small 250 Mercer Street loft sale suggests seller got great deal in 2011
unless you think market is up 21% in 2 years
I am 98% certain that if you look at the 2012 listing photos for the “850 sq ft” Manhattan loft #A301 at 250 Mercer Street you will find that this mini-loft just sold in the same condition, with the same finishes and “elegant mint condition” as in the 2011 listing photos. I am, however, 100% certain that if you compare the sales prices, you will find that the February 15, 2013 sale at $940,000 is $162,000 higher than the April 5, 2011 sale at $778,000, and that the difference is a premium of 21% over 22 months.
I will concede that there are not quite enough parallel details in the respective broker babble to conclude that everything is identical, 2011 and 2012, such as the “new large Friedrick air-conditioner unit[s]” or the 2 flat screen mounted televisons, but the floor plans are identical (2011 here, 2012 here), down to the office-in-a-closet and the (unnoted on the floor plans but described in each listing description) sleep / storage loft. Again, there is about a 2% chance that there were any significant additions or improvements to the loft between April 2011 and September 2012, and by “significant” I mean worth $10,000 or more.
how can The Market be wrong (again)?
How do these things happen? Both sales were market sales, at arm’s length after being fully exposed to the public market. Yet they both can’t be “right”. Either one is an extreme outlier (2011 low, 2013 high), or both are moderate outliers.
Loft #A301 came to market last on September 20 at $960,000 and found a contract by October 29 at $940,000 (the closing took another 4 months, but at least this one is a coop, unlike the storm-tossed condo I hit yesterday, in my March 11, Seaport loft in very old building sells up $10,473 over 2005, neighbors tremble). When sold in early 2011, the timing was even quicker: to market January 4 and in contract by January 27.
There may be a hint in that 2011 history, and there is a parallel to that Seaport loft in yesterday’s post, a backwards parallel if you will. In that case, the two sales prices for that loft (2005 and 2013) were too close for both to fit the overall market trends; in this case, the two sales of loft #A301 are too close in time yet too far apart in value. I have always found the coop 250 Mercer Street to be a difficult building in which to comp, despite there being many data points in the 275-unit building, as the “A” – “D” prefixes to unit numbers indicate what were originally four buildings, and the unit numbers in one don’t match the floor plans of the same unit numbers in another.
nosing around the building
This last sale of #A301 did not overlap with the marketing campaign for loft #C301, which closed on December 18 at $780,000, but that one was a “1,200 sq ft” bring-your-architect gut job, hardly attracting the same buyer pool as the mint 1-bedroom #A301.( I hit that one in my January 14, when bad things happen to high ceilings: 250 Mercer Street loft sells at $650/ft.)
Nor did it quite compete in time with the “800 sq ft” loft #D804, another neighbor that came and went before #A301. That one was similar in scale in both size and price ($855,000, on December 14) and, as noted in my February 8, 250 Mercer Street mini-loft sells up only a smidge over 2005, may not have been marketed to get the highest possible price (as odd as that sounds). At least with #D804, the sale suggests that #C301 was in the right ballpark in value.
In contrast, the prior time that #A301 sold there was some direct nearby competition. If these things have to have reasons, my provisional theory is that the 2011 seller made a mistake by coming to market too low, perhaps (overly) concerned about going head-to-head with the “completely renovated” “900 sq ft” #D504, which had some difficulty finding a deal while asking $799,000 (it took 2 contracts to sell that one, at $765,000 on April 20, 2011). The Market, in fact, preferred #A301, and quickly bid up the $759,000 asking price to $778,000.
Two things about this pair of 1-bedroom loft sales in April 2011…. The #D504 sale appears to have been at a low price, as the same loft sold in 2004 for slightly more ($775,000). Second, with #A301 coming to market soon after #D504 came back to market after a failed contract, the sequence and pricing suggest the #A301 seller had an eye on the competition and intentionally priced low for a quick deal:
|#D504||Sept 18, 2010||new to market||$799,000|
|#D504||Dec 2||back on market|
|#A301||Jan 4, 2011||new to market||$759,000|
This may be a case in which the higher quality loft was undersold due to direct building competition. The #A301 seller got what she wanted (a deal above her asking price, in only a few weeks). But my guess is that she left significant money on the table, as proven by the sale 22 months later.
Either that, or the Loft Gods are just screwing around with us, because the numbers don’t add up.
© Sandy Mattingly 2013