compare to 2006 loft, wonder about renovation
Bang! Zoom! That was the “1,500 sq ft” Manhattan loft #3N at 520 LaGuardia Place in lower central Greenwich Village flying through The Market above ask at $2.2mm: to market on April 27 at $2.1mm, in contract by May 17, and (in the slowest part of the process) not closed until September 26. No doubt, a successful campaign; after all, $100,000 over ask within 3 weeks, achieved with only one open house (I was at that
zoo one with a buyer client).
If I told you that this seller at $2.2mm bought the place in November 2006 for $1.75mm you’d be more impressed. At least, until you noticed that the recent broker babble boasts that the loft was renovated (not “meticulously”, not with details unspared; just “renovated”), with some modest boasting about the kitchen (“chef’s kitchen has stainless steel appliances, pristine granite countertops and custom cabinetry”; yay chef, yay cabinetry) and master suite (“brimming with charm and features exposed brick and a tremendous walk-in closet”; yay charm, yay closet). Then you’d look to see how extensive the renovation was and you might wonder how much of the difference in value was The Market, compared to the value added by a renovation. StreetEasy can easily help you with the latter, not the former.
You can “get a feel for” the overall Manhattan residential real estate market by consulting the StreetEasy Condo Index, which was 2,030 in November 2006 and 2,170 in August 2013 (the most recent month available). That’s a gain of 7%, so you could ballpark the value of loft #3N at about $1.87mm if it had not been renovated (removing any value but differing market conditions). In theory, then, the additional value assigned by The Market on September 26 of $330,000 is all due to the renovation. That’s $220/ft, which fits nicely into the ballpark analysis revealed in my December 10, 2007, need renovation stories / a reader writes for help, that a no-problems gut renovation at less than uber-condo level could be done around $200/ft. How big was that renovation? If ‘big’, this seller priced modestly and probably profited not at all (considering the sales fee); if a modest renovation, then there might be money to carry from the closing table.
the 2013 loft
As I mentioned, the loft as just sold for $2.2mm has some modest babbling. Some of the charm of the place is bones or otherwise innate to the loft (“soaring ceilings, stunning light and beautiful tree top views”); the current 3-bedroom floor plan (with the tremendous closet in the top left [southwest] corner) might be an improvement, depending on the renovation. As is, the loft is a very efficient true 3-bedroom in (only) “1,500 sq ft”, a configuration made possible by a long wall of windows east and a single window west.
Modest as it is, the loft was well babbled. The finishes are fine without being luxurious and the glory of the pace is the light and views from that wall of east windows (facing the NYU super block, but still). That, and filling the 3-bedroom utility at what passes for a reasonable price (for those in the 3-bedroom market) due to its relatively modest size. My buyer did not need the third bedroom so was one of (no doubt) many people asking about te wall between the living room and the adjoining bedroom. (Take down about 20 feet of wall and you are left with a much loftier loft, with a truly great room and a third exposed column.)
The crowds and body language at that first (and only) open house made it clear to my buyer that some 3-bedroom buyer was going to overpay for that floor plan, compared to what it would be worth to him or other buyers who would take down those walls.
the 2006 loft
As I hinted, StreetEasy doesn’t make it easy (oof … sorry about that) to get information beyond the sales price, as there is no listing associated with the $1.75mm sale on November 14, 2006. I don’t know how hard it is for StreetEasy to clean up this data set, but the Past Activity tab on the building page will lead you to this 2007 listing, which is an orphan without a unit number but is #3N. (I will explain.) When I saw how the loft was babbled in 2006, I figured the loft was unchanged, between Now and this Then:
picture perfect three bedroom, two bath loft with glorious light and soaring ceilings. 21st Century renovation of Historic Greenwich Village Loft includes new maple floors, new plumbing, new wiring, new windows, new baths and a new state of the art kitchen.
That sounds like a lot of work (a true gut, getting down to the floors, plumbing, wiring, and windows) and much like the 2013 babble. But StreetEasy really doesn’t make this easy, as there’s no 2006 floor plan and only one listing photo surviving. We have a floor plan and 3 interior photos from that 2006 listing in our system and they show that the loft has been changed since 2006. When the recent seller at $2.2mm bought this light and treetop views (with the 21st century renovation) the walls were then arrayed as they are now, but the kitchen was a “U” with an extended breakfast bar (as opposed to the island plus kitchen wall in 2013), there were built-in bookcase in the second bedroom (in addition to the shelves surviving on the left of the entry), and both extra bedrooms featured some form of lofted beds (presumably, for kids to increase the usable space under the 11 foot ceilings and under the lofted beds).
Other than the kitchen, the changes 2006 to 2013 could be modest demolition plus carpentry. And it is hard to say what the kitchen differences (I would ay “upgrades” but he started with “state of the art”, just in a different configuration) might have cost. My guess is that he ripped out the “state of the art” as it would be hard to install “pristine granite countertops and custom cabinetry” to match part of what had been there. Maybe $100,ooo, all in ??
playing with numbers
Remember, only 7% of the difference in value from 2006 to 2013 is attributable to the change in market conditions, if we are getting a good “feel” from the StreetEasy Condo index. If the guy who bought in 2006 at $1.75mm put in (only) $100,000 to re-do some carpentry and the kitchen, he’s looking at a $100,000 renovation that drove $330,000 in market value. I don’t feel comfortable with that, and one day I will have to deal with my discomfort about the StreetEasy Condo Index in a systematic, data-driven way, but that is what the data imply.
Nicely played, sir (and kitchen contractor!); nicely played.