the difficulty in comping in former new development / the 101 Warren St laboratory

if you look at Then vs. Now, look at Contract Date Then
It is no secret that in looking at historical data for Manhattan lofts (or other Manhattan coops or condos, generally) that started not too long ago as new developments it is difficult to compare apples to apples without knowing the contract dates of the original sales. Take these four units at 101 Warren Street, for example, each of which sold in the original offering (eventually) and then again last month.

Just looking at sale dates, they are all over the map. One is up 22%, one is down 10%, one is flat, and one is up 6%:

#3130

#1540

#1130

#840

(And, yes, I know that #970N and #780 also sold in December, but I can’t find a contract date for the #970N original sale in July 2008, and #780 just sold with a tenant in place, a condition that I have always assumed makes for a bad comp. Perhaps one day I will check that assumption; note to self….)

different market conditions in 2009 than 2008 (obviously)
Given this range of four resales, it is obvious that #3130 is the main outlier and that the reason is that it sold by the sponsor about a year after the other three originally sold. The sponsor never changed the asking price on that unit ($2.55mm), but the eventual buyer bargained down to a 12% discount. (I.e., the sponsor was wrong about that value during the entire marketing period, beginning in May 2006.) But the other three appear to be truly comparable.

some differences into Spring 2008
Here is what they look like with the contract dates substituted in for the original sale dates:

#1540

#1130

#840

I have not looked enough at the full array of original sale values at 101 Warren Street, but this set of three has one hint of market velocity back in the day. Both #1130 and #840 were sold by the sponsor at the original asking price (the recorded price reflects that both buyers also paid the transfer taxes). But the asking price for #1540 was raised two days after #840 sold, from $2.535mm to $2.735mm, and that first buyer then got a slight discount. In other words, the sponsor correctly predicted that #1540 could take advantage of a stronger market

Here is what the #1540 comparison would look like with the original asking price substituted in for the original actual sale price, again using the contract date for that sale:

#1540

Had that original #1540 buyer gotten in just a few weeks earlier, all three of these units (#1540, #1130, #840) would have been essentially flat in their recent resales. Of course, the true marker of value is the sales price, so yes, #1540 suffered a decline in real value when it sold a month ago, while the other two were more or less flat.

Over-analysis? Perhaps. But this kind of thing intrigues me. Not all original sales around the same time reflect the same market conditions. You’ve heard that before; here’s an illustration.

© Sandy Mattingly 2011