Aug. 29, 2009 - modesty rewarded, but 'how well?' remains the question

sometimes Manhattan Loft Guy gets it right
I posed a question on July 8 that was answered very quickly: will pricing 25% below 2007 hit The Market in a sweet spot?  The answer came in an update on StreetEasy the very next day: contract signed. It sure is nice to get an answer; better, an answer that supports one's general thesis....

The loft in question has not yet closed (so will remain anonymous), but found a contract in a somewhat thin market within 3 weeks. Nice work, that. I may not be able to identify this loft until a while after it closes, as the stubborn neighbor upstairs ("an upstairs neighbor has been stubborn, and offering another (essentially identical) loft at more than 20% above the new asking price, without generating a contract in the 8 months that has been offered") has still not generated a contract and has not bothered to change the price -- the hallmark of a seller waiting for a listing to expire. If it expires, I will be able to come clean about this building (one of "the roller coaster of brand name loft conversions in nabes that are tres fasconable"); if not, you will remain in the dark.

I reviewed on July 8 the building's listing history since the newly-converted-loft was converted in 2005, which involves considerable up-ing and down-ing. Hence my final comment on July 8 about the soon-to-be-in-contract-but-hardly-on-the-market sellers: "At a minimum, they are ignoring much of the background noise of the intervening roller coaster years. Props to them for that." That ignoring thing can be hard.

Jul. 1, 2009 - (too rich, too thin) too stylish to sell (well)?

Apr. 17, 2009 - break away to win the neighborly competition / so many lofts, so many dollars ... but no sales (yet)

© Sandy Mattingly 2009 

Apr. 11, 2009 - the problem of price discovery (hint: you have to pay attention)

if a tree falls in the forest ...
I've been mulling a long-ish post on price discovery for quite a while (not writing it, obviously; just mulling). Pulling together some interesting riffs by other bloggers and news articles and market activity (and market inactivity), all in service of the idea that one of the problems with The (current) Market is that it is so thin that it is hard to know where the right price is for a particular Manhattan loft. In that situation, with actual loft closing information rather scarce, it is critically important that sellers pay attention to prices that do not work. Seems kind of simple, no? (simple as in simpleton, btw)

Perhaps this will be a start of a string that will, together, compose a long-ish post on price discovery ....

A new Manhattan loft listing in out-of-the-way Tribeca reminded that there had been an interesting loft offered for sale in that same building last year ... I wondered what happened to that one? I noted just now that that one did not sell, after having been offered for about 3 months. So, we learned that that price for that loft ($1,300/ft) did not work,right?

Then I noticed that yet another loft in that building that has been for sale for most of the last 7 months for just over $1,000/ft. So, you'd think we've learned that that price for that loft does not work either (no price change in 7 months is pretty stubborn, no?). But that one is still "on the market" in the sense that it is an active listing, and perhaps in the sense that they will entertain any offers -- though they are unlikely to get many.

if a price fails in The Market, but no one is paying attention ...
That new one? Offered at $7/ft less than the unsuccessful-for-7-months loft (one dollar off per month??).

head-scratching ensues (no hilarity, yet)
As far as I can tell from the prose, pix and plans, the three lofts in question are in comparable condition.

As far as I can tell, The Market has resisted Loft #2 (in our sequence above) at about $1,000/ft. As far as I can tell, there is no reason to think that a $7/ft "discount" on Loft #3 will be any more attractive to The Market. As far as I can tell, the seller (and agent) for Loft #3 learned nothing from the (non)sale of Loft #2, which has lasted 7 months -- so far.  Head scratching ensues ....

 

© Sandy Mattingly 2009

Apr. 2, 2009 - can an address provide enough oomph?

pricing like it's 2008
One of the risks of pricing a Manhattan loft above The Market, of course, is that no one will visit, let alone bid, because there are alternatives that start at lower-prices. (I discussed this most recently, in a cowardly fashion, on March 25, am I a coward? assessing + bearing risk in a risky world .) But what if the building has a strong history? Can a building be enough of a draw to ensure that 'enough' buyers will visit 'anyway'? Can a seller reasonably expect to attract buyers in 2009 by asking 2008 prices because the building has been a draw in the past, leaving (an otherwise risky level of) negotiating room? (When will Manhattan Loft Guy stop with the rhetorical questions and get down to it??)

if it takes a Village, can a building suffice?
Of course I have a building in mind. Lovely Greenwich Village loft conversion; now a very mature coop; a very handsome loft building on a beautiful loft block. A handful of sales in this building last year took just a few weeks to get into contract -- typically at, above or at a very small discount from full asking price --  certainly evidence that The Market loves well-priced lofts in this building, and evidence (perhaps) that The Market simply loves this building.

here's the rub
Each of the handful of 2008 sales went into contract before Lehman.

here's another rub
Each of the handful of 2008 sales sold in the range above $1,000/ft, while two were at or above $1,100/ft.

when the rubbing meets the road
The new-to-market loft is priced just above the price/foot level of any of that 2008 handful. The new-to-market loft is marketed based on space and character (and on the building), rather than on its finishes or renovation; the handful from 2008 liberally tossed mints, named proper proper names, and generally bragged.

From a purely marketing perspective, the new seller is asking a slight premium to 2008 pricing for a unit that is not described as a peer of those that got 2008 pricing (way back in 2008, of course), as if the seller is confident that the building is enough of a plus factor to overcome an aggressive price. From a purely Manhattan Loft Guy perspective, this charming loft in a handsome classic loft building on a beautiful Village block is today's candidate for the too pushy ...? thread. Needless to say, I would be too afraid to rely on the address to attract buyers at this price level, but courage is sometimes rewarded....
 

© Sandy Mattingly 2009  

Mar. 19, 2009 - 50 Walker Street closes well off August ask after being publicly negotiable + serving bourbon

not like yesterday
The full history of the Manhattan loft #6A at 50 Walker Street will reveal just how different this marketing campaign was from the loft addressed yesterday (why be that negotiable in secret? 25 Ann Street closed nearly 25% off ask ), but for now (before the clearing price is known) the difference is sufficiently stark and (in relation to 25 Ann St) sufficiently timely to warrant a post. (Side note to the chasing-a-dream Anon from March 15: this is the kind of timely + relevant info I like to provide, but the trade-off is that it won't be complete until ACRIS is updated with the actual sale price.)

a truly spectacular loft (did a grandparent buy?)
This loft has been one of my favorites since it came to market last August, just weeks before Lehman, when the world was a different place. In fact, I have twice drafted posts about it, but have never finalized them for one reason or another.  (The part of the PruDE listing captured by StreetEasy is here.) The loft is only "1,600 sq ft", set up as a 2 bedroom, but it is (to my loft-y snobby eyes) beautifully finished and there is "1,000 sq ft" of private roof deck. As the broker-babble has it, "old Tribeca meets the 21st Century". I've had it high on my list of classic-lofts-with-outdoor-space, but haven't had one of those buyers while this has been available.

The loft was featured in a NY Times article on November 14 about a one night 4-stop loft tour with whiskey and bourbon. They served bourbon at 50 Walker Street, the last stop on the tour. Although the reporter liked the loft (it "seemed like a bargain"), one philistine 24-year-old-trader sniffed: “It’s cool, but it’s kind of like a museum,” he said. “It feels like my grandparents’ house.” Dude must have cool grandparents, no?

no secrets
Ii have watched the price history with interest, and not  a little sympathy for the owner and the experienced agents who manged this process:

• 8/13/2008  to market at $3,195,000
• 10/08/2008 drop 9% to $2,895,000
• 11/12/2008 drop 3% to $2,795,000
• 11/18/2008 drop 4% to $2,695,000
• 2/05/2009 drop 7% to $2,495,000
• 2/12/2009 contract

It was updated yesterday as Sold & Closed, ironically at about the same time I posted about the

negotiability of 25 Ann Street #4 which -- I have to believe -- cost that seller some money. Nothing secret about the intentions of the seller at #6A 50 Walker Street ... drop the price to find The Market. Assuming (optimistically) that #6A got the last ask, there is a 22% spread between start and finish (more likely, the spread will be higher when the trading price is available).

This seller recognized the problem (though not its scope) within 60 days, lopping 9% off the original price. This seller waited only another month to drop again by six figures, then tried again almost immediately, to head into the 'holiday season'. This seller then gave the New Year a chance to see if it would bring a new set of buyers and -- when it did not after 35 days of New Year -- dropped the price another $200k.

price found The Market.

No buyer that was at all interested in a loft like this could have mistaken this seller as one who would not negotiate -- the owner made four public announcements to that effect. In contrast, 25 Ann Street #4 had one price change and one change in firm over 4+ months before negotiating a deal 23% off the last asking price. My point yesterday was that they'd have done better if they had been more public about their willingness to compromise. Most buyers are likely to have interpreted the refusal to drop that price again as implying that the seller was not very negotiable.

I suspect that the buyer for #6A at 50 Walker Street did not negotiate a deep discount off the last asking price, but time (and ACRIS) will tell....

© Sandy Mattingly 2009  

Mar. 14, 2009 - diversion for a Saturday

comedy or tragedy? you decide
My eyes almost popped out when I saw an all-agent e-blast about a new price for a Manhattan loft that happened to get through my junk filter. (Note to self: fix filters.) Then I scratched my head, not sure how to react to this sequence of price changes.

I ended up totally unsure how to frame this, but I invite you to consider the likely conversations between agent and seller implied by this history and to decide for yourself if this is farce or drama:

• new to market in January for $1.75mm
• 1 week later $1.65mm
• 2 weeks later $1.595mm
• 3 weeks later $1.495mm
• 6 weeks later (another price drop, but I don't want you identifying this loft, so I will keep that detail to myself)

Is this evidence of a preconceived plan, or of a shouting match between seller and agent?? I'd love to hear some comments on this....

© 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.

Jan. 28, 2009 - out of range, out of mind ... setting records or delaying sale?

pay the price if they don't pay attention
The risk in pricing a Manhattan loft above where anything in a building has sold is that potential buyers will be turned off by the price before considering the plus factors you tout to justify a record price. In this market, that is a risky approach -- anything that shrinks your potential buyer pool will make a sale take more time, or not occur at all.

Nothing controversial about that paragraph is there? Depends on where the rubber meets the road, I guess.

pricier than Whole Foods
This hard rubber is meeting the road somewhere in the Greater Whole Foods Meets Trader Joe's area sometimes known as Union Square. There's a lovely Manhattan loft new to market this month with much bragging: proper proper names, classy materials, thoughtful details; all in all a myriad of ways that this loft exceeds in quality (byimplication, at least) anything that has ever sold in the building. The risk they run is that this thing is priced about $250/ft higher than anything else that I see that has sold in the building -- and those sales were in much better than estate condition.

not a Filene's Basement price
This hard rubber also meets the road near where Chelsea and Flatiron intersect, or overlap. There's another lovely loft newly for sale in that area that was purchased in 2005 under $1,100/ft but is nowoffered nearly $400/ft higher. Yes, 2009 is not 2005 ( doesn't that cut both ways!), but $400 should have paid for a deluxe plus ultra renovation. I am not sure that even very good marketing will draw enough eyeballs into this space.

I wonder how many people will even go visit these lofts to be dazzled into paying a large premium over building norms. Looks like two candidates for the too pushy ...? thread to add to the Manhattan Loft Guy watchlist.

 

© Sandy Mattingly 2009  

Dec. 1, 2008 - to Chelsea to push the too pushy ...? thread

pushy, pushy, pushy (or not)
This week's Chelsea candidate for the Manhattan loft Goldilocks question (we started this thread on November 14 with two in 2 new Tribeca lofts too pushy or just pushy enough?? and have been reheating it like last week's stuffing ever since) was fully renovated since it closed three years ago around (if the square footage number is right; I have my doubts) ... (wait for it) ... $350/ft. (Yes, that first digit is a three.)  It is new to market last week, above twice that.

My guess is that this one is on the "too pushy" side rather than the "not pushy enough" side, particularly as it remains ideal for someone allergic to sunlight. It took a long time to sell last time, so be patient. The Market will decide. I will report.
 

© Sandy Mattingly 2008  

Jul. 31, 2008 - lux diversion / Time Warner or 165 Charles as better "investment"?

not much gain for Portman
Braden Keil's Gimme Shelter grab bag in today's NY Post (hat tip to Curbed for pointing it out) mentions two celebrity Manhattan real estate transactions that caught me eye, though neither involves a real loft. The first 'news' is that Natalie Portman is selling her "convertible three bedroom, three bath apartment" (with "2,500 sq ft") at 165 Charles Street on the market for $6.55mm, but what startled me is that she reportedly paid $5.7mm in 2005. Assuming (big assumption) that she gets full ask now, her net-net gain calculation starts at $850k -- before melting away. Her transaction costs on that sale will be (in round numbers and at a minimum) 5% broker commission (they are offering 2.5% to a buyer agent) and transfer fees to NYC and NYS of 1.825%, or nearly $450k. Assuming she paid transfer taxes on her way in in 2005, that's another 1.825% on that $5.7mm purchase, or another $100k.

So, $550k of her $850k 'gain' is eaten up by round number big ticket transaction costs, whether she paid cash or secured a mortgage and assuming she gets 100% of her asking price on the way out. At least she won't have to worry too much about capital gains taxes....

Costas does well
The contrast to Bob Costas experience at the Time Warner Center (reported in the same column) is remarkable. Costas has already closed on his sale of a 61st floor 3-bedroom for $8.5mm. Like Portman, he bought his unit in 2005, but he paid 'only' $4.95mm, so his net-net gain calculation starts at $3.55mm (four times Portman's if she can sell at 100% of ask) and doesn't melt away much. He will be pleased to pay his significant capital gains, I am sure.

representative values?
I have no idea if these two transactions (actually, one transaction and one marketing effort) are representative of values in their respective buildings. But the 3-year-appreciation contrast is stark: less than a 15% gain for the Stars Wars gal if she gets her ask at 165 Charles Street, vs. 70% for the Sports Guy at the Time Warner Center.

Not that you should look at your home as an investment or anything....

© Sandy Mattingly 2008

Jun. 26, 2008 - head-scratching over $650/ft and outdoor space

Apr. 7, 2008 - past the point of pain at 32 West 18 Street w new price drop

Apr. 3, 2008 - ... 3 (more) french hens ... 2 (more) price drops (477 Broome + 28 West 38 St)

Mar. 19, 2008 - drip drip / price drops at 124 Hudson + 684 Broadway to and from $3.05mm

Feb. 16, 2008 - price drops at 684 Broadway, 49 Warren, 249 Church

Dec. 4, 2007 - raise, drop (rinse), repeat / loft pricing theory, explored

Nov. 14, 2007 - 34 E 30 finally in contract, as in Best & Finally

Oct. 22, 2007 - the Tribeca premium, anticipated / a tale of 2 lofts

Jun. 28, 2007 - how The Market can change / NY Times reported sale at 684 Broadway