is the Manhattan loft market back to (up to) 2007? 61 repeat sales say “probably”, “a bit”

[updated Oct 2]
61 66 pairs say yes
One of the frequent topics for a Manhattan Loft Guy Note to self … has been ways to exploit that oh-so-(potentially)-powerful Master List of Manhattan Lofts Sold Since November 2008, beyond the mere list of one damn sale after another. I have made a few attempts, among them a March 5, 2010 look at (what grew to be) 27 lofts that had sold in the prior six months and in 2007 (updated on April 12, 2010). Here is another.

That Master List has 61 66 sales in 2011 of lofts that also sold in 2007 (remember: it is downtown only, of lofts sold between $5mm and $500,000). [I added 5 more pairs to the spreadsheet, for deeds filed in the last week, but am not (yet?) going to make line-by-line edits to my original text. Scroll down for an additional summary paragraph.] The sale-to-resale experiences of these 61 lofts … varies. A lot.

Nuggets:

Of the 61 paired 2007+2011 sales:

• 40 showed some gain; 21 showed some loss
  
• 19 showed a gain of less than 10%
• 11 showed a gain of 10% but less than 20%
• 10 showed a gain of 20% or more
  
• 12 showed a loss of less than 10%
• 7 showed a loss of 10% but less than 20%
• 2 showed a loss of 20% or more
  
• biggest % gain: 47.06%
• biggest % loss: -27.79%
  
• biggest $$ gain: $1,325,414
• biggest $$ loss: -$635,000
  
• 13 lofts had gains under $100,000
• 7 lofts had gains between $100,000 and $200,000
• 9 lofts had gains over $500,000
  
• 4 lofts had losses under $100,000
• 10 lofts had losses between $100,000 and $200,000
• 1 loft had a loss over $500,000
  
• the median change from 2007 to 2011 was a gain of 4.95%
• the average change from 2007 to 2011 was a gain of 6.11%

Case-Shiller fans would say that the current Manhattan loft market conditions are roughly 5% improved over 2007 … which was a very good year.

Did I mention that comping is hard?

the new development factor
One way to drill into the 61 pairs, which I also used in that effort last year, is to isolate the 20 pairs that involve a 2007 new development sale.

• 10 of the 2007 new development sales showed a gain
• 10 of the 2007 new development sales showed a loss
  
• the average new development gain (of the gains, only) was 19.78%
• the average new development loss (of the losses, only) was -9.85%
  
• as in my March 5, 2010 look, one 2007 new development accounted for the most pairs: 225 Fifth Avenue (Grand Madison); this time there is one (big!) loss and 4 gains, including 2 big gains

Only two other 2007 new developments accounted for more than one pair: 32 West 18 Street (Altair 18) had two (big) gains and 16 West 19 Street (Jade) had one (small) gain and two losses (one big); oddly, the sister “Altair” development at 15 West 20 Street (Altair 20) had one (large) loss

If you take out the 20 2007 new development resales, of the 41 “pure resale on resale” remainders:

• 30 showed some gain; 11 showed some loss
  
• 16 showed a gain of less than 10%
• 6 showed a gain of 10% but less than 20%
• 8 showed a gain of 20% or more
  
• 6 showed a loss of less than 10%
• 4 showed a loss of 10% but less than 20%
• 1 showed a loss of 20% or more
   
• biggest % gain: 47.06%
• biggest % loss: -27.79%
   
• biggest $$ gain: $1,325,414
• biggest $$ loss: -$635,000

Did I mention that comping is hard?

of course, some lofts have been renovated
Case Shiller and similar data (OFHEO, back in the day) rely on the law of large numbers to flatten out the impact of renovations and other improvements in a paired resale analysis. But my numbers are not so large, and my interests are more refined (if less rigorous statistically).

I will confess to not looking to see whether any lofts with performance less than a 10% gain have been renovated (including, obviously, not looking at the renovation status of any of the ‘losers’). The analysis is difficult, because it is sometimes hard to tell if the prior condition was the same, and it is impossible the quantify the degree of change (a ‘gut’ renovation is different from an ‘extensive’ renovation is different from ‘updated’ kitchens and baths …). Best I can tell:

• only 5 of the 14 “pure resale on resale” with gains above 10% were in the same condition in 2011 as in 2007, though in 2 more cases, the changes seem to have been limited to the plumbing rooms

Did I mention that comping is hard?

net-net, yeah … up a bit, overall, more or less
The Law of Small Numbers is working pretty hard against any rigorous analysis of the 2007 v. 2011 data, if we limit analysis to ‘pure resale on resale’ pairs and if we eliminate those lofts provably renovated in between. (I would not necessarily do either of these things in a comp analysis for a prospective resale, but in a macro world, let’s see the results.)

The same-old-same-old data set has 21 gains (remember: I did not look for renovations below 10% gains) and 11 losses. (Note how the proportions gains:losses stay within a tolerable range.)

Of the 32 total same-old-same-old paired resales:

• the median change from 2007 to 2011 was a gain of 2.35%
• the average change from 2007 to 2011 was a gain of 2.10%

There should be no surprise that the median and average are both much reduced from the full data-set median gain, having taken out the renovated loft gains.

Of the 21 same-old-same-old gains:

• the average gain was 8.97%

Of the 11 same-old-same-old losses:

• the average loss was 10.99%

as I said, more or less…
You could cut the data different ways, and these numbers are probably nowhere near a big enough data set for a true Market Analysis. And I would not use this as the principal tool in determining where a specific loft fits in the current market (whether it sold in 2007 or not). But this data collection is the best response I can come up with to the (age old?) question “how far back did the market correction take the downtown loft segment of the overall Manhattan residential real estate market?”

If you want to argue it is really 2006 or earlier, show me some data (note to self: find the 2006 pairs). I have shown you a full set of available data, one fair conclusion of which is that the current Manhattan loft market is (to use a technical term) just a tad stronger in price than the 2007 market.

Every time I sliced, the gainers outnumbered the losers, up to 2:1.

Every time I sliced, I got mean and average nets that were positive, around 5% overall and at least 2% in the highly-controlled sub-segment.

Department of Redundancy Department, again
From a macro perspective, this data set shows me that the downtown Manhattan loft market is up a bit over 2007 (more or less), the strongest full year in Manhattan residential real estate history. That is pretty remarkable. YMMV

[added Oct 2: My conclusion remains the same ("this data set shows me that the downtown Manhattan loft market is up a bit over 2007 (more or less)"), having added 5 new pairs of resales and having marked one of the ‘old’ ones with a big gain as a renovation, per the update to my September 28, 682 Broadway loft sells up 33% since 2007 after moving some walls, but they don’t change the thrust. Only 1 of the 5 suffered a non-trivial loss (-4.54%), while 3 had non-trivial gains. I may update this again as still more new pairs have deeds filed, or I may let this just sit as is, unless some new data requires a re-set of my overall conclusion. But I will continue to update the spreadsheet, for those of you who really want to see the details.]

clicking for details is harder, but only a little
For those of you who simply must see what examples I use (and don’t have the patience to pull them out of the Master List of Manhattan Lofts Sold Since November 2008 yourselves), I have put the 61 pairs on another Google Docs spreadsheet, but there is a twist.

I have been told for years (literally) by my sales managers and business coaches that I am making a mistake just giving away my data. My sloth has worked out to benefit you, my faithful (all too anonymous) readers, as I have never listened to that (good) advice before. Until today. Here’s the trade: if you want access to the details of this data, you need to register by sending me an email, which I will add to the Share list on the Google Docs spreadsheet.

In exchange, I may send you an email from time to time in service of my business as a residential real estate agent in Manhattan who specializes in the loft niche downtown. You don’t have to read the emails before deleting if you don’t want, and if they really bug you you can ask me to take you off both the Share list for Google Docs spreadsheets and the email list. You might rationally consider that it has taken me this long to listen to good business advice (requiring an email address to get Good Stuff), so I may be equally dilatory in exploiting the email list that I get of faithful (all too anonymous) readers.

Seems like a fair deal to me, but you decide. (I probably should put the Master List of Manhattan Lofts Sold Since November 2008 behind the same registration process and list, but let’s leave that for another day.)

INSTRUCTIONS, if you want the details on a Google Docs spreadsheet:

• send an email from any valid email address to Sandy@ManhattanLoftGuy.com with the subject line “add me” (or equivalent)
• if you don’t get a response within 24 hours, do the same thing to Sandy.Mattingly@Corcoran.com
• Enjoy!

© Sandy Mattingly 2011