73 Worth Street penthouse loft has a baffling price history

how bad was the 2009 market?
Sometimes when you look at sales history you can hear somebody being ground up in the gears of The Market, remorseless monster that it can be. Use a Rod Serling interior voice and consider, if you will, the sales history of the Manhattan loft #PH-A at 73 Worth Street, a loft that also sold on February 1, and imagine, if you will, the emotions of the June 2006 buyers turned September 2009 sellers, particularly when (if) they found out what happened 17 months later:

(You don’t see that February 1 sale price on StreetEasy yet; I will explain below.)

While not as extreme as the roller coaster ride at 345 West 13 Street (see my January 6 post) this quick sequence is an outlier compared to overall Manhattan residential real estate market trends. That June 2006 deal was about 7 quarters before The Peak, while there was still some significant upward momentum (Greenspan’s ‘froth’); the September 2009 clearing price was almost exactly a year after Lehman’s bankruptcy applied the coup de grace to a faltering market, plunging Manhattan into a nuclear winter.

Regular Manhattan Loft Guy readers know that I have often highlighted 2010 sales at prices that could not have been achieved in the thin 2009 market. Yet this 3-beat swing from 2006 to this month is remarkable. Does anyone think that the current overall market is up 30% since The Bottom?

confusion reigns in my brains
Having checked all prior listing descriptions, let me assure you that this loft is little improved over its sales history, with the same luxury features, layout, and proper proper names throughout. Thus, any change in market value is a function of The Market, not the condition.

Penthouse A is said to be “2,352 sq ft” and the largest penthouse in this Civil War era building, converted to residential condominium in a troubled process that began in 2002. The duplexed floor plan has the master suite on top of the living area, with not-very loft-y walls of glass opening onto terraces on each level (“832 sq ft” in all).

It is not so much the downswing from 2006 to 2009 that is confusing (although that trend direction simply feels wrong), but the dramatic upswing to the February 1 sale that is shocking. Compare that Penthouse A history above to Penthouse E, which I hit in my September 13, 2010, bidding war over penthouse loft at 73 Worth Street that started at 2006, after that smaller penthouse sold quickly on August 25, 2010. (THX to Curbed for a link, which focused on an unusual outdoor amenity.)  That post looked at Penthouse E in the context of other 2010 sales in the building, used The Miller’s rubric for valuing outdoor space (see the oft-cited May 6, 2010, riffing with The Miller on the value of Manhattan terraces, decks + balconies), and found a very justifiable market response to the “2,015 sq ft” duplexed interior of #PH-E with “800 sq ft” of exterior in 3 terraces.

That 2-step #PH-E history:

Note that #PH-E started out last June asking as close to flat as you could reasonably get on that 4 year old purchase price (asking $2,395,000). The Market bid up the price to that very rational $2.475mm last August.

Note also that the 2006 prices paid for these two penthouses are much closer than the size disparity would suggest. The #PH-A interior is 17% larger than in #PH-E, yet the 2006 sponsor price differential was only 2%.

With that background, the September 11, 2009 clearing price of $2.35mm for #PH-A is easier to understand as the product of that (still) thin market compared to the deeper market a year later. Instead of selling weakly as it did, #PH-A should have sold around $2.5mm around 18 months ago, in a more rational market. The thin market hit was then only about 6%, a more easily understandable hit.

But how then to explain the zoom to $3.1mm on February 1?

short answer: short on answers
Let me put this plainly, even (after this long introduction): I cannot explain the fact that The Market valued #PH-A at $3.1mm 3 weeks ago.

While I would never have projected a market value above $3mm for this loft, the seller and agent certainly did: the ask on October 26 was $3.25mm and it took only until December 7 to find a contract at $3.1mm. Again: this makes no sense to me, as this February 2011 trade seems even more of an outlier to the north than the September 2009 trade was an outlier to the south.

Friggin’ weird.

StreetEasy is not easily confused, but …
You StreetEasy fans see that the #PH-A listing history ends with “sold” but no price, there or on the building page. Here’s the glitch: “73 Worth Street” must have been a conversion that spanned at least two tax lots. I came across the closed sale data for #PH-A as a newly recorded sale when updating the Master List of Manhattan Lofts Sold Since November 2008 this weekend, where it shows up as at “65 Worth Street”, with “[n]o listing associated with this closing”, and with no other individual unit sales under that building address. Mystery solved!

(At least, that mystery is solved. But I still cannot figure out how this seller and agent correctly predicted a value I would not. That mystery remains. Sigh.)

this has gone on long enough, no?
I have a few more wrinkles to this loft sale, but if I go on in this post I might break the Manhattan Loft Guy record for over-long posts (not to mention, the patience of you readers). So I am gonna stop now, and will return to Penthouse A at 73 Worth Street if those wrinkles still interest me in a day or two.

© Sandy Mattingly 2011