is the hyper-local Manhattan loft market at 80 John Street up more than 5% in a year?

and now for something a little different
After looking twice this week at Manhattan lofts that sold high recently after not selling in 2009, the recent sale of the “875 sq ft” mini-loft
#14A at 80 John Street (the troubled South Star) presents a slightly different wrinkle. Loft #14A just sold at $940,000 (quickly and above ask) after not selling for 5 months in mid-2012 while asking as little as $895,000. Rather than illustrating the difference in market conditions, now compared to the post-nuclear winter thaw that characterized the overall Manhattan residential real estate market in mid-2009, loft #14A is a data point in support of the proposition that the market is up more than 5% in a year, in this little corner of the Financial District at least.

Year-to-year, the ask (eventually) was the same; the results different:

May 4, 2012 new to market $950,000
May 17   $900,000
July 17   $895,000
Aug 27 off the market  
Mar 14, 2013 new to market $895,000
April 17 contract  
June 17 sold $940,000

If you take only the end of the 2012 marketing campaign, that market had only 6 weeks to digest the loft at $895,000, but also had another 4 weeks to digest it at its functional equivalent ask of $900,000. Indeed, I would argue that the asking price history suggests the seller in 2012 would have leapt at the chance to sell for $940,000 and would likely have happily negotiated well below that, if only a buyer in 2012 had been willing to deal. Clearly, no one was, then.

Fast forward less than 7 months and the market reacted to the old (reduced) asking price immediately and enthusiastically, driving the clearing price nearly to the original (May 2012) ask. Same loft, different market conditions.

litigation is a story for diligence
The numbers are the numbers are the numbers. Of course, they don’t lie; but neither do they explain. I don’t know
why the 2013 buyer was willing to pull the trigger at $940,000 in April 2013 when no one was willing to do anything like that a year ago, but it may have to do with the due diligence looking a little less dire now, than then.

When I hit this building for the first (and only other) time in my January 8,
the baths get a little crowded, as another South Star loft at 80 John Street clears below sponsor sale, I kinda sorta bragged about not knowing the details of litigation by this condo against the developer (and against my firm, so cynics should check their salt supply), and I am happy to still not have any details. My guess is that any due diligence by a competent buyer attorney before that case was filed 7 months ago would have revealed a lot of … debris. That debris likely contributed to the resale market being both thin and weak, with the #14A performance in 2012 as a likely example.

Maybe the suit actually being brought solidified things enough to make it easier for buyer attorneys to assess risk (thereby, to grease the hyper-local market), or maybe the overall Financial District small-loft market is just more solid in 2013. Whatever, just sold for 7% more than the sellers paid when they bought it from the sponsor on August 9, 2007. That January 8 post was about a neighbor that sold for 10% less than the full 2007 consideration, in which I noted why that sale was of interest:

Looking back at 10 resales in 2012 on the StreetEasy building page (2 sales were of sponsor units) and finding only two 2012 deed prices above the 2007 deed prices will pique my interest.

In 2013, there have been 6 other public resales, with uneven results. Three sold below the total consideration paid by those 2013 sellers in 2007; 3 sold above. The performance of loft #14A looks pretty good in comparison:

  • #4D sold 11% above the sponsor sale (perhaps because the sponsor sale was so early in 2007??)
  • #7F sold 4% above
  • #11A sold 1.7% above
  • #2C sold 19% off the sponsor sale price
  • #10D sold 14% off, explicitly as a short sale
  • #19B sold 9% off

© Sandy Mattingly 2013



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