer had agreed to pay. But this price history makes it plain that the first contract almost certainly was at least $200,000 below what the second buyer agreed to pay:
|#8A||Mar 27||new to market||$2.775mm|
|#7A||Aug 24||new to market||$2.895mm|
Any rational reading of the market from April well into August is that the market did not contain a buyer willing to pay $2.9mm or $2.795mm or even (probably) $2.695mm for a 2-bedroom plus home office plus 3 bathrooms in this still new condo, despite #8A being enthusiastically and specifically babbled about like this:
Perfectly designed… in a prewar 1904 loft building. Sunlight from two exposures and 10-foot ceilings …. burnished hardwood floors, open dining area, and a stone-clad working fireplace. The Valcucine kitchen features custom cabinetry, appliances from Sub-Zero and Miele, and special touches like warming drawer, built-in coffee machine, and pot-filler. … master bath is particularly well-appointed with imported stone, oversized glass shower, built-in flat-screen TV, radiant floor heat, and private W.C. Generous closets, multi-zone central climate control, and a separate laundry room
On August 25, perhaps knowing that the #8A owners were very close to a deal, the #7A seller came out at a price that had been rejected for #8A for 5 months. I see the word “customized” in this babble, but I don’t see any particular thing that is different in #7A than in #8A:
Brilliantly designed, this stunning, customized 2-bedroom plus home office is turn-key and ready for the most discerning buyer. As you walk off of the key locked elevator directly into the residence, you will be welcomed by natural light beaming throughout this beautifully appointed home. The 10-foot ceilings create a spacious and open environment. This residence includes three full bathrooms and a full-service kitchen both complete with the finest materials. Additional amenities in the home include a working fireplace and laundry room.
Of course, you know that #7A got that “rejected price” in 6 days. (In case you wonder if StreetEasy’s dates are correct, like I sometimes do, the interfirm data-base proves it: new listing on August 24, open houses immediately set for August 29 and September 2, and the contract by August 31.)
there was some fresh relevant public data
You see that last #8A price drop to $2.695mm? Here is what the seller almost certainly knew before dropping that price:
The #2,322 sq ft” loft #4B, with a floor plan that is essentially identical to the two “A”s, sold for $2.715 on July 25. If the #8A seller did not know by July 31 the price at which #3B was in contract, that sale closed on August 2 at $2,665,800.
(I say “almost certainly knew” because even though the respective deeds were not filed [“public”] until after #8A went into contract, it is a commonplace courtesy among agents to share clearing prices on closed sales not yet publicly filed.)
Needless to day, the fact that two “B”s had closed within about a week of each other at $1,169/ft and $1,148/ft almost certainly convinced the #8A seller to come down to $1,193/ft from $1,237/ft to troll for buyers in August. (I say “almost certainly” because I often temporize, but isn’t this connection too obvious for words?) In the same vein, these highly relevant (same-building, same layout and utility, contemporaneous) data points probably helped the #8A seller accept $1,134/ft as the best he was going to do in a hard fought negotiation with a stubborn bidder (note that telltale $500 in the #8A sales price).
These three sales are very easy to rationalize; indeed, the give faith and succor to rational market fans.
In that context, #7A selling at $1,281/ft is insane. Put more prudently, #7A is a dramatic outlier; so dramatic as to drive rational market fans insane, in fact. (I am not so much a rational market fan as a believer in rationality and market noise, but I appreciate these dramatic outliers at least as much as the next guy.)
a final wonder
I am not certain which conversation I would have liked to have overheard more: when the #8A seller found out where the #7A deal was, or when the #7A buyer found out where the #8A deal was.
© Sandy Mattingly 2012