how to make an impression on The Market
The mark of a serious seller is forcefully responding to negative feedback. The guy who just sold the beautiful “2,341 sq ft” Manhattan loft #3H at 65 West 13 Street (The Greenwich) probably had to swallow pretty hard, but was committed enough to find a market clearing price that he did this:
|Jan 10||new to market||$4.9mm|
He hadn’t quite been ready or willing five-plus years ago:
|Sept 11, 2011||new to market||$4mm|
|Jan 5, 2012||$3.95mm|
|Feb 17||off the market|
Back in the day, dropping the price $50,000 didn’t do anything to generate buyer interest. (A 1% drop is purely cosmetic, as there are relatively few buyers who’d be interested in ‘the high 3s’ who wouldn’t consider an offering at 4-dot-zero.) Back in the day, he didn’t want to sell enough to compromise. (Presumably, he didn’t need to sell at all.)
Different story this year: instead of waiting four months to make a tiny change, four weeks was enough this time to prompt a 12% drop, and he then was willing to talk to the buyers who emerged, and cut another $100,000 off his ask to get a deal done. Contract signed within two months, 14% off the original ask, or $700,000 off.
Damn nice work.
when you love to renovate a loft, you might do it twice
The broker babble is very enthusiastic about the condition of this loft, but to my (jaundiced!) eye not over the top. There’s enough detail (so much detail!) that I suspect this loft is truly one that needs to be seen to be fully appreciated. (I won’t attempt to paraphrase, but it is worth a full read.)
Finishes aside (and they are wonderful), the scale of the place impresses me. The main part of the loft is wide (roughly 25′ by 78′) and ceilings are 13 feet. (It would be a classic long-and-narrow, but for the stub of the entrance gallery.) The ceilings are high enough that the front windows are ten feet. There’s not much in terms of structural elements that is classically loft-like (the one obvious column in the great room has been encased, alas, and if the three N-S supports are interesting, it’s not evident any longer), but the volume speaks for itself.
If I had to quibble (force of habit!), I’d make two points about the layout: you have to walk through the dining area (around the table) to get to the great room and there’s no closet in the second bedroom (unless I’m mis-reading some squiggles on the floor plan). But otherwise, this is a wonderful layout.
I read the two sets of babble and the two floor plans as the same, with the exception of two triangles. The new triangle is the newly configured kitchen island, and looking at that photo reveals a new backsplash but not new cabinets or appliances. The old triangle was a raised platform in a corner of the great room on the circa 2012 floor plan. Otherwise, the walls and rooms seem the same, down to the Venetian plaster that was omitted from the more recent babbling, although the flooring is different (and runs E-W instead of N-S).
I love it when Manhattan loft owners spend money on things that increase their enjoyment of a loft, which is the way I interpret the change in the kitchen island. On paper, it’s not much of a change to take a rectangular island and make it a triangle, but these things aren’t constructed (or demolished) on paper. Personally, I love it as a triangle, more than the former island. And it makes me wonder if that was the first choice that was made, with the decision to replace the flooring one that followed. But I digress ….
Venetian plaster is another element that is ‘worth it’ if it makes you happy as a loft-dweller. The folks I’ve worked with who’ve done it have spent a fortune to do it, and they love the result. Not everyone appreciates it, however, so it is not necessarily an improvement that a seller can expect that a buyer will value enough to pay a premium for.
The texture is apparent (and lovely, to these old eyes) in the foyer / gallery photo above. But I wonder how the dining area looks in real life, after seeing this psychedelic lighting effect:
I really hope that the striations in this photo are the result of the camera interplay with a (too-bright?) light fixture ….
some loft owners are tempted to overly value their
improvements aesthetic choices
The more care (and money) that a loft owner puts into renovations, and the more subtle the improvements, the greater the temptation will be for that owner to expect the general buyer pool to over-pay for the renovations. It’s not true in all cases, but the temptation is real, and it can result in a listing history like the one above in 2011-12.
Whether or not that was part of the owner’s thinking back in the day, it was certainly not the case this year, as demonstrated by the prompt $600,000 price drop. To repeat: damn nice work.
if only there were a nearby comparable loft from 2011 and/or more recent …
I’m curious about the degree to which loft #3H was over-priced the first go-round, and about how its market-clearing recent price fits into the overall market. Of course, neither life nor the overall Manhattan loft market is perfect, but sometimes things turn out pretty well. In this case, there is a single loft in the same building that has some significant similarities to loft #3H and that was on the market around the same time as #3H, twice. The 2-bedroom + 2-bath “1,898 sq ft” loft #8D is not a perfect comp, by any means, but it is good enough to talk about.
We’ll have to consider the appropriate adjustments for utility (#3H has the additional utility of a dining area and den, with lots of storage; #8D has an interior office), view (#3H doesn’t have one, while #8D is “flooded with western light”), and condition (a dicey element to compare based only on babble and photos), but the parallels are intriguing:
|April 28, 2011||new to market||$2.9mm|
|June 9, 2016||new to market||$4.25mm|
It may help to compare and contrast these two in dollar per foot terms:
|July 6, 2011||#8D||clearing price||$1,676/ft|
|Sept 11, 2011||#3H||unsuccessful||$1,709/ft|
|Aug 22, 2016||#8D||clearing||$2,200/ft|
|Jan 10, 2017||#3H||unsuccessful||$2,093/ft|
|April 25, 2017||#3H||clearing||$1,794/ft|
Both times that #3H came to market the most recent 2-bedroom closed sale in the building was #8D, so whether the #3H owner considered the two lofts truly comparable or not, The Market was quite aware of the then-recent sales.
With the cold-hearted and clear-eyed perspective of hindsight, The Market absolutely thought that #8D was worth more on a $/ft basis in Round One, with #8D selling quickly above ask and #3H sitting for five months at a tiny premium (2%); while the contrast was even worse in Round Two, when both found clearing prices, but #8D was at a significant premium to #3H (23%!), before adjusting for time (fortunately, for purposes of this exercise, the StreetEasy Price Index for the overall Manhattan residential real estate market was up less than 1% from August 2016 to April 2017). In other words, The Market knew that #8D had cleared at $2,200/ft before #3D came out at $2,093/ft, and wouldn’t even grant #3H the $1,837/ft it was asking after that big price drop in February this year.
Like the #3H owner, I would not have predicted this, but we are all now in a position to rationalize the results. First, I take it as a given that #3H is in significantly better condition than #8D, though I concede that the superior quality of finishes in #3H may be a matter of taste (and that Venetian plaster is hard to value!).
Second, the light! As bright as #3D may be with those ten-foot southern windows, it can’t compare to open western light five stories higher that clears nearby buildings. For buyers who must have light, #3H can’t compete, and some of those buyers may ‘overpay’ for that feature. Third, for buyers who have to have two bedrooms, each loft will satisfy, but one could be bought for fewer dollars (price per foot notwithstanding); and for buyers who’d stash a second kid in a dark room, #8D can satisfy, while #3H cannot.
Fourth, while the layout of #3H is (to me) luxurious, and a far superior footprint for entertaining and grand living, for others the ‘extra’ space that makes it luxurious also makes it (somewhat) more expensive in absolute dollars. That parenthetical is carrying a lot of water, as the facts developed that the extra space in #3H was worth exactly $25,000 more than #8D (after netting out the light), but that detail wasn’t specifically proven until eight months after #8D sold.
The more I look at this, the more surprised I am. It is good that I am still young enough to learn ….