“great bones” 100 Hudson Street loft sells above where it “should” have

the best comps are close in time, size and location, with few adjustments
Apparently The Market thinks that the difference between “1,100 sq ft” of “great bones” and “1,100 sq ft” of “meticulous renovation” and “superb craftsmanship” is $92,500 in Tribeca. I’d have thought it would be more, as you’d pay more than $92,500 to upgrade from great bones to a “head to toe [renovation] using the finest of finishes” with (a partial list) Brazilian walnut floors, Viking and Miele Appliances, stainless steel countertops, Chilewich backsplash, bamboo cabinetry, limestone bathroom with granite flooring, Duravit fixtures, deep spa tub, separate stall shower, Bosch WD, Bose surround sound, Fujitso plasma TV, custom closets, and sophisticated lighting. But that is not what happened, as the (yes) “1,100 sq ft” Manhattan loft #4B at 100 Hudson Street sold on April 4 at $1.17mm just 4 months after #3B sold for $1,262,500.

My view was more than academic, as the buyer with whom I saw #4B was persuaded that it needed a bigger haircut from the $1.25mm ask to reflect the significantly different condition of #4B so soon after #3B had tested the market at $1.325mm and discovered that $1,262,500 was its value.

The #3B photos are much better on the Corcoran site, and I encourage you to spend some time with them, and with the listing description on StreetEasy, before looking at #4B and its bones.

Yes, #4B offered the choice presented in the broker-babble: “move right in or … show your creative side”. If you moved right in, you’d be in an environment that is rather (what’s the polite real estate term?) tired. Nothing has been touched in this loft in (guessing) 20 years, as implied by the absence of pictures or prose about the kitchen or the bathroom. I don’t see many people making that choice in this market, but maybe there is a class of starter loft buyer just happy to be able to live the Tribeca loft dream under $1.2mm.

fill in the blank: Comping is ______
Any buyer with a calculator, however, is comparing the tired #4B to the head-to-toe #3B, and coming up with a spread greater than $92,500, as no one would (should) think that you can turn #4B into #3B for that amount.

Of course, at the end of the day the individuals who bought and sold #3B are different from the individuals who bought and sold #4B four months later. If the #3B seller had been more firm, and had been able to hold out for $25,000 more than that deal took, and if the #4B buyer had been more firm, and held out for $25,000 less than that deal took, I probably wouldn’t be writing this post this way. I would say that you still could not turn the toad of #4B into the prince of #3B for $150,000, but the math would be closer, and probably within spitting distance on both sides of this same-line-in-same-building-in-same-market pair.

Without doing a broader comp analysis, I can’t tell which of these two sales is more out of line with the general Tribeca loft market (not that there are enough sales of small lofts to make that easy). But I can tell that they don’t fit together within an efficient market analysis.

And I can tell you that individual needs, resources and circumstances of individual buyers and individual sellers often make a mockery of efficient market analysis, especially with non-commodity properties like lofts. Mock away!

© Sandy Mattingly 2012