The Market corrects too low price for 53 N. Moore Street loft, generates a koan

straight up bidding war
There are a lot of green April loft sales on the Master List of Manhattan Lofts Sold Since November 2008; so many that the over-use of color in April deserves a post of its own. On some other day. The Manhattan loft combination #2BC at 53 N. Moore Street (The NorthMoore) wears the green for closing on April 21 at $3.8mm, a premium of 7% over the asking price of $3.55mm, achieved between the February 24 launch and the March 15 contract.

As in my May 8 post (The Market corrects a Cast Iron loft over-correction, as 67 East 11 Street loft sells above (reduced) ask), The Market corrects a ‘too low’ asking price, when The Market is deep enough; unlike in that post, which involved a price drop, #2BC was ‘too low’ from the beginning.

setting a building record
At $1,421/ft for “2,674 sq ft”, this #2BC sale is the highest price paid per-foot for any unit here other than the penthouse units with outdoor space, including the three units that sold between July 2007 and August 2008. But perhaps the sellers saw it coming, as the much smaller #5H (“1,083 sq ft”) closed on December 14 for $1.48mm, or $1,367/ft. That one also had a bidding war, having started ‘too low’ at $1.399mm on September 24 and finding a contract by October 12.

comping is not for the faint-hearted
The last sale in the building before #5H six months ago was the #PHB unit on March 29, 2010 for $2.15mm, with “1,282 sq ft” of interior space and “630 sq ft” of private roof deck. In rough numbers, if you applied the interior value of #5H 9 months later to the slightly larger interior in #PHB, you get about $1.75mm for the #PHB interior, leaving $400,000 in market value allocated to the 630 sq ft of roof deck. At that assumed $1,367/ft for the interior, the implied $635/ft for the exterior fits rationally into The Miller’s rubrics for valuing outdoor space.

But the last sale before #PHB was a loft almost the same size as the #2BC combination, which makes for a more convoluted analysis. The #PH-HJ combination is just a little smaller than #2BC at “2,500 sq ft”, with ‘only’ 3 bedrooms plus a 12×8 foot gym instead of the 4 bedrooms, but also has a “625 sq ft” private roof deck. It sold on November 5, 2009 at $3.4mm. That closing date is outside of the nuclear winter that hit the overall Manhattan residential real estate market, but the listing history suggests some freezer burn on this unit: to market on October 4, 2008 (3 weeks post-Lehman) at $4.5mm, one (stubborn) price drop on February 2 to $3.85mm, and then a long (stubborn!) wait at $3.85mm before reaching a contract 7 months later at $3.4mm.

If you figure the outdoor space at 50% of the value of the interior space, The Market valued #PH-HJ at an adjusted $1,209/ft a year and a half ago. Freezer burn, indeed.

Compared to the sale last month of #2BC at $3.8mm for “2,674 sq ft”, $3.4mm for #PH-HJ with “2,500 sq ft” interior plus “625 sq ft” exterior in November 2009 shows quite a lot of freezer burn, actually. Not to mention, you’d also consider the benefits of being on the top floor compared the 2nd floor, or that #PH-HJ boasts a rather spectacular renovation.

from February’s perspective
The #2BC sellers had all these data points when they set an asking price of $3.55mm, or $1,327/ft. The asking price was modest in comparison to the $1,367/ft achieved in December by the much-smaller #5H, and a recognition (hope?) that market conditions were improved about 10% since the November 2009 sale of the comparably (interior) sized #PH-HJ at $1,209/ft (adjusted).

That $3.55mm asking price was ‘too low’ in that The Market was willing to pay more, but it was ‘just right’ in the sense that that asking price generated the bidding war that resulted in a sale at $1,421/ft. I may have pay more attention to find other examples of Manhattan loft koans such as this one:

when is a price both too low and perfect?

© Sandy Mattingly 2011