Feb. 27, 2009 - lipstick on a pig, or, buying an overdone ($1mm?) remodel

'pig' is a metaphor, of course
What if you bought a Manhattan loft with not much light and low ceilings, and put a ton of money into it -- really jazzing it up in decidedly not neutral tones -- then decided to sell within 3 years of purchase? How confident would you be of recovering your purchase price and added cost?

In the case of a loft new to market on the fringe of a prime loft neighborhood, the buyers-turned-remodelers-turned-sellers are asking more than $500/ft on top of what they paid. That would make it some upgrade, and a stretch for this building (based on past sales).

one of 8,000,000 stories
This is quite a spectacular loft, actually. But not one that will match the tastes of many people -- so much so that it is obvious that these folks planned to stay a while. (Unless they subscribed to that very old-fashioned notion that money just doesn't matter.) I have no idea what they paid to remodel, especially as the mechanical and other systems were new when this condo was converted earlier this century. But I am very curious about what it cost, as the asking price is 175% of what they paid within 3 years.

shrinking the market
Of course, anything that reduces the depth of the pool of potential buyers will reduce the odds of getting the best price and increase the odds that it will take longer to sell. However spectacular (seriously, it is very dramatic, and all tricked out with toys for boys and for girls), this loft is working against competition that is more central with a less funky street vibe, that has higher ceilings, 'loft' character, and more natural light. They may be down to looking for one of very few possible buyers.

have to, or 'want' to?
If they find themselves in the position that they have to sell, they are trying to thread a very narrow needle at this price. If they have the 'luxury' of time, they are more likely to find that one right buyer, but time (in this market) is probably working against them. Obviously, I am feeling that this is much too pushy for this market, but if that (mythical?) European all-Euro buyer with exactly the right taste arrives and falls in amore it just might work. I remain intrigued by sellers who want to be compesnated for the pain and expense of seriously upgrading a loft (as with yesterday's post, how much is that renovation in the window?).

Let's watch.

© Sandy Mattingly 2009  

Feb. 26, 2009 - how much is that renovation in the window?

adding modest value, or too modest about the value added?
There's a Manhattan loft newly for sale that is asking about $1,300/ft and is described as newly renovated. The prose is rather muted for a renovation (the kitchen, for example, is only described by its size). I really wonder what the renovation cost. The loft is in prime Soho and is big enough to fit into the family-size-with-entertaining-space category.

The renovation resulted in bedrooms that are small by large loft standards, none of which are en suite. There's a good-sized main open area that seems to get a lot of light (and there's that ... errr ... spacious kitchen), but I really wonder what that renovation cost. It is priced as though it had cost enough to be flinging proper proper names, exquisite materials, and custom this-ing and that-ing. Not saying it does not have them; just saying the listing does not say ti has them.

really wondering
Did I mention that I am curious about the cost of the renovation? When the loft sold about four years ago, it cleared at about $850/ft. Did the renovation plus four years add more than $400/ft in value?

A neighbor on a higher floor in a larger loft did not sell three years ago, despite a game effort. That loft was offered at about $1,300/ft and was marketed as a terrific renovation: "custom" this, "fabulous" that, "luxurious" other, with proper proper names. That pricing did not fly then, for a loft that sounds as though it was a better renovation than the one newly for sale. That narrows the time frame in which to assign additional value in the new listing to The market, as opposed to the renovation.

At this point, a definite contender for the too pushy ...? thread. Or maybe (also?) the what year is it? thread. Or maybe just a new why are they so modest? thread. I really am wondering, as you well know by now.

© Sandy Mattingly 2009  

Feb. 25, 2009 - 2005 wasn't bad, was it?

bet the Under
There's a good-sized Manhattan loft in a north Chelsea conversion from earlier this century that sold in August 2005 for $1.575mm. Because they thought that 2008 was not like 2005, they tried to sell about 20% above that, but that did not work. The current asking price is close enough to the 2005 clearing price to suggest the smart money will take the Under, and not the Over on 2009 vs. 2005 here.

This loft does not have the light or proportions of others on higher floors in the same building, but it has a very nice level of finishes, rather high ceilings, a lot of space for the money (well under $1,000/ft), a great location (the nabe grew up around it). My sense is that -- back in the day -- it was priced (and traded) closer to the rest of the building than it will in This Market. (There's a smaller loft that found a contract quickly off an ask much closer to $1,000/ft, for example.) Overall, there is nothing wrong with this loft, but it seems to be being punished for relative disadvantages that did not seem so disadvantageous in other (prior) markets.

If these sellers stick it out, and go wherever they have to go to find a willing buyer, the 2009 clearing price will be lower than it was in 2005. The rest of the building seems to be in a more recent year, which strikes me as strange.

© Sandy Mattingly 2009  

Feb. 24, 2009 - Manhattan loft inventory as of February 22 = 912

Number of Manhattan lofts offered for sale as of Sunday night definitely continues to reflect a bulging inventory, though this week there is a dip: 
 

This is down 16 in a week, while up 232 since my recorded low in mid-August, breaking the streak of four weeks in a row with record inventory in my limited data set (since June).

See my May 19 post for what I am counting, and why it is difficult.

Feb. 23, 2009 - what's wrong with these people? agents who speak out of their ...

Manhattan Loft Guy truculence unleashed: caution
I toured some Manhattan loft open houses yesterday with buyers, and saw some interesting lofts. The "highlight" of the tour was a visit to a loft with a terrific skeleton -- clearly a total gut renovation with a lot of potential (handsome building, high ceilings, big windows, good light), offered by a pretty well-known agent. In the eyes of my buyers (and to my own eyes) the agent was an embarrassment. Farcical, at first, but overall an embarrassment to the firm and the licensing authority.

Feb. 23, 2009 - new Manhattan loft listings + closed sales in last 7 days

This is the sixty-ninth Manhattan Loft Guy report on the number, price distribution and neighborhood distribution for Manhattan lofts reported as new to the market or as closed sales in the last 7 days.

The stats as of Sunday night:

• there were only 9 Manhattan lofts reported as new to the market in the last 7 days and only 7 as sold (after previous weeks of 3, 7, 14 and zip)
• 6 of the 9 new ones are offered between $1mm and $4mm, while all of the 7 sales were offered below $3mm
• only 1 of the 9 new loft listings is in new development, while 1 of the 3 closed sales was in new developments
  
  

  By price	New = 9	Sold = 7
  $500k to $999k	1	3
  $1mm to $1.99mm	2	2
  $2mm to $2.99mm	2	2
  $3mm to $3.99mm	2
  $4mm to $4.99mm	1
  $5mm+	1

  
   

  By neighborhood	New = 9	Sold = 7
  Battery Park City
  Chelsea
  Clinton
  East Village
  Financial District		3
  Flatiron	1	1
  Gramercy	1
  Greenwich Village	1	1
  Kips Bay
  Little Italy
  Lower East Side
  Morningside Heights
  Murray Hill
  Midtown East	1
  Midtown West
  SoHo	2
  Sutton Place
  Tribeca	2	1
  Turtle Bay	1
  Upper East Side
  Upper West Side		1
  West Village

• 
  
   
• New loft listings in new developments

• 53 Warren Street

  1

   
• 
  
   
• Sold lofts in new developments 

  
  

  90 William Street (be@William)	2
  16 West 19 Street (Jade)	1
  415 Greenwich Street (Tribeca Summit)	1

  
  For information about how I get this stuff and why I slice it as I do, see methodology for New + Sold in The Last Seven Days. For my rant about how soft this data may be, see loft or not? caution: active ranting ahead.

Feb. 21, 2009 - 1981 to 2009: progress, or not so much?

© Sandy Mattingly 2009  

Feb. 20, 2009 - 321 Greenwich closes at 5% premium over 2006 price

© Sandy Mattingly 2009  

Feb. 19, 2009 - 2007 = 2009? Soho sellers hope so

Soho loft sold in 2004 for $750/ft in 2004, then for $1,000/ft in a Manhattan heartbeat in 2007 (8 weeks from listing to closing; those were the days...) while in "triple mint" condition. It is hardly prime Soho (at least for residential loft living; I hear the retail traffic is pretty good), and it is in your basic no-frills mature coop. Given the velocity with which it sold at the full ask in 2007, none of these location or building factors were negative factors then.

Feb. 18, 2009 - drip, drip ... this data point points down from 2007 (way down)

not too pushy (now) but not selling (yet)
There's a Manhattan loft that's been on the market nearly a year, with a sobering price history. It started this go-round in the Spring around $1,000/ft and has had four drops since then, totalling more than 20%. But that is not what will make you sober.

The last three drops have all been to prices below the June 2007 sale, and it is now offered for 14% less than the unit sold for then. These sellers are acting as though they really want to sell, in which case we will find out where they (finally) meet a buyer. If they decide they can hang on 'for a while' I suspect this will come off the market soon. We shall see....

The loft is on a funky block (actually, a Manhattan Loft Guy fave), in a no-frills mature coop in which a "renovated and restored" unit sold at $1,000/ft in late 2007. But the current difficulty is not the funk, the frills or (likely) the finishes. Yes, Virginia, The Market has changed. For this loft, by at least 14% in 20 months.

Extrapolate at your own risk, of course.

   

© Sandy Mattingly 2009  

Feb. 17, 2009 - Manhattan loft inventory as of February 15 = 928

Number of Manhattan lofts offered for sale as of Sunday night definitely continues to reflect a bulging inventory: 
 

This is up only 2 in a week (after 46 two weeks ago), while up 248 since my recorded low in mid-August, and the fourth week in a row with record inventory in my limited data set (since June).

See my May 19 post for what I am counting, and why it is difficult.

Feb. 16, 2009 - new Manhattan loft listings + closed sales in last 7 days

This is the sixty-eighth Manhattan Loft Guy report on the number, price distribution and neighborhood distribution for Manhattan lofts reported as new to the market or as closed sales in the last 7 days.

The stats as of Sunday night:

• there were 23 Manhattan lofts reported as new to the market in the last 7 days and only 3 as sold (after previous weeks of 7, 14 and zip)
• 19 of the 23 new ones are offered between $1mm and $3mm, while the 3 sales were offered between $1mm and $3mm
• only 3 of the 23 new loft listings is in new development, while 1 of the 3 closed sales was in new developments
  
  

  By price	New = 23	Sold = 3
  $500k to $999k	1
  $1mm to $1.99mm	11	2
  $2mm to $2.99mm	8	1
  $3mm to $3.99mm	1
  $4mm to $4.99mm	1
  $5mm+	1

  
   

  By neighborhood	New = 23	Sold = 3
  Battery Park City
  Chelsea	1
  Clinton
  East Village	2
  Financial District	2
  Flatiron	2	1
  Gramercy	1
  Greenwich Village	5
  Kips Bay
  Little Italy
  Lower East Side
  Morningside Heights
  Murray Hill
  Midtown East
  Midtown West
  SoHo	4
  Sutton Place
  Tribeca	4	2
  Turtle Bay
  Upper East Side	1
  Upper West Side	1
  West Village

• 
  
   
• New loft listings in new developments

• 83 Spring Street

  3

   
• 
  
   
• Sold lofts in new developments 

  
  

  140 West 22 Street (The Clement Clarke)

  1

  
  For information about how I get this stuff and why I slice it as I do, see methodology for New + Sold in The Last Seven Days. For my rant about how soft this data may be, see loft or not? caution: active ranting ahead.

Feb. 14, 2009 - what's the renovation worth? pushing it in non-loft-ville

2 years + 1 reno = $400k (or not)

Ofttimes the Manhattan loft buyer looking for 'value' must go far afield, away from the loft havens (Tribeca, Soho), to make 'a deal'. One such possible opportunity is today's candidate for the too pushy ... or not pushy enough? thread. Because it is in this thread, it may not yet qualify as 'a deal', but patience is sometimes rewarded.

The loft traded almost two years ago under $750/ft (not counting some lovely outdoor space). Since then, there has been an extensive (but not gut) renovation, of which the owners have tired, it seems. They are offering their lovely 2 BR + 2 bath space for under $950/ft (don't forget the outdoors). My guess is that the renovation cost less than $200/ft (perhaps much less), so that the current asking price is probably greater than the sum of (a) what they paid two years ago and (b) what they spent to renovate since.

Dicey proposition, that.

Someone who loves the renovated space and nabe may find it too attractive to pass up under $950/ft (+ outdoors!). Or The Market may find this just too pushy.... Until the price changes, of course.

© Sandy Mattingly 2009

Feb. 13, 2009 - disconnect / sellers struggle to find The Market

The Miller graphs it
Interesting graph on yesterday's Curbed contribution from The Miller, Three Cents Worth: Listing Discount A Spiked Punch . Bottom Line is that what The Miller calls Listing Discount (the gaps between the last listing price and the contract price) was 7.3% in 4Q08 and 8.9% in January for closed Manhattan coop and condo transactions -- twice as high as in any quarter going back through 2004. In response to my question in the comments,The Miller cited (further down the thread) to one of his earlier charts that shows listing discount by quarter going back to 1997, showing that the 4Q08 listing discount barely exceeds those of the first two quarters of 1997 and that listing discount has not touched even 5% in any quarter but one in the last ten years.

It has been a long time (and we've been through some very different markets) since there has been as large a gap between seller expectations and hard-nosed buyer negotiating as in the last quarter. And the data for January 2009 trends still higher ... to 8.9%.

is this about seller behavior or buyer behavior?
My first thought was that this (previously unheard of) gap in January reflects sellers being unable to figure out where The Market is, then negotiating on the fly. But I wonder if the gap is more about buyers adjusting to The Market by making low-ball bids more often than in past times, and then sticking to lower numbers when sellers actually negotiate off the low-ball bids. (Or maybe it does not matter what it means?)

arrggghhhh ... it means something; I'm just not sure what.

 

© Sandy Mattingly 2009  

Feb. 12, 2009 - 99 cent pricing on eBay leads to $400/ft under-pricing by FSBO loft seller in Noho

I believe that these four building sales in 2006 show that the Manhattan real estate market (at least for lofts) is just not very efficient. In those frothy market days, #6B sold later for $44,000 less than #8B even though #6B had been recently (truly recently) and stunningly renovated, while #8B had a kitchen they admitted needed updating. I'd say that the only advantage that #8B had then over #6B was about 24 feet ofhigher view/better light and that a truly efficient market would have valued #6B over #8B by nearly the cost of upgrading #8B's kitchen to match #6B's ($50k-$75k??) instead of #8B having been valued at +$44k.

The spread between #10B and #6B also shows inefficiency. Although #10B was another 24 feet or so higher than #6B and probably had an even nicer renovation, these differences do not account for the $349k gap in trading prices. That is more than a 20% discount for #6B off of #10B's clearing price. (Of course, asserting that that market at that time in that building was inefficient means that I cannot say which price was 'right', and which was 'wrong'; I can only say that they don't correlate.)

The current #6B FSBOs have clearly thought all this through. They are counting on getting enough exposure (and enough bidders) to assure efficient pricing and that buyers will trust them enough to play the game under the rules they have set. Gotta appreciate their faith (and hope). I am happy to do my small part in providing a bit more exposure.

To repeat: good luck to them.

© Sandy Mattingly 2009  

Feb. 11, 2009 - (kinda) quick trip to closing, but a long trip off ask at 147 Waverly Place

A project converting 147 Waverly Place in the West Village to condos had to contend with another unusual structural detail -- a heptagonal, or seven-sided, building. Some of the 20 half- and full-floor condos in the building feature as many as seven exposures, a definite draw for buyers who want views. The potential downside of working with a seven-sided building is that rooms could have unusual shapes, but that was minimized.

***

Because of limited floor space, common hallways were eliminated. Instead, the building was outfitted with two banks of elevators so elevators open to each individual apartment.

Feb. 10, 2009 - diversion / art from a Manhattan loft neighborhood

Feb. 10, 2009 - Manhattan loft inventory as of February 8 = 926

Number of Manhattan lofts offered for sale as of Sunday night definitely continues to reflect a bulging inventory: 
 

This is up only 4 in a week (after 46 last week), while up 246 since my recorded low in mid-August, and the third week in a row with record inventory in my limited data set (since June).

See my May 19 post for what I am counting, and why it is difficult.

Feb. 9, 2009 - new Manhattan loft listings + closed sales in last 7 days

• there were 25 Manhattan lofts reported as new to the market in the last 7 days and only 7 as sold (after last week's 14 and the previous week's shut out)
• 16 of the 25 new ones are offered between $1mm and $3mm, while 3 of the 7 sales were offered between $1mm and $2mm
• only 1 of the 25 new loft listings is in new development, while 4 of the 7 closed sales were in new developments
  
  

  By price	New = 25	Sold = 7
  $500k to $999k	5	1
  $1mm to $1.99mm	12	3
  $2mm to $2.99mm	4
  $3mm to $3.99mm	2	1
  $4mm to $4.99mm	1	1
  $5mm+	1	1

  
  
   

  By neighborhood	New = 25	Sold = 7
  Battery Park City
  Chelsea	4
  Clinton
  East Village	2
  Financial District	4
  Flatiron	2	2
  Gramercy
  Greenwich Village	2	1
  Kips Bay
  Little Italy
  Lower East Side
  Morningside Heights
  Murray Hill	1
  Midtown East
  Midtown West
  SoHo	3
  Sutton Place
  Tribeca	5	4
  Turtle Bay	1
  Upper East Side
  Upper West Side
  West Village	1

• 
  
  
   
• New loft listings in new developments

• 311 West Broadway (Soho Mews)

  1

  
   
• 
  
  
   
• Sold lofts in new developments 

  
  

  140 West 22 Street (The Clement Clarke)	2
  415 Greenwich Street (Tribeca Summit)	2

  
  For information about how I get this stuff and why I slice it as I do, see methodology for New + Sold in The Last Seven Days. For my rant about how soft this data may be, see loft or not? caution: active ranting ahead.

© Sandy Mattingly 2009

 

Feb. 6, 2009 - pushed it just enough for contract, eventually

April = then; February = now
I can't wait to see how this ends, but the listing history of this newly-in-contract, current century, high-end Manhattan loft condo conversion is fascinating enough to warrant a comment even before the clearing price is clear. The layout is 2 bedrooms plus 3 baths and the building amenities package is rather over-the-top. The last sale in the building was pre-Lehman, a bigger space, a quick sale, and just pennies off the ask (nearly $1,700/ft). Here's that fascinating history for the one newly-in-contract:
 

• on the market in Spring 2008 (between the last sale going to contract and its closing date) above $1,600/ft
• price drop after 6 weeks
• second price drop after 9 weeks
• accepted offer after 3+ months (that fell through)
• third price drop after 6+ months
• fourth price drop after 8 months (total price drops = 20% off original price)
• contract after 10+ months (at what discount from the [reduced] ask??)

Remember: that last sale was at a slightly higher price-per-foot than this one started at, and sold quickly at (essentially) full ask. Need further proof that the Winter 2009 Manhattan loft market is different from the Spring 2008 market? I will keep an eye on this loft for a clearing price, but in the meantime, just look around....