another irrational sales sequence, as 250 Mercer Street mini-loft sells up over 2011 …
… down under 2007, with a (cruel) twist
It is a truism that individual sales don’t have to makes sense, even in the rational market of lore and legend. Nor do sequences of sales of individual Manhattan lofts, as like Bogey & Bergman we’ll always have outliers. Yet this sequence of sales of the “700 sq ft” Manhattan loft #B1404 at 250 Mercer Street is rather jarring: (a) purchased on July 31, 2007 at $654,000 by people who (b) sold it on September 1, 2011 for $550,000, to people who (c) sold it on May 17 for $600,500. In each case, the loft was on the market long enough and publicly enough that you’d think it would have gotten the best price available to it in the (then current) market.
Here’s the whole sequence, with one bonus (fanciful) attempt to sell with (alas) bad timing. Perhaps the most strange simple numerical bit is the modesty of the near-Peak buyers, when they tried to sell the second time:
|April 3, 2007||new to market||$629,000|
|June 11, 2008||new to market||$995,000|
|Oct 1||off the market|
|April 16, 2011||new to market||$595,000|
|Jan 12, 2013||new to market||$650,000|
did you notice the punchline?
If you clicked on the various listings, you noticed that the loft was babbled in 2007, on its way to a bidding war, simply as “voluminous”, with a kitchen that was ”separate”; the other features were bones (“ample closets … 11ft ceilings, oversized wall-to-wall windows, … imposing architectural column …. [with] natural light through the 8ft windows [that] is bright and in the evening, the landmarks such as the Empire State and CondEd [sic] light up beautifully”) or amenities (doorman, common roof terrace and landscaped courtyard). Having won a bidding war, the 2007 buyers did a major renovation, as indicated in the babble of their first attempt to sell (leaving out the bones and amenities with which you are now familiar):
an elegant ZEN -SPA bathroom that features top of the line fixtures, glass and river rock tiled shower with therapeutic stone flooring. A mini-loft designed with sleek and contemporary finishes, boasts a fabulous kitchen with all new stainless steel appliances.
No wonder they asked for (some) more than the $654,000 they paid. This (yes) mini-loft is no more than 700 sq ft; could they have spent $100,000 on the renovation? Perhaps, but in any event they thought it added $341,000 in value (the renovation, plus the passage of time between July 2007 and June 2008), or $261,000, or $227,000, or $196,000, only to be proven … wrong.
So wrong that when the mini-loft eventually sold (after the renovation, mind you) it sold for $550,000 (September 2011). Seriously. They resold for $104,000 less than they paid without considering the renovation cost.
In contrast to that part of the sequence, the resale 3 weeks ago by the 2011 buyers is unremarkable, as 9% gain after 20 months is barely an outlier in the current market. (Pushing the unremarkable here …) But you have already noticed that the May 2013 price is still 8% below the (pre-renovation) value of 2007. That’s now two sales in a row that show that the 2007-buyers-turned-renovators-then-2011-sellers wildly overpaid running into The Peak.
Sometimes you can’t explain. You just shake your head in wonder.
© Sandy Mattingly 2013