another loft sale at 116 West 14 Street shows that TLC is cheaper than you'd think

cost vs. value, redux
The “1,763 sq ft” Manhattan loft #8N at 116 West 14 Street sold on November 16 for $1.775mm, or $1,007/ft, in pretty good condition. The broker babble billed the loft as “spectacular condominium loft [that is l]oaded with charm and character including original Doric columns, Mahogany stained floors and ceiling heights that lends itself to grand space [and] imported Aster Cucina kitchen with CaesarStone counter tops and top of the line stainless steel equipment”. That is a surprisingly small premium to the neighboring loft downstairs, #7N, which finally sold on June 30 for $1.58mm, or $896/ft, after being billed as “needs some TLC”, especially as that “some TLC” bit may be understated. (These sellers started trying to sell at The Peak, with classic babble that prepares a buyer to do a lot of work: “awesome opportunity” and “possibilities abound!”, with bragging about bones, not finishes.)

I wonder if one could bring the condition of #7N up to that of #8N for as little as $195,000, especially after looking at what happened to the Flatiron loft I hit yesterday (December 7, 20 East 17 Street loft sells plus 6% over Peak) after spending about $150,000 on a loft with great finishes that was a little banged up. In that case, the sellers got a huge bang for the buck and sold for a premium to their at Peak purchase. In this case, the two lofts at 116 West 14 Street went head-to-head, both had trouble finding the right price, and the lower quality loft won, after being more nimble.

neighborly competition can sour elevator conversation
The neighborly competition this year:

(*contract date from the inter-firm data-base)

Taking the end points as market value, #8N started 17% above the market while #7N started 15% too high. But #7N dropped the price 9.4% within 3 weeks and found a contract 4 weeks later at only a 5.7% discount. #8N marched in a longer parade, waiting about 10 weeks to drop 7% (that market reaction followed the #7N contract by 10 days), then waiting another 10 weeks to drop another 6%, ten waiting 7 more weeks to find a contract at a mere 5.3% discount.

There is no doubt that The Market preferred #7N to #8N in the 6 weeks they went head-to-head. I assume that anyone seriously interested in one would have taken a look at the other, and in the last 4 weeks of the competition #7N was asking $375,000 less. A cynic (moi??) would say that the best thing that #7N had going for it in April was stubborn pricing upstairs. A critic (moi!) would say that the $2.15mm asking price did more to sell #7N than it did to sell #8N.

Given that I started this post with the observation that I was surprised at the (eventual) spread between the “spectacular” loft and the “needs TLC” loft, I have to wonder how much money got left on the table upstairs. A second-guesser (moi??) would ask whether the #8N folks might have done better had they competed better at the start … say, starting at (moving to) $1.9mm or so when #7N was at $1.849mm.

Assumptions ‘R Us (or not)
All of this comparable analysis between the neighboring lofts with identical footprints is based on an assumption that my read of the babble is correct about the relative differences in condition between the two lofts. As discussed yesterday with two sets of babble, floor plans and pictures about a single loft three years apart, it is very difficult to get a read on the pix and babble of these two lofts.

My surprise that #8N did not sell for a higher premium is based on the assumption that it is in a materially better condition than #7N. Part of that assumption is based on the last time #8F sold, on December 28, 2007 (as close to Peak as you are going to get) as a (pardon the shouting) “XXX MINT DESIGNER LOFT”.

Obviously, some people saw both of them, and #7N reacted to the competition with #8N by dropping quickly to increase the dollar gap between them, while #8N did not react until #7N had found a contract.

Coincidence or not, the final market spread between them (11%, or $195,000) is not dramatically different from the original asking price spread (14% or $301,000). The early(er) bird to change prices got the worm (contract).

and way cheaper than Peak, alas
You can see that the #8F sellers were overly optimistic, not just because their pricing this year did not work, but when you go back to that Peak sale, which closed at $1.995mm. Starting at $2.15mm (a 7.8% premium) was optimistic but not ridiculous, given the performance of other members of the Class of 2007 (see my September 27, is the Manhattan loft market back to (up to) 2007? 61 repeat sales say “probably”, “a bit”, and the associated spreadsheet of now 77 paired resales). That learning is that 2011 prices for downtown Manhattan lofts are more or less like 2007 prices, though you’d expect later 2007 prices (being closer to The Peak) to be harder to improve upon than early 2007 prices.

That first price drop to $1.995mm was asking for parity with the prior sale; you’d think that was a price that would attract a bid. (Sellers did.) But it took another price drop and a further negotiated discount to get a deal 11% off the last sale. I think that competition with #7N really hurt.

© Sandy Mattingly 2011