255 Hudson Street loft sells 19% below 2007, after 15 months, 9 prices
and now for something completely different
Ever get tired of reading about how hot hot hot The Market is? I don’t, but the recent sale of the “1,684 sq ft” Manhattan loft #6A at 255 Hudson Street in “Soho” (I’ve expressed my preference that this little corner be dubbed The Greater Ear Inn Micro-Nabe [TGEIMN™] before) may be a tonic for some, a respite for others, or just plain weird for the rest of you.
Even in an overall Manhattan residential real estate market that is overheated, it takes a willing seller and a willing buyer to make the market; if the seller, though willing, is not realistic about value, no buyer will be willing. For example, a seller who thinks a loft is worth, say, $3.1mm may be out there a while, and have to adjust a lot, to find that the clearing price (by definition, the market value) is only $2.5mm. Even in a frenzied “seller’s market”. Even if the seller had good reason to think the value was (around) $3.1mm.
|Feb 22, 2012||new to market||$2.925mm|
|Mar 18, 2013||$2.675mm|
(*Personally, I doubt that the last price drop was real, in that there was almost certainly an accepted offer already based on the contract date, but that sequence is also in the inter-firm data-base so I am going to go with it here, and in the Master List of Manhattan Lofts Sold Since November 2008.)
You know this from the headline, but to recap: that is 15 months to contract and 9 asking prices. The discount from highest ask to clearing price: 19%. Market time until the first price drop: 5 months. Price drops in the last quarter of 2012: 4.
That last datum is interesting, as you can almost smell the seller’s desperation. After stubbornly sitting at $3.1mm for those 5 months, and then at $2.999mm for another 2.5 months, the seller came up with a cosmetic price drop and then a series of 5-figure price drops. Death by small cuts. Remember: this was in market conditions universally (and correctly) described as dramatically tilted in favor of sellers. A whiff of “desperation” should not matter in a deep market, as there should be enough buyers that one would recognize a price cut too deep, though in this case The Market seems to have punished the loft.
was 2007 an outlier?
I say that The Market seems to have punished the loft for the same reason the seller thought the thing was worth $2.925mm or more: the recent seller paid $2.925mm to buy it on December 14, 2007. That so-near-as-to-be-essentially-Peak value is impossible to reconcile with the June 2013 value, so I am not going to try. (The 2007 StreetEasy listing history is incomplete, but I will not bore you with the details except to note that the inter-firm data-base shows this loft was actively marketed until a contract on October 31, 2007, with asking prices oddly and quickly bouncing from $3.125mm to $2.445mm and back; the deal was reached off that higher number.)
It is hard to conclude that The Market picked out loft #6B for punishment, as at $1,485/ft it dramatically out-performed the smaller (“1,407 sq ft”) 2-bedroom, 2-bath #6A next door, which sold at $1.71mm ($1,215/ft) after a very long time on the market. One-bedroom units have sold in the building at $1,476/ft on April 2 and at $1,432/ft on November 8, 2012; these are the only non-townhouse sales in the building in the last 12 months, with no evidence of #6B being punished here, either.
The recent seller of loft #6A was wrong about the market in 2012 and 2013, just as he was wrong about the market in 2007. I have no way of knowing whether there was another buyer interested in #6A in late 2007, but I do have a way of knowing that the $2.925mm purchase on December 14, 2007 was an outlier for its time: a quick scan of the Streeteasy building page tells me that this was a building record on a dollar-per-foot basis for non-penthouse, non-townhouse properties, and there’s this: the identical loft upstairs at #7A sold on December 21, 2007 for $2.6mm. Or, take the identical loft above that: #8A did not sell in 2007 while asking $2.775mm and $2.695mm, or in early 2008 at $2.6mm.
Hard cold fact: the corporation that just sold #6A at a significant loss did so because it overpaid in 2007, not because the market punished it in 2013. O. U. C. H.
© Sandy Mattingly 2013