market corrects an over-correction on price of quintessential Hohner loft at 475 Broadway

funny how that works
The November 20 sale of the “1,925 sq ft” Manhattan loft #4E at 475 Broadway (Hohner Building) shows up on the Master List of Manhattan Lofts Sold Since November 2008 as an above-ask sale because … well … because it sold above the asking price. The final chapter of the marketing history has that happy ending (asking $2.95mm since September 13, in contract by October 5, and closed on November 20 at $3.01mm). But the earlier chapters show that the loft had been offered since April 17 until September 13 at $3.2mm, obviously without finding a buyer. Although it sold at only a 6% discount to the long-time ask of $3.2mm, the loft did not sell until dropping the price to $2.95mm; and, of course, it then sold quickly.

if the 2 was magic, it did not last
This is the kind of history that drives efficient market fans crazy. A price that is (only) 6% too high for 5 months does not attract a deal, but a single price drop did the deal in 3 weeks.

I have to wonder if it was all about the first number. A buyer with a hard ceiling of “under $3mm” might not even look at a loft at $3.2mm (I would, but that’s a different story). Suddenly, on September 13 to be precise, the unattainable loft that had been $3.2mm became available at $2.95mm. Somebody went after that almost immediately as a listing under $3mm, and probably more than one set of buyers. In the event, somebody felt compelled to offer more than the asking price to stop someone else from buying.

If I am right about the potential for a price like $2.xxmm to open the loft up to a new pool of buyers, the irony is that it closed with a price that starts with a 3.

history as a (misleading) guide
It is not hard to guess how the opening price for #4E was derived in April, as the very similar loft upstairs at #6E went into contract on XXX and closed on May 7 at … $3.2mm. I used that sale as the fulcrum for a discussion about looking at past histories of lofts as a distraction in considering present values in my May 23, 2012, playing with 475 Broadway loft comp that is up +58% over 2004. Though I snarked about some of the decor (“Personally, I don’t view wainscotting and crown moldings as “improvements” in a classic Soho loft [it looks rather UES to me], but to each her own”), but that loft was done. (I also used that #6E sale for a rant about square foot measurements; you should probably only read my June 26, 2012, how to make sense of 475 Broadway loft sale, at $1,280/ft or $1,608/ft??, if that is also a subject that bothers you.)

I am going to guess that loft #6E was rather more done than #4E. from the difference in enthusiasm and detail in the broker babble as well as in the finish details in the photos. But there was a reasonable argument about value parity to be made, I guess, based on #4E’s “modern, tasteful renovation”. It’s just that The Market rejected that argument.

fraternal, not identical, twins
The contrast between these two lofts, separated only by loft #5E, is fascinating. While #4E is a proud member of Team Quintessential (even though it mixes classic loft elements with minimal elements; notably, the kitchen), #6E is the downtown captain of Team Prewar (Apartment), with the snarkable “wooden inlays, wainscoting, crown moldings” and other elements from the uniform you’d see 4 miles north on Park Avenue. The contrasting kitchen pictures tell that story, though not as well as the contrasting living room photos.

If one sign of a sophisticated loft is that it comfortably sleeps all the adult residents in the same bed, then loft #4E qualifies. The Long-and-Narrow footprints of the two lofts are identical, but the floor plans differ. The #4E floor plan shows lots of places to sit, with a master suite that includes a “sitting area” and a den into which guests and children can be stashed, but which lacks a window. The #6E floor plan is rather similar, but uses that “sitting area” as a second bedroom, and takes advantage of a window on the long north wall to change the #4E den into a #6E third bedroom.

One of the hallmarks of a classic Manhattan loft that has permeated the general Manhattan residential real estate market, for better or for worse, is the open kitchen. Classic (prewar) “apartments” tend to have closed kitchens; lofts and modern hybrids tend to have open kitchens. I can’t tell from the #6E pix and plan if there is a pass-through in that kitchen, but if there is that would be inconsistent with the overall feel of this loft-as-apartment; it certainly appears as though the kitchen is open only to the gallery leading back to the private space in #6E. In other words, the only way to see into the #6E kitchen is (probably) on purpose, walking in to it or passing by.

The #4E kitchen is classic loft kitchen, fully open to the loft, with an entirely different feel from the materials in the cabinets and counters (sleek and [yes] “minimal”, compared to the traditional materials in #6E). And note one other floor plan difference: #4E has a much longer kitchen and two full baths, compared to the utilization of all those plumbing stacks in #6E to squeeze a full third bath behind that smaller kitchen.

Net-net: #4E and #6E would appeal to different buyers, both because of the diametrically opposite finishes and because of the different utilities (sitting area + den vs. 2nd and 3rd bedrooms; huge open “entertaining” kitchen vs. contained traditional kitchen + 3rd bath). In this paired competition, Classic Prewar (uptown) Apartment clearly won over Quintessential Soho Loft.

I grieve.

© Sandy Mattingly 2013