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