caution: use 75 Ludlow Street loft sale as a comp at your own risk

check the dates and names
Technically, there has been a single resale at this 2008 new development, with the “1,646 sq ft” Manhattan loft #4A at 75 Ludlow Street having sold last month for $1.6mm. The prior sales here were by the sponsor, with the last one completed in the tough market of July 2009 (how tough was that market? the “1,756 sq ft” #2B sold then for $1,110,037, down from asking prices ranging from $1.624mm to $1.35mm … that tough). Compared to #2B at that very chilly $632/ft, the recent $974/ft for #4A certainly looks encouraging, but it is a dangerous thing for anyone to rely upon.

Looking quickly at the StreetEasy history for #4A, it is easy to make the same mistakes that StreetEasy did, plus another that StreetEasy did not (my habit of putting years in bold will help you):

everybody makes mistakes
StreetEasy’s first mistake was to associate the recent sale with that listing instead of giving it the “no listing associated with this sale” treatment; the second was to add that “sold” a year ago, as if the loft listing had resulted in a contract then or had, in fact, closed then. I can see that these are mistakes because the real story of this Corcoran listing is in the inter-firm data-base. Skipping some unnecessary details, that is:

• Sept 5, 2011 new exclusive $2.125mm
• … bunch of open houses
• Feb 7, 2012 EXPIRED due to exclusive expiration

There is no “contract” or “sold” status updates as a Corcoran listing. StreetEasy gets the dates more or less right, but the status wrong. It is easy to infer from StreetEasy that the eventual sale at $1.6mm was the culmination of a public marketing campaign, which would entitle the price to the presumption of being a true market price.

Had StreetEasy noted that the deed really had “no listing associated with this sale” readers would understand that it was a private transaction not entitled to any presumption of being a true market price. That deed record on StreetEasy shows a “sale” from two people to one person at $1.6mm. I wonder if any money actually changed hands here, yet I couldn’t fairly fault StreetEasy if I missed a critical clue right in front of my eyes in that deed record: the two people who “sold” to one person include the one person to whom the loft was sold. In other words, the deed record shows this “sale” was some sort of intra-family transaction, possibly a divorce in which assets and liabilities were reallocated, for which purpose a value of $1.6mm was assigned to the loft.

In other words, without knowing more there is no reason for anyone outside the family to think that the loft was really worth $1.6mm last month. I can think of at least one person (the guy on this deed record) who really wants to believe that the #4A “sale” undervalued a loft of that size in that building, and who might get into arguments about that because of this. People arguing with that guy might be motivated to argue that the #4A “sale” overvalued a loft of that size in that building, but there’s as little direct evidence of that proposition as the contrary view. In fact here, there has not been a single public resale in this small 2008 new development, in a neighborhood in which this development was an attempt to push the Lower East Side market by adding higher quality properties to the local mix. (Have I mentioned recently that comping is hard?)

Leaving those people alone to do their negotiation have that hypothetical conversation in private, my point is that private sales are dangerous things to rely upon without back-up data, and that when StreetEasy mistakes an expired listing for a public marketing campaign that resulted in a (seemingly) public sale it is easier for a civilian to overweight a private sale.

Especially when there is a long gap between the last apparent marketing activity in a StreetEasy history and the deed, check the deed. The names can be a hint that this was not necessarily an arm’s length deal.

Consider yourselves warned. Comping is hard; mis-applying a data point because you don’t realize it is tainted can be dangerous.

© Sandy Mattingly 2013