250 Mercer Street mini-loft sells up only a smidge over 2005

that’s $5,000 if you are scoring at home
In “honor” of the (now begun!) snopocalypse, I had hoped to continue looking at memorably tragic sales this week. (That’s on top of my posts of February 6, 106 Duane Street loft sellers built a beauty then aimed at the moon (fell more than 200,000 miles short, alas), and February 7, not gussied, 46 Great Jones Street loft sells after 363 days, down 42% from first ask, of course, in which those titles tell much of the stories.) Scanning the Master List of Manhattan Lofts Sold Since November 2008, the best candidate is not as big a tragedy as that pair, as the recent sale of the Manhattan “800 sq ft” loft #D804 at 250 Mercer Street was neither as protracted nor as discounted. But (as you know from the title, using a technical real estate term, and sub-head, using the raw number) it resulted in a “gain” of only $5,000, or 0.06% over 7 years. Indeed, as you will see way down below, I have a theory about how no one (other than Manhattan Loft Guy) cares about the tiny gain.

The recent sellers bought at $850,000 on June 15, 2005, came to market as sellers on June 20, 2012 at a rather modest $895,000, then got worn down for the September 29 contract to the $855,000 deal that closed on December 21. Not as dramatic as taking two firms, a year, and many price drops to arrive at the results in the Tribeca & Noho pair, let alone as dramatic as the current blizzard forecast, but that’s what I have today.

big windows for a small space
This coop unit is carried in our listing system as the “800 sq ft” noted above; with a floor plan showing a 350 sq ft living room, a bedroom of less than 200 sq ft, and a cramped kitchen to match, that may be more than conventionally generous. The glory of the space is the stretch of windows, running thigh to ceiling on the long living room wall and the same size on a long bedroom wall. With 12 foot ceilings, that glass will make the loft feel open rather than cramped, no doubt.

Otherwise, the space boasts a spa bath and a kitchen with some proper proper names. Any pain associated with a “gain” of 0.06% over 7 years would be worse if the recent sellers were responsible for any of the brag-worthy elements, but fortunately for them they bought the loft with the bath and kitchen as babbled recently. So none of that $5,000 gain would have been eaten by renovation costs. (Small) whew!

buying for kid is not an investment (in real estate, at least)
I will bet you a quarter that the sellers never lived in this unit. Go look yourself, but The Wiki confirms that the sellers include a federal judge who made some embarrassing news during the Clinton administration regarding household help and again regarding the current spouse, and that the judge and big firm lawyer have an adult child just the right age for whom a purchase of an apartment might have made more sense than a dormitory or Greenwich Village lease. I can only assume that the 2005 purchase was not a real estate investment for this family, so that the tiny gain was an inconsequential event.

Indeed, I am tempted to say that they didn’t much care what they paid in 2005. Without doing a rigorous backwards market review of this building as of early 2005, the fact that #D804 just sold for $855,000 is highly suggestive that it was not really worth the $850,000 they paid on June 15, 2005. So are the facts that the 2012 value realized for #D804 compares very well to other 1-bedroom units sold in 2012 (StreetEasy buidling page, here), including to the “impeccably renovated” “850 sq ft” #B403 at $865,000 last June. Their buyer got a better deal in 2012 than they did in 2005, in other words.

Here is the 2005 marketing campaign taken from our listing system, with no evidence of hard bargaining by a buyer trying to get the best deal available in a pre-frothy market:

Mar 16, 2005 new listing $850,000
April 1 (the only) open house  
April 5 offer accepted  
June 7 contract  
June 15 sold $850,000

I have no doubt the (adult) kid was worth it.

not a Tax Uncertainty deal, btw
If you saw my January 4, in which Manhattan Loft Guy bravely calls BS on the Market Trend Meme Of The Day, or my twitter dialogue with The Miller (that’s through my intentionally misspelled @ManhattanLoftGuy, for those of you in the twitterverse), you know I am firmly on record as being a skeptic on the Conventional Wisdom that the transactions at the end of 2012 were significantly driven by uncertainty about tax changes for 2013. (Not so much a Tax Uncertainty Denier; just a Missouri style skeptic.) One of my pending Notes to Self … is to somewhat systematically look through the Master List of Manhattan Lofts Sold Since November 2008 for some evidence, pro or con.

When (if!) I ever respond to that self-note, this sale will be in the con category as a sale completed as 2012 was coming to a close that demonstrably had nothing to do with Tax Uncertainty. I don’t need to go through the specific tax bracket math for this high-income couple, because if they had gotten their asking price they’d still have had no recognized gain since 2005, as the sales fee at 6% would have eaten that gain. They may have wanted to take care of this in 2012 (perhaps to realize a long-term capital loss??), but they were not at all worried about how much The Uncle would take out of this transaction.

© Sandy Mattingly 2013


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