the vultures next door / 505 Greenwich sells to neighbor

seemed like a good idea at the time (2008), no?
Take a photograph of the folks who just sold the Manhattan loft #8C at the 2005 new development 505 Greenwich Street and put the photo in the gallery labeled We Rue The Market.

When they came to market in October 2008, their neighbors upstairs had sold #9C eight months earlier for $1,398,257 to a unique buyer (more about that in a minute) and #4C was sold just two months earlier at an even higher price than #9C, $1.42mm. But then Lehman happened, and they drew the wrong lesson from the #4C sale.

Prudence, meet imprudence
Instead of pricing right around the #4C clearing price of $1.42mm, the #8C sellers came to market on October 30, 2008 at $1.595mm. Since the building was brand new in 2005 and the listing descriptions of #4C and #8C are almost word for word the same, these two "979 sq ft" new "lofts" were identical except for the 4th vs. 8th floor light and view angles.

The post-Lehman market did not value the 8th floor light/view angles as worth 10% more than the 4th floor. By the time the #8C sellers dropped the price in March 2009, the nuclear winter conditions for Manhattan real estate had set in, so the below-#4C asking price of $1.395mm was no more successful than the old price had been.

As the birthday for the listing approached, they tried one more price drop in September 2009 (to $1.345mm) but by then they had a ‘tired’ listing and — still — no takers. They must have been pretty discouraged when the listing finally expired in late October.

CD combos
Remember that #9C sale in February 2008? That sale was probably viewed by the #8C owners as not as good a comp as the #4C sale because (a) it was a little older than the #4C sale, and (b) #9C sold without being listed, so was never exposed to the full market. #9C sold in February 2008 to the people who owned #9D, the "2,404 sq ft" unit next door. Turns out that the #8D owners had a similar idea. I’d be very curious to know when they first broached the idea of buying #8C.

small beer
Whether the #8D neighbors approached the #8C (unsuccessful through 2009) sellers or vice-versa, the #8D neighbors bought #8C on May 7, 2010 in a "no listing associated with this sale" transaction. This sale is well outside the time period that the former sales agent for #8C would have had a claim for a commission, so the #8C sellers "saved" a brokerage commission.

That would not have been very comforting, as the #8C sellers otherwise got killed on this sale: the trading price of $1.14mm was (a) almost 30% lower than their October 2008 asking price, (b) 15% lower than their last asking price in October 2009, (c) 20% lower than the clearing price for #4C in August 2008, and (d) 9% lower than the $1.25mm that they paid for the unit in March 2005. Ouch.

insult, meet injury
With this litany, it is piling on to note that these May 2010 sellers appear to have been the first resale buyers in the building, as their seller in March 2005 owned the unit for all of 7 weeks when he flipped it. That original owner paid only $834,965 before flipping for $1.25mm.

It must have looked to them then as a hot building. Such is life.

© Sandy Mattingly 2010