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Manhattan Loft Guy

Sep. 7, 2013 - TYAToMLG: a great counter counts summer contracts + listings

 

old market trends never really get old

On Thursday I used The Miller’s new way of cutting the 20-year Manhattan residential real estate market into 8 eras in service of a post about a particular Tribeca loft with a long history of its own (September 5, 90 Franklin Street loft history more like a moving picture than a market snapshot). Today I look back at another of my favorite Manhattan real estate data geeks as a kinda sorta diversion from the daily grind post about recent loft sales as a Three Years Ago Today on Manhattan Loft Guy retrospective about using contracts and new listings as market indicators.


In my September 7, 2010,
visualizing The Market / Manhattan real estate fun at Urban Digs, I used a post by the essential Urban Digs:


[in his] (The August Lull) look[ed] at monthly data for contracts signed and new listings, back to 2008. What he's focused on is the Very Slow Summer we've had (for both contracts and new listings, both starting to slow down in May this year), but what struck me visually was The Lehman Effect.


Look especially at the way contracts signed fell off the cliff from October 2008 through January 2009, then slowly (very slowly) increased during February through April 2009. Nuclear winter, indeed. Of course, you may find other things here that will grab you.


For you folks who want current data (can’t we just live in the past once in a while??) I can’t help you much, but there is this helpful June 1 post from Digs looking at contract volume by month 2009-2013. While it (obviously!) does not contain this Summer’s contracts, your consolation is that you see that every one of the first five months of 2013 had higher contract volume than any of those months 2009-2012. To keep it apples-to-apples I will look for future Digs data for this Summer’s contracts, but expect that trend to continue.


All these charts from Urban Digs make up a diverting way to spend some time if you have to be inside on this beautiful weekend. And … if charts are diverting for you.

 

Note to self ... harass The Digs to blog more, preparation for his new website be damned!


© Sandy Mattingly 2013


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Jul. 13, 2013 - memory lane: on outliers, or Bright Shiny Objects, this one a penthouse loft at 121 West 20 Street

 

Two Years Ago Today on Manhattan Loft Guy

You were warned in my July 4 post that you’ve got a couple of weeks of archived Manhattan Loft Guy material coming up; we are nearly done with that. In my July 13, 2011, penthouse loft at 121 West 20 Street beats Peak, but is it rational?, I considered a loft sale that did not make sense. Here’s what I said 2 years ago today:

Of course you know that any single number to summarize The Market (whether the entire Manhattan residential real estate market or the loft niche) smooths out a great deal of data noise. Some data points are close to the average or median, some are a bit higher or a bit lower, and even fewer (generally) are much higher or lower than The (overall) Market. I will leave the metaphysics of that for another day (note to self …), but will note that the outliers are the bright shiny objects that tend to attract a lot of attention.

When you deal with individual data points all the time it can be hard to see forests for the trees; in this case:

A lot more bright shiny objects like these and we would say that The Market for Manhattan lofts is back to peak pricing … but of course we don’t have a lot of similar paired sales. (Another note to self: check paired loft sales, 2008 and 2011.)

The Market did not get there in 2011. We have seen a bunch of these in 2013 (in which we may be back to peak pricing), which is part of what we see as bright, shiny objects.

 

© Sandy Mattingly 2013

 

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Jul. 8, 2013 - memory lane: real-time reporting on changes in The Market for Manhattan lofts

 

Three Years Ago Today on Manhattan Loft Guy

You were warned in my July 4 post that you’ve got a couple of weeks of archived Manhattan loft Guy material coming up. In my July 8, 2010, another sign that 2010 is not 2009, as 60 West 15 Street loft sells, I looked at one Manhattan loft sale as a snapshot indicating how far The Market had come from the nuclear winter (becoming the thaw) of 2009, one year later. As I have often done in looking at 2013 successful sales of lofts that did not sell in 2012 or 2011, this post looked at a non-sale in 2009 and a closing in 2010.

The money quote:
 

[the loft] had been on the market last year, from April to November, asking $3.5mm, proving that that was the wrong price in that market. When they brought it back this year (January 22) and found a contract within 7 weeks (March 11), they proved they had found the right price, right? Right, indeed, but the successful 2010 asking price was the same $3.5mm as the unsuccessful 2009 asking price, and it was pretty successful, indeed, as it generated a deal at $3.45mm, a mere 1.4% discount.


I even referred to another real-time market assessment
 

Yesterday's post, 12 examples of the (rapid) velocity of the Manhattan loft market, provided data confirmation that the velocity of the Manhattan loft market was pretty high, at least for the last three months.

From the front lines, in retrospect, and from Chile, in advance, Manhattan Loft Guy.

 

© Sandy Mattingly 2013

 

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Jun. 4, 2013 - revisiting the NY Times "time to PANIC!!!" piece with more (contrary) Manhattan loft sales data


what does “almost becoming the norm” mean in TimesSpeak?
The inter-tubes are still buzzing over that main real estate article in Sunday’s New York Times,
In A Seller’s Market, Every Minute Counts, which I hit in my same day post, June 2, not every buyer should panic: that scary New York Times article is right, to a degree. My ambivalence about the well-reported article by Michelle Higgins was clear enough, I hope:
 

There’s nothing in the article that is wrong ... and much that is right. But it worries me, in the way that report of hysteria can have the effect of increasing the level of hysteria. Of course there are many bidding wars, and many loft sales above ask ... just as there are many quick contracts .... And, of course, inventory is consistently at historical lows, with no signs of an increase.

But it isn’t like that for all buyers and sellers, though now nearly all buyers are tempted to panic, and nearly all sellers are tempted to be very demanding. (Tip #3: “forget about getting a deal”.)


I re-read the piece last night, and found something that really does bother me that I glossed over in my first reading and attendant rush to add some data to the discussion. The lede is both hysterical, and unsupported by the reporting; worse, it is probably unsupportable (a polite way of saying “wrong”). I will
emphasize my beef:
 

If there was any doubt that New York City real estate has become a seller’s market, consider the following: open houses are packed to capacity, bidding wars and all-cash offers have almost become the norm, and some listing prices actually rise, not drop, after a home is listed.

I have no problem with the open house packing or that “some” listing prices rise, though the first is more relevant to her point than the second, at least until she shows how many prices increase after listing. I have no idea what Higgins really means by “almost become the norm” but I suspect that most readers will take that to mean something like almost half, if not more. (A Times editor might well think that to be a “norm” requires a more-than-half rate of occurrence, to be usual, typical, or standard.)

is Humpty-Dumpty a NYT editor, or has NYT gone through the looking glass?
The article has some
horror stories anecdotes about bidding wars and the advantage that all cash buyers have over buyers who need both a mortgage and an appropriate appraisal value, but no hard data. Not even a perfunctory quote from a mortgage lender or from The Miller “we are seeing many more all cash deals than in prior markets”. That would be something. But I want to pick at the bidding war element, because I do have data, and the Manhattan loft market niche data do not support that claim that “bidding wars ... have almost become the norm”, unless those terms have no rational limit.

I used a data set of the most recent 150 Manhattan loft sales for which I have complete data on my
Master List of Manhattan Lofts Sold Since November 2008, not because 150 was a round-ish number, but because that takes me back to a round date, for downtown Manhattan loft sales since March 1 between $500,000 and $5,000,000. As I said in that Sunday post,

33 sold above the asking price and 25 sold at the asking price (N.B., the ask is not always the original price and some bidding wars result in below-ask contracts)


Can we agree that 33 out of 150 (22%) is not “almost becoming the norm”?

The Master List permits you to check the green (above ask) sales prices against the blue (not discounted) asking prices; you will find that 5 of the 33 bidding wars were off prices that were discounted. It is fair to count them as “bidding wars” but further review (at least in the downtown Manhattan loft niche) reveals that only 28/150 were bidding wars that could cause a well-grounded buyer to consider panicking. If the buyer finds a unit that has been on the market for some months and then has a (too low) price drop, it is that buyer who lost an opportunity by not bidding (without competition) off the second-to-last asking price.

 

My quoted Note Bene was that there may well be bidding wars that result in deals below asking price (a bidding skirmish, if you will). The provocateur reporter Higgins could fairly count those, if she were counting at all, but she’s not. Only the parties and agents in such transactions would know if they did, in fact, involve multiple bids, but in my experience the “tell” for such a deal is a closing price ending in other than “000” or “500”, especially with a fairly quick contract. There are only 4 of those public deals, at $1,236,750, $2,583,300, $3,382,626, $2,365,471, but 3 of those had been on the market more than 11 months. That $3,382,626 sale was almost certainly a below-ask bidding war, as 60 Collister St #1D took only 14 days to find a contract at a modest (3%) discount from ask.

So I am going with the ‘fact’ that there were 34 bidding wars out of the last 150 downtown Manhattan lofts sold publicly between $500,000 and $5,000,000. Can we agree that 23% is not “almost becoming the norm”? Subtract the 5 above-
discounted-ask sales, and you get 29 sales out of 150 (19%) in which buyers would panic, if so inclined. Further from being “almost” a “norm”.

Funny thing is, the article does not need the line about bidding wars “almost becoming the norm” to make the general point that,
for some buyers, every minute counts. Higgins oversold and under-delivered about the bidding wars, as there is no support for the norm-becoming statement and downtown Manhattan loft sales data disproves the statement.

I suspect (don’t make me count again today,
please) that there are more above ask sales lately than in prior quarters, and Higgins could probably easily have gotten someone credible to approximate that in quotable fashion. But she didn’t do that (and an editor didn’t insist); worse, what she did say is both more provocative and wrong.

That’s what I don’t like about the article. She’s wrong and hysterical. But now The Public “knows” that “bidding wars are almost becoming the norm”, because some lady at The Old Grey Lady said so on Page One of the Sunday real estate section. In the first sentence, no less.

Alas.


© Sandy Mattingly 2013

 

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Jun. 2, 2013 - not every buyer should panic: that scary New York Times article is right, to a degree


at least, not every buyer should always panic

If you are a buyer actively searching for a Manhattan coop or condo, chances are good that someone you know or love has already scared you with In A Seller’s Market, Every Minute Counts from the New York Times, perhaps even days before it appeared Sunday Real Estate section (it hit the web on Friday). Chances are close to 100% that you will have seen the hard copy of the New York Times Real Estate section casually left on a kitchen counter or coffee table at several open houses you went to today. You know that provocateur reporter Michelle Higgins tells a few horror stories (with choice quotes from buyers, sellers and, of course, agents) but she also offers 10 tips to buyers who find themselves in competitive bidding situations or who wish to induce a seller to avoid that process. So there’s that.

There’s nothing in the article that is
wrong (and it has already gotten a “GREAT READ articulates current pace” link and re-tweet from The Miller on The Twitter), and much that is right. But it worries me, in the way that report of hysteria can have the effect of increasing the level of hysteria. Of course there are many bidding wars, and many loft sales above ask (as readers of this blog and people who know what the green background on the Master List of Manhattan Lofts Sold Since November 2008 know), just as there are many quick contracts (the red-ish background on the Master List). And, of course, inventory is consistently at historical lows, with no signs of an increase.

But it isn’t like that for all buyers and sellers, though now nearly all buyers are tempted to panic, and nearly all sellers are tempted to be very demanding. (Tip #3: “forget about getting a deal”.)

data = good, more data = gooder
Higgins uses enough data to support her thesis to show how hard it is for the media to get timely and useful data about the Manhattan residential real estate market. This first sentence is good, hard data, but hardly refined enough to support the rush-rush-rush scenario, while the second sentence is more anecdote than data, and an unattributed anecdote at that:

 

Apartments are going into contract at a faster pace, with listings lasting 105 days on the market, down from 156 a year ago, according to Miller Samuel. In popular neighborhoods like the West Village, it’s not uncommon for sought-after properties to go into contract well above the asking price in the head-spinning span of 10 days or less.

 

It would be nice to know what “it’s not uncommon” means, wouldn’t it? Especially if you were interested in buying in a popular neighborhood like the West Village … or a downtown loft.

I have done “4 colors of downtown Manhattan loft momentum” posts based on the Master List (in addition to green for above-ask sales and red-ish for contracts within 30 days, there’s a yellow for sales
at ask and a blue for lofts that sold with no price drop off the original price) on April 25 and April 4, as you regular Manhattan Loft Guy readers know.


loft data = goodest
My suggestion is that buyers not panic (and sellers not gloat) without talking to their agents about the specific market case for a particular loft at a particular asking price. My fear is that the Higgins piece will cause both more panic and more gloating than an individual analysis would warrant, but … that’s how you sell newspapers, and get eyeballs on the inter-tubes.

Fortunately for those of you who access the Master List, you’d know that of 150 downtown Manhattan loft sales with full data in March, April and May (so far), 41 went to contract within 30 days, 16 of those within 14 days; 33 sold above the asking price and 25 sold at the asking price (
N.B., the ask is not always the original price and some bidding wars result in below-ask contracts). On the other hand, 78 of that 150 loft sale data set took 90 days or more to find a contract.

Certainly, no one should panic (or gloat) over a loft in that last category (52% of the data set since March 1), while that set of 16 that went to contract within two weeks and that set of 33 that sold over ask (there’s going to be some overlap there; check the Master List for specifics) are fertile grounds for panic. Just playing with numbers here … ‘only’ 27% found contracts within 30 days, which sounds as though the other 109 loft buyers would have had times for things that The Higgins Tips suggest avoiding (like waiting for open houses, negotiating over contingencies, using a ‘normal’ down payment, among them).

And in the 71% of these deals that closed below the last ask, buyers might still have gotten “a deal”. (To be fair, Higgins does say in her tip “forget about getting a deal”, that “[t]hat won’t fly for attractive listings that are particularly scarce, especially if they are priced fairly”; some of that 71% were not “attractive”, “scarce”, or “priced fairly”. )

Take 2 aspirin and call me in the morning. You’ll feel better if you do.


© Sandy Mattingly 2013


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Apr. 25, 2013 - 4 colors of downtown Manhattan loft momentum, again

 

same colors, same story (buyer beware)

Not a lot of analysis, or even fresh insight here … just counting. I just updated the Master List of Manhattan Lofts Sold Since November 2008 (Note to Self … get back to doing this weekly, please) with deeds filed through this past weekend for downtown Manhattan lofts that sold between $500,000 and $5,000,000. There were 20 public resales since my last update, which was captured in my April 4, downtown Manhattan loft market momentum in 4 colors. Then, there were 14 lofts in the new set, of which 1 sold above ask, 5 sold at ask, 8 sold without a drop in price, and 5 went to contract in 30 days or less.

 

My closing comment then (“[n]o relief is in sight for buyers”) is no less apt this time, as of the 20 public loft resales in the new set, 5 sold above ask, 3 sold at ask, 14 sold without a drop in price, and 7 went to contract in 30 days or less. There is, of course, a different color to indicate sales in each of these categories on the Master List, though it will be impossible for you to reconstruct which lofts are the news ones to the list.

 

If this seems useful to do from time to time (comment, please!) or if I find it interesting, I may continue this sort of no-insight counting. No promises, though I can see some potentially interesting year-over-year monthly or quarterly posts. (Shudder!, another Note to Self ….)

 

© Sandy Mattingly 2013

 

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Jan. 4, 2013 - in which Manhattan Loft Guy bravely calls BS on the Market Trend Meme Of The Day


fools rush in ...
Refill your coffee cup if you intend to get beyond the first few paragraphs here. My executive summary is that the much-repeated meme accounting for the huge sales volume at the end of 2012 is probably BS and certainly can’t be proven by any of the numbers I have seen publicly reported. Number-driven skeptic that I am, I don’t think there were many sellers with a big enough gain to trigger much anxiety over being taxed at the fearsome top marginal rate in 2013 rather than the capital gains rate in 2012, as the candidate pool for such skittish sellers is ones likely have had to have owned for ten years or more, and be within the top 30% of sales prices, and have sold a coop rather than a condo. As you will see, the search for the ‘extra’ sellers in the last quarter who (per The Meme) hurried sales to avoid 2013 is difficult, labyrinthine in a (sadly) typical Manhattan Loft Guy way, and unrequited; they may exist in some numbers, but they can’t be found in macro data.

You’ve been warned …. Anyone who has any interest in the state of the overall Manhattan residential real estate market has already seen one or another of the articles from the Manhattan Media Division of the Real Estate Industrial Complex about the state of The Market at the end of the year and/or seen one or another of the 2012 Fourth Quarter sales reports from the from the Manhattan Brokerage Division of the REIC. So you know that this lede from the New York Times yesterday (Manhattan’s Housing Market Ends 2012 With a Sales Rush) is typical:

The Manhattan real estate market went out with a bang in 2012, with the number of sales rising by as much as 40 percent in the last three months of the year — mainly because sellers were in a hurry to close deals before new tax laws kicked in with the new year.


You can find other versions of “mainly because sellers were in a hurry to close deals before new tax laws kicked in” elsewhere (including the BHS guy quoted in The Old Grey Lady, and this little datum: the “number of sales over $10 million rose 44 percent, to 23, from 16 a year ago”), but for reasons you will see below, I prefer the more restrained overview from The Miller in his 4Q Report for the firm formerly known as PruDE:

There were a record 2,598 sale in the fourth quarter as looming changes to federal tax laws and general economic improvement elevated activity in an already improving housing market.


That “mainly because …” is my target. Although (because?) it is simple, it is (probably) BS. Sadly, we may never know (in the sense of “see from data”) whether the late 2012 sales results were “mainly because” of the tax issues, and if we can know (etc) it won’t be until another quarter or two of data arrive.

I will explain why I am a Tax Uncertainty Skeptic, and then what future data may tell us.

show me the numbers
I tend to be skeptical about any Mass Herd Theory that asserts that a few thousand Manhattan buyers and a few thousand Manhattan sellers made the decisions about their money and their properties that they did. But that does not mean that I don’t like (appreciate) trends, just that we too often reason backwards from results to “reasons”. (And there is never a shortage of people willing to give reasons, no matter how little fact-based their personal reasons may be.) In the world according to Manhattan Loft Guy, you would see more commentary on facts (“in 4Q12 many more sellers sold [and buyers bought] than in any prior 4Q”, with analysis of which market segments accounted for the surge) and less on supposition (“out of fear that taxes would rise in 2013”). But we do not live in a Manhattan Loft Guy world, alas.

My skepticism extends to much larger, more transparent, more efficient markets, like the stock market. I will grant you that a financial reporter can survey traders who work with huge institutional investors who can actually move the Dow Jones average on a day, and get some sort of consensus that these huge stockholders became sellers in response to, for example, a new economic report. But even then there are still individual portfolio-balancing and other motivations for individual huge stockholders, and every trade has, of course, two sides. For every huge seller who didn’t like whatever news is the consensus market-driver-of-the-day there is a huge buyer who saw an opportunity to buy. (I don’t want to take this stock market analogy too far, as I will quickly get over my head and there are certainly tax motivated stock transactions at year-end.)

I wonder about who the Tax Uncertainty Sellers might be who could be so numerous as to move the 4Q Manhattan residential real estate market. I have no doubt that some of those ‘extra’ $10mm sellers might have been motivated to avoid 2013 income and capital gains rates, but look again at how many (rather, how few) there are in that rarified atmosphere:

The number of sales over $10 million rose 44 percent, to 23, from 16 a year ago.


Frankly, I think the REIC Media license of anyone who calls a difference of 23 sales compared to 16 sales “44%” in a tiny niche of more than 2,500 data points is guilty of a numeracy infraction, even though the computation is correct, because we are only talking about 7 extra sellers. If I were writing about a market move, I’d try to resist the temptation to generalize from the decisions made by 7 extra sellers, even if the BHS guy knows each of them personally.

Of course, the Times reporter is using those 7 as examples, but I doubt the efficacy of those hyper-rich sellers as a proxy for the real group that comprises The Newsworthy Group: (using the BHS / Halstead numbers in the Times) the 40% extra deals in 4Q12 over 4Q11 number 656. (Using The Miller’s numbers, the relevant population is 587 extra sellers, compared to the prior year quarter.) Let’s talk round numbers about those 600 or so folks who, if the Market Meme Of The Day is correct, ‘hurried’ to sell at the end of 2012 instead of waiting more patiently to sell in 2013.

That is what we are talking about, right? That a significant enough number of sellers to move The Market sold more quickly because of Tax Uncertainty than they would have without that Tax Uncertainty. That is, in fact, exactly what the BHS guy said, without defining what he means by “a lot”:

“Without the tax law changes, a lot of that would have gone on into January or February.”


how much money are we talking about?
If we start with the largest market segment in The Miller’s report we can get some concrete numbers to work with. Per The Miller, the coop market was larger than the condo market in the last quarter (1,558 coop sales, 1,040 condo sales) and the largest coop segment was 1-bedrooms at 41.2% of the 1,558 sales; if we throw in the coop studio segment at 16.7%, they comprise 57.9% of the coop market. The median price for that 1-bedroom segment was only $560,000, which hardly seems worthwhile to talk about as Tax-Uncertainty-motivated transactions. Here’s why:

The first $250,000 of gain for any individual tax-filing owner who sold at $560,000 is not recognized at all. So before you get into any Tax Uncertainty, we are talking about a hypothetical 4Q12 seller who sold at, say, the $560,000 median for 1-bedroom coops, after having bought at significantly less than $310,000. That’s probably a 2012 seller who was a buyer from 2002-04. How many folks in Manhattan stay in studios or 1-bedrooms for 8 to 10 years? Not very many. But they would need a buy-in starting point even than $310,000 to have any taxable gain, so the potential for Tax-Uncertainty-motivated transactions at this level will be limited to people who held much longer even than 10 years.

Try a population with higher values: using The Miller’s quintiles, 60% of the condo sales in 4Q12 were at a median of $1,287,500 or lower, with the fourth quintile with a median of $2.09mm. Let’s focus on that fourth quintile as a numbers playground for potential Tax-Uncertainty-motivated transactions.

Assume most of those 208 condo sellers file joint tax returns, where the non-recognition limit is $500,000 in gain. Assume they are worried about being in the group whose marginal federal tax rate would go all the way up to 39.6%, with any recognized gain from the condo sale being taxed at that marginal rate instead of at the 2012 capital gains rate of 15%.

The median seller in this quintile sold for $2.09mm; had they bought at $1.6mm or higher, that median seller in the ⅘ quintile would have no taxable gain at all. But if you assume a $1mm gain, based on an original purchase of $1.09mm (let’s not get into how their adjusted tax basis would likely be higher), their taxable gain would be $500,000. Real money, right?

Looking only at federal taxes (simplicity is a virtue) that $500,000 gain would be taxed in 2012 at 15% ($75,000) or (the supposed fear was) in 2013 at 39.6% ($198,000). Now we are talking about motivating money! But remember that the premise at this point is a $1mm gain; how many of the ⅘ quintile sellers held long enough (10 years??) to get a $1mm gain?

Cut the hypothetical gain to $750,000, and we are still talking about a long holding period for that $2.09mm seller, and these numbers: at prevailing 2012 capital gains rates the recognized portion of gain ($250,000) would be taxed $37,500; the feared 2013 marginal rate would bite at $99,000, still a possibly motivating difference.

Yet remember, we are trying to account for ‘extra’ sellers. In The Miller’s 4Q11 report, the ⅘ condo quintile had almost exactly the same number of sellers as the 4Q12 ⅘ quintile: 202 v. 208. In other words, at the condo quintile in which the Tax Motivated sellers might begin to reside (assuming long holding periods, etc) there are no extra sellers whose motivation we need to explain. (Unless the BHS guy knows those 6 extra sellers, also.)

On the larger, coop, segment of the market (those 1,558 sales) you know how to do the playground math. The ⅘ quintile for coop sales had a median sales price of only $980,000, so fully 70% of coop sales in the quarter (1,091 out of 1,558) were sold below $980,000.

The top coop quintile is where the action is, if there is any action at all. Because, as you see from The Miller’s condo numbers being essentially equal 4Q12 to 4Q11, all of the ‘extra’ sellers were coop owners. That top 30% is 467 coop sellers, roughly equal to the entire population of extra sellers we are putting under the microscope, though the top 30% in 4Q11 were 299. One-third of that 2012 group sold above the coop top quintile median of $2.2mm. As above, couples with a gain of $750,000 from their original purchase might worry about possibly paying an extra $61,500 in taxes. There are 268 ‘extra’ sellers in this Top 30%,but not many of them would have held long enough to have that level of gain to worry about.

the numbers don’t show any ‘hurried’ deals
The proposition to be tested is that of the BHS guy in blue, above: that “a lot” of 4Q12 activity was hurried into 2012 instead of selling (more naturally, without hurry, one assumes) in January or February 2013.

You'd’ think then, that there would be fewer days on the market for these extra 587 sellers (otherwise, there is no ‘hurry’). The data are not precise enough to show days on market by the quintiles that might show Tax Uncertainty motivation, but the overall Miller numbers show much longer time to contract for 4Q12 sales compared to 4Q11: 177 days in the last quarter, 130 in the prior year quarter. No evidence of ‘hurry’ there.

(By the way, here is what The Miller suggested about the increase in coop sales in the last quarter over the prior year quarter: that 4Q11 coop sales total was “seen as an anomaly”.)

You’d think, then, that a seller who wanted to rush to contract and close in 2012 would have taken a deeper discount to asking price. Again, the data are not precise enough to discounts for the quintiles that might show Tax Uncertainty motivation, but the overall Miller numbers show that 4Q12 sellers were slightly less inclined to negotiate than 4Q11 sellers: the ask-to-contract discount was 3.7% in 4Q12, 4.9% in 4Q11. No evidence of ‘hurry’ there.

Finally (!), if there were a significant number of 2012 sellers with Tax Uncertainty motivation, you’d think there would have been … you know … more 2012 sellers. There were, in fact, an unusually small number of 2012 sellers, if by “sellers” we include both people who signed contracts and people who offered their apartments for sale. The big story of the 4Q12 reports, in my mind, at least, is the continuing low level of inventory.

At the end of 2011, in addition to the 2,011 “selling sellers” there were 7,221 “offering-to-sell sellers” (inventory). That total of 9,232 is dramatically more than the 2,598 “selling sellers” and the 4,749 “offering-to-sell sellers” (inventory) at the end of this past year (7,347). No evidence of ‘hurry’ there.

some were, but some always are
Don’t get me wrong: some of the folks who sold in the last quarter sold then because they did not want to run the risk that they would pay higher taxes if they waited into 2013. I just don’t think there were enough to move the market. And I think there are always people who do year-end deals instead of January deals for idiosyncratic financial reasons; they are just (you’ve heard me say this before) not a big enough group of similarly-minded sellers to move the market.

future data might, or it might not
I am not going to flag the reports at this point, but I assume that anyone who has gotten this far is knowledgeable enough to take as a given that there were market footprints of tax-advantaged thinking when the first-time home buyer tax credit (of 2009?) expired. In those days, the entry level sales were demonstrably weighted in the quarter in which the credit expired, and sales in that segment were demonstrably reduced in the following quarter. In other words, niche volume showed a reallocation of buyers into one quarter rather than the following one.

So one might look at overall Manhattan residential sales volume in the first quarter of this year for evidence of a reallocation of sellers into 4Q12 rather than 1Q13; in theory, if 1Q13 volume is low compared to past first quarters that would support a calendar-based shift of “should be 2013” sales back into 2012.

I will look, I promise. But the problem I anticipate is that we can already confidently predict that 1Q13 sales volume will be relatively low because we already know that inventory is remarkably low. As noted above, at year-end The Miller counts 4,749 units for sale in Manhattan; last year there were 7,221. So I don’t expect the low sales number we will be talking about in 3 months to be evidence that sellers hurried 2013 sales into 2012. Whether there are other hints in the next quarter’s report remains to be seen.

Not worth speculating about. Certainly not worth extending this post about.

© Sandy Mattingly 2013

 

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Aug. 23, 2011 - secrets of the Master List: 16 Manhattan lofts that HIT The Market


colors on the spreadsheet
One recurring topic of my frequent notes to self is to use the aggregate data about Manhattan loft transactions that I collect in the Master List of Manhattan Lofts Sold Since November 2008 (N.B., lofts downtown that close between $500,000 and $5,000,000). Here’s a nugget: of 54 downtown Manhattan loft resales in that range that closed in July and that have deeds filed so far, 8 sold above the last asking price and another 8 sold at the last asking price.

You will find the first group in green, the second in yellow. Of these 16 loft sales, only one had a price change (229 Grand St #4).  In June, of 77 downtown Manhattan loft resales in that range that have deeds filed so far, 6 sold above the last asking price and another 12 sold at the last asking price. This time, there were four price changes among the 18 (find ‘em yourself ;-).

Last time I looked at this at all systematically was on a quarterly basis in my February 19, The Miller found 9.2% of deals above ask; Manhattan Loft Guy, not so much, which found fewer such examples. Leading to the inevitable Note to self: update that quarterly counting for 2011.

© Sandy Mattingly 2011
 

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Aug. 21, 2011 - (Part 2) riffing with Toy + NY Times about higher prices "sprinkled" through Manhattan, including in the loft market

 

[having discovered that my draft post was WAY too long for this platform, the end of my Part 1 post follows, with the last paragraph repeated...]

...

With this building sales history as context, the exemplar July 2011 sale at the City Spire at $1,366/ft is at least 10% (and up to 53%) lower than sales of comparable units from 2007-08. One more time: How does the City Spire story fit into V-Toy’s narrative that some ‘types’ of apartments sell at a premium to pre-recession prices?

nice try
As I said further up, I am very interested in exceptional (apparently above-market) sales transactions. But I think my caution in noting them, but not drawing a grand theory about them, is prudent. And (to repeat) I find V-Toy’s effort to be brave but flawed.

If I have not already worn you out, you can find my notes about some of these Bright Shiny Objects in these posts (suffice it to say that I see no grand unifying theory to explain [predict!] 2011 sales above Peak pricing):

July 5, man bites dog! 49 East 21 Street loft sells 3.6% above Peak

With most exceptional occurrences, the fact that they are exceptional means that they are difficult to explain. In the context of a Manhattan loft world in which many lofts with paired sales around The Peak and recently show a 15% decline since The Peak (and other such lofts showed greater declines), going from $1.795mm to $1.85mm stands out.


Can we generalize?
July 30, why did 263 Ninth Avenue loft resale kick some serious butt?

I have commented before that bright shiny objects (statistical outliers) tend to catch attention at Manhattan Loft Guy. Today’s bright shiny object is a resale at the 2005* condominium conversion of a former printing building, The Heywood, the “2,124 sq ft” Manhattan loft #6C at 263 Ninth Avenue, which sold with a storage room on July 18 for $2.81mm. It sparkles because it was purchased on January 10, 2006 for $2,036,500 (the storage room cost $22,800), for a gain of three quarters of a million bucks, or 36%. That is a lot of sparkle, sparkle that looks even better on reflection.

 But this one sale is just one data point. (D’oh!) Trend seekers will have to contend with the fact that the other two Heywood resales in 2011 did not sparkle. At all.


We cannot easily we generalize.
July 7, why did Chelsea Mercantile loft sell within 3% of The Peak?

The #15-I valuation compares very favorably to the last three other large high-floor (non-penthouse) sales in The Merc:

    • #14D May 24 “2,065 sq ft” $1,598/ft
    • #16H April 28 “1,631 sq ft” $1,379/ft
    • #16M Aug 31, 2010 “2,236 sq ft” $1,565/ft

What accounts for the success of #15-I? It looks like a successfully stubborn seller: it came to market on November 16 at $3.95mm, a manifestly aggressive price (a 5% premium to The Peak sale of #15-I and a 6.6% premium to the then-recent sale of #16M, on a price-per-foot basis). But there was no deal for 5 months (until April 21, per our data-base), and no price drop. Seller aimed quite high, and got high.


June 11, 21 Astor Place loft sells up 21% in 2 years

Let’s just say that the price is a little difficult to rationalize within other building sales.


May 23,  111 Fourth Avenue lofted loft gains 12% since 2007 sale

Net-net, in comparison to its neighbors and to the froth of 4Q07, #6B is an impressive sale at $750,000.

April 7, 224 West 18 Street loft sells quickly, above 2007

Has the market on the north side of the Campiello Collection improved by 10% in a year? In broad terms, I doubt it, but you could use these “A” sales to make a case.

July 22, 161 Grand Street loft closes up almost 1% over 2007

(a man-takes-small-bite-out-of-dog thing)

July 13, penthouse loft at 121 West 20 Street beats Peak, but is it rational?

A rational and informed view of the market context for #5E in 2011 would have thought that it was well over-priced at $2.195mm. But macro does not explain everything, or predict specific decisions by individual buyers and sellers. This seller seems to have asked for the moon and convinced this buyer that it would take at least a small satellite to own the loft. That “$x,012500” suggests that they ended negotiations with a classic ‘let’s split the difference’, possibly from the seller having come down to $2.05mm and the buyer coming up to the last sale ($1.975mm).

May 26, resale at 15 East 26 Street is up 16% since The Peak, but there’s a catch (up since 2006 contract, not 2008 sale)

Loving the outliers, no matter how much pain they cause me: April 6, why did Carl Fischer loft re-sell at 62 Cooper Square for +21% over 2008?

For the second day in a row, I cannot account for the clearing price of this loft. At $1,587/ft, it dwarfs the 2008 sale (if 21.3% does not feel like a dwarf to you, remember that the first leg was put down at The Peak). At $1,587/ft in 2011, it beats even the $1,496/ft of #6B a year before The Peak (in March 2007), with its museum-featured, “flawless”, “perfect marriage of urban cool and industrial chic” renovation.
 

The more I know about recent Manhattan loft sales, the more questions I have. Sigh.

etc, etc, etc: March 23, eventual 92 Warren Street resale beats 2007 new development price by 5%

Fun stuff, indeed. My thanks to Vivian Toy for provoking me in this way. My apologies to you for running on (and on …) but (in explanation, not defense) that is what Manhattan Loft Guy does. On a good day, with data.

© Sandy Mattingly 2011

 

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Aug. 21, 2011 - riffing with Toy + NY Times about higher prices "sprinkled" through Manhattan, including in the loft market (Part 1)


a different approach to outliers
I daresay that the Sunday real estate section lead article in yesterday’s New York Times by Vivian Toy, In New York, a Sprinkling of Higher Prices, will get a lot of play on the inter tubes. It seems that she and I have been reading from the same page, though perhaps at a different angle. V-Toy finds “micro-markets” (implying that there is a category of strong performers), while Manhattan Loft Guy finds outliers (implying that there is ‘noise’ in any set of market data).

On the one hand, I love that she takes a data-driven approach, looking at specific sales in specific buildings (including, as we shall see, one loft building very familiar to regular readers of Manhattan Loft Guy). And I am very sympathetic to any attempts to learn by trying to draw useful conclusions from messy market data.

On the other hand, she quotes agents saying the kind of things that … well … agents do, in support of this generalization of hers:

… brokers say, the types of apartments that had been getting 2007 and 2008 prices will probably continue to do so.

Nice try, but I doubt very much that there are “types of apartments” that out-perform The Market [edit: in this way]. Nor do I think that she (or the quotable members of the local Manhattan branch of the Real Estate Industrial Complex) has identified any such “types of apartments”.

I actually agree that there has been “a sprinkling” of higher prices among filed deeds, some of which I have hit in man-bites-dog (or similar) blog posts. I even agree that “sprinkling” is a very good word for that. But I like “sprinkling” because it implies a random distribution, rather than a systematic pattern based on “type”.

V-Toy poses the issue thusly in her lede:

BEFORE the financial markets’ most recent drubbing, New York City’s real estate prices had been flat for the better part of a year. But over the spring and summer, prices in certain pockets of property sprinkled around Manhattan and Brooklyn had rebounded to or beyond pre-recession levels.
 

These micromarkets could turn up along a particular avenue or even in a specific building, and they tended to be in what brokers describe as prime locations, in neighborhoods like Greenwich Village and Chelsea in Manhattan, and Brooklyn Heights and Park Slope in Brooklyn.
 

They fell into a few general categories, namely: apartments in move-in condition; family-size apartments with three or more bedrooms; apartments with unusual features like helicopter-level views of Central Park; and almost-new condos in their first resale. Having one of these traits did not guarantee a record-setting price, but apartments achieving that milestone tended to have one or more of them.

Let me emphasize her very important qualifier, one that is both eminently fair and extremely powerful, in that it undercuts the thrust that there are such “micromarkets”:

Having one of these traits did not guarantee a record-setting price, but ...

I mean, if the “micromarkets” theory really worked, you’d be able to predict some future (strong) price activity, right?

one difference between blogging and Journalism
Readers know that I blog essentially every day about something that just happened in The (Manhattan loft) Market. I very rarely have a point other than ‘this was interesting to me because …’. And I only occasionally look back and see how the aggregation of These Interesting Things might itself be interesting (note to self: would you please do that more often?). But the day-to-day of Interesting Things goes on, and on, and …. In contrast, Real Journalists write (it seems to me) to explain something more interesting in a more general way.

Point being: V-Toy went looking for some special micro-markets and found some data that sticks out enough to (possibly) be part of a micro-market and found some agents willing to explain that these (apparent) micro-markets actually mean something, including that they exist.

another difference
With V-Toy and the New York Times having made that contribution, they move on to other Journalistic things. While we in the blogosphere get to chew on what she left behind....

Here’s what I think: we love to have explanations, but sometimes people strain to explain things that are inexplicable. And individual data points in a market are often just that: individual data points. While The Market is ‘a trend’ or an average or mean. I happen to know a little about two of the buildings that V-Toy uses to support her premise, since they are Manhattan loft buildings I have blogged about; I also happen to think that the data from these two examples do not meaningfully support her premise.

Alas, sometimes RJs are … wrong. I share V-Toy’s interest in apparent market outliers, and admire her … courage … in trying to find a unifying theory. Let’s get down to cases.

a Manhattan Loft Guy fave
I don’t know if I would have launched like this into the metaphysics of the market had V-Toy not relied on two specific Manhattan loft buildings to support her overall thesis. (Patience, Prudence: I will get to the other one in a bit.) But how could I resist when she offers this as an example of one of her (supposed) micro-markets?

[there is a] contract for a two-bedroom at the Lion’s Head Condominium, at Avenue of the Americas and 19th Street, for $2.15 million. The apartment originally sold in 2007 for $2 million.

Does that contract really evidence a micro-market that “had rebounded to or beyond pre-recession levels”? If so, it is pretty thin evidence.

StreetEasy thinks that the loft in question (obviously, this one) closed last week, with a deed pending (at the full ask, per V-Toy). Yes, it sold last at $2mm, on a contract signed at the end of 2006, but if that one sale is part of a micro-market getting “2007 or 2008 prices”, you’d think that other sales activity in the same Manhattan loft building (121 West 19 Street) would line up the same way. Otherwise, this one contract is just … errr … this one contract.

As an aside, and not to be rude, note that this loft has only one of the ‘traits’ Toy identified as ‘tending’ but not ‘guaranteeing’ a ‘record-setting’ price (“namely: apartments in move-in condition; family-size apartments with three or more bedrooms; apartments with unusual features like helicopter-level views of Central Park; and almost-new condos in their first resale”): it is in mint condition (how special is that??), but only has 2 bedrooms (convertible 3, but so are nearly all lofts around 2,000 sq ft), has no unusual features, and has had an intervening sale since the first offering.

Don’t get me wrong: if this thing in fact cleared at $2.15mm that is a very strong sale (+57% over the 2006 initial offering sale), one that might well qualify for a man-bites-dog blog post because it is also +7.5% over that intervening sale on February 13, 2007 (4 quarters before The Peak). It is just that there is no such trend at the Lion’s Head that is apparent to me.

It will take me a while to show that, so bear with me ….

As it happens, there is a Manhattan Loft Guy post for three of the four prior sales in this building in 2011, none of which found a record-setting micro-market in this 2006 new condo loft conversion in the (now hot??) blocks just off 6th Avenue in the 20s.

my apologies, but we must revisit the Lion’s Head (again)
My basic point in my July 6, Lion's Head loft sale hits the number at 26% over 2006, was that there had been perceptible gains in this building since the 2006 initial offerings, but that it appeared as though most of those gains would have been realized immediately, if only more initial buyers had flipped in 2006.

Skip the long indented excerpts from that post unless you crave the details to support what i just said:

Sometimes The Market provides data that show Manhattan loft longitudinal trends in just a few data points. Note that the only meaningful difference between the sales histories of two lofts that sold recently at the Lion’s Head, 121 West 19 Street, is in the number of owners.
 

The “1,364 sq ft” Manhattan loft #9F closed on June 9 at the ask of $1.475mm, reflecting an appreciation of 26% since it was purchased from the sponsor in the frothy days five years ago, on June 12, 2006 at $1,170,987. The seller held for 60 months to get that 26% (gross) return. I hit the last loft to sell in this condo conversion in my June 1, flipped early, Lion’s Head loft later gains only 4.8% since 2006, a story that has a similar outline but one too many owners to permit everyone to smile.
 

That was the “1,134 sq ft” loft #8D, which showed an appreciation of 30% from the original sponsor sale ($1,008,067 on May 8, 2006) to selling on May 11 at $1.31mm. The sellers of #9F 4 weeks ago and of #8D 8 weeks ago were almost exactly equally patient, holding through the Peak and nuclear winter. But the #8D seller on May 11 had only owned the loft since July 26, 2006 (58 months), and that made all the difference, as that seller realized only 4.8% because the owner from May 8 to July 26, 2006 took the rest. Go to that post for the story of that loft, but keep in mind that difference.

***

I am pretty sure I went nearly four years without hitting lofts at 121 West 19 Street, but have now hit them five times in 2011. I will try to avoid coming back until there is something different to say.

V-Toy’s example of the to-be-filed deed at $2.15mm would be a sale at $1,080/ft, but should that be something to brag about if it had not sold for (only) $2mm ($1,005/ft) in February 2007? Not based on the other 2011 sales mentioned in my July 6 post. The featured sale in that post was #9F, which closed on June 9 at the ask of $1.475mm, or $1,081/ft, and which I compared in that post to #8D, which closed on May 11 at $1.31mm, or $1,155/ft. Before you say that that sale might prove V-Toy’s recent-sprinkling-of-higher-prices-by-type thesis, note that the #8D seller in 2011 was the flip-ee in 2006 from the original 2006 buyer, and realized only a 4.8% gain from selling 3 months ago after holding for 5 years.

It is hard to argue that #2C is special (assuming it really did close recently at $1,080/ft, up 7.5% since February 2007), when #8D at $1,155/ft was up only 4.8% since May 2006.

Bottom line: I don’t see how you can use this one contract at the Lion’s Head to support V-Toy’s version of Sprinkling, once you put that contract in the context of the building’s sales history.

is this loft building (72 Mercer Street) evidence of a trend?
The other loft building V-Toy hit (remember: 2 of her specific examples are loft buildings!!) is less of a Manhattan Loft Guy fave, but I have hit this relatively small new building twice in the last two years. Here is how V-Toy used the 2008 new development 72 Mercer Street:

What defines a building or an apartment as special can vary by neighborhood. In SoHo, where smaller buildings predominate, it could be a doorman or outdoor space. In Greenwich Village, where prewar buildings are common, it could be a signature building of midcentury design.
 

Two months ago Richard Orenstein, an executive vice president of Halstead, sold a two-bedroom loft at 72 Mercer Street in SoHo a week after listing it. The full-floor apartment had sold for $3 million in early 2008, and it resold at the full asking price of $3.995 million.
 

“Things in general take longer to sell now, but special apartments sell for special prices,” Mr. Orenstein said. The SoHo condo stood out because it had a large terrace and also was in a doorman building.

I hit the very sale V-Toy featured in a blog post 3 weeks ago, August 2, velocity in the Manhattan loft market / 72 Mercer Street sale was not the fastest. where my point was more about recent velocity than the scale of appreciation since that initial offering. That the featured loft (#2W) sold on June 30, 2011 at $3.995mm and on January 3, 2008 at (only) $3mm is certainly noteworthy, but I am not at all sure that it constitutes support for a sprinkling theory based on type. (V-Toy suggests that this 33% gain from The Peak was due to #2W being a special type, a Soho doorman condo with a large terrace.)

Building history lends a little support to the main V-Toy thesis (if not by type), as another Soho doorman condo loft with a large terrace sale (#4E) that I hit in my February 6, 2010, new development 72 Mercer holds its own from peak, re-sold in January 2010 essentially flat with its original new offering price in April 2008 -- with #2W two months ago a full 25% above #4E 18 months ago.

So perhaps the strong sale of #2W compared to itself in 2008 and to #4E in January 2010 (partially) supports (some of) the V-Toy thesis that some prices are up since The Peak. But I fear that the claimed ‘type’ (Soho doorman condo with a large terrace) is too small a data set to permit a proper test of the hypothesis. The implication is that Tribeca lofts with doorman and outdoor space are not the right ‘type’ to compare to 72 Mercer, or that Soho lofts with doorman but without outdoor space (or vice versa in Soho) are also not the right ‘type’ to compare to 72 Mercer.

paging Bill James
Maybe yes, maybe no. It sounds to me like correlation instead of causation. Sort of like those idiot baseball stats you sometimes see in a game broadcast, such as a pitcher being 3-0 with a low ERA and favorable strikeout-to-walk ratio in Sunday afternoon starts, compared to being 6-8 with a higher ERA and worse K/BB ratio on other days. The data set is just too small to conclude that the Sunday afternoon correlation ‘showing’ Sunday afternoon ‘success’ has something to do with it being Sunday, instead of showing that performance in any three wins by a 9-8 pitcher is going to have a lower ERA and associated pretty numbers than the rest of the guy’s resume.

Point being: you show me an exceptional result, and I can conjure something about the sale that is ‘different’, but that difference may or may not be related to why the sale price was exceptional. (Most pitchers are not that Sabbath directed.)

I don’t know enough about the other “apartment” buildings that V-Toy used in support of her thesis to comment much (you’re welcome! but I won’t stop), but it should be clear that I think she is straining to label a trend that is hard to describe, if it exists at all. I can also cherry pick some relevant data (which may lack context, unfairly to V-Toy, but I tried to be fair). As you can guess, I am not persuaded.

miscellaneous data points can do that to you
Maybe V-Toy should not have taken some of her agent quotes at face value.

That estate sale at Butterfield House (where the “price works out to about $1,200 per square foot, which [the agent] described as exceeding the $1,100 per square foot that was the norm in 2007 and 2008”), for example. Neither our data-base nor StreetEasy quotes a size for that unit (#10F), but the floor plan and room dimensions for #10F match very very closely with those of #3F, which is said to be “1,400 sq ft” (floor plans here and here). If #10F is also “1,400 sq ft”, that estate sale was really at $1,019/ft.

StreetEasy shows only two public sales in the building in all of 2007 and 2008, so it is hard to say what the ‘norm’ was in those years. One was #2J at $2.6mm, which we have at “2,200 sq ft”, or $1,181 sq ft; the other was #2K at $1,123/ft. Both public sales in 2007-08, in other words, were on much lower floors than the exemplar estate sale in 2011, and were $162/ft (16%) and $104/ft (10%) higher.

Non-public sales at The Butterfield in 2007-08 for which I have size data are #5G at $1.877mm for “1,700 sq ft” ($1,110/ft), #7D at $2.2mm for “1,250 sq ft” ($1,760/ft), and #7B at $1.8mm for “1,550 sq ft” ($1,161/ft). Again, all lower floors than #10F, with a very broad range from 9% to 73% higher. Not the sort of contextual data I would build a case for #10F as a revelatory sale around.

How does the City Spire story fit into V-Toy’s narrative? She said a seller “listed her two-bedroom apartment at the City Spire, a 72-story tower built on West 56th Street in the 1980s, at the beginning of the year. There was little activity at first, but she sold the place earlier this month to Italian investors for $1.625 million. She bought it for $1.48 million in 2007 and had the kitchen renovated.” The unit is #5806, and it sold at $1,366/ft with a new kitchen after selling (to the listing agent!!) for $1,246/ft in December 2007.

Other 2-bedroom 2-bath activity on high floors at the City Spire in 2007-08 suggest that the #5806 2007-buyer-turned-2011-seller may have gotten a deal in 2007, not that she sold last month (at $1,366/ft) at a huge premium to 2007-08 building trend values. #5802 sold at $1,504/ft two months before the #5806 sale. #6102 sold at $1,608/ft in September 2007. The smaller #6005 closed at $1,582/ft in March 2008. Both the larger #6304 (cleared at $2,085/ft) and the larger #5101 (cleared at $2,006/ft in July 2008) are … unhelpful.

With this building sales history as context, the exemplar July 2011 sale at the City Spire at $1,366/ft is at least 10% (and up to 53%) lower than sales of comparable units from 2007-08. One more time: how does the City Spire story fit into V-Toy’s narrative that some ‘types’ of apartments sell at a premium to pre-recession prices?

I just discovered (a) that there is a limit to how long a post can be, and (b) that this one exceeds it; CONTINUED here

© Sandy Ma

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Aug. 2, 2011 - velocity in the Manhattan loft market / 72 Mercer Street sale was not the fastest


not to mention, huge gain over January 2008 sponsor sale
I tend to collect a bunch of interesting recent sales each week for future posts, writing a headline and capturing the link; often I don’t get to all in that collection because … well … so many lofts in Manhattan, so little time. And sometimes by the time I get to that loft, the initial draft headline does not fit. Which is a roundabout way of introducing the June 30 sale of the “2,142 sq ft” Manhattan loft #2W at 72 Mercer Street, a 2006 reimagining of a Soho loft building, with different facades on the 7-story Mercer wing and the 6-story Broadway wing and a private courtyard in between. My first cut at a headline referred to loft #2W sale as occurring in world record time.

So it seemed on first blush, but I did not have to check much history in the Master List of Manhattan Lofts Sold Since November 2008, as faster deals cropped up almost immediately. Not that there was anything lethargic about the #2W marketing campaign. The loft came to market on May 6 at $3.995mm, took all of 32 days to secure a full-price contract by June 7, and closed (as noted) on June 30. It is not so much the 32 days to contract as it is the 55 days from start to finish that originally earned my attention. That, and the gain over the new development sale in 2008.

The sponsor sold #2W to the recent seller for $3mm on January 3, 2008 (at The Peak of the overall Manhattan residential real estate market) at a non-trivial discount from the ask of $3.45mm. In fairness, this sale is not really an at-Peak sale, as the contract was signed in May 2007. But it is quite close to Peak. That is a very impressive premium of one-third, whether you count the base as Peak or merely near-Peak.

That huge resale premium for loft #2W is radically different from the result of the only other resale to date in this 8-unit building. Loft #4E on the Broadway side (also “2,142 sq ft”) was sold by the sponsor on April 1, 2008 (contract date of November 1, 2007) for $3,222,761 (a full-ask deal, plus the transfer taxes) and resold by that buyer on January 29, 2010 at $3.2mm. That is a less than 1% loss, but a loss nonetheless.

If you are thinking that The Market might prefer the Mercer side to the lofts on the Broadway side, remember that the sponsor thought so to some extent (the original #2W ask was $3.45mm, original #4E ask was $3.165mm), but The Market at the initial offering did not price them that way. (For better parallels, The [new development] Market valued #3E at $3,054,750 and #3W at $3,156,575, and #4E at that $3,222,761 and #4W at $3,210,542; hard to say there was a market preference for Mercer over Broadway.)

I would say that #2W just sold under market conditions that were more favorable for sellers than those prevailing when #4E sold 18 months ago, but #4E was also a very successful marketing campaign: to market December 4 at $3.3mm, in contract January 3 at $3.2mm. So I am left scratching my head over the different resale performance of these two lofts. And in need of getting back to my original point.

speed merchants abound
I have already ruined the suspense by noting that the June 30 #2W resale was not a world record. Without even having to do dig very far back here are other Manhattan lofts that were on and off the market in the same or fewer days (note to self: do a post about this phenomenon?):

  closed on days to contract
77 Bleecker St #509 July 20 31
303 Mercer St #A209 July 11 19
65 West 13 St #8D July 6 13
14 East 4 St #821 July 5 15
249 Church St #4 June 30 32
136 West 17 St #3A June 29 22
90 Prince St #5A June 29 31
67 East 11 St #325 June 29 31
18 Mercer St #5 June 28 16
889 Broadway #3A June 28 19
324 West 18 St #3C June 21 20
77 Bleecker St #523 June 21 28
115 Fourth Av #3G June 17 27
125 East 12 St #1H June 16 24
15 Broad St #2806 June 16 17
395 Broadway #10C June 14 26
48 Bond St #4B June 10 15
44 West 22 St #3 June 10 13
140 Fifth Av #6B June 8 22
245 Seventh Av #3C June 8 24

Unless you got bored and stopped counting, that is 21 lofts on my Master List of Manhattan Lofts Sold Since November 2008 that found contracts within 32 days of coming to market going back to June 1, out of 103 Manhattan loft resale transactions on my spreadsheet in those 7 weeks. Obviously, that strikes me as a big number (and as a high percentage of the total). What does it mean?

At a minimum, it means that more sellers are pricing where buyers want to be, and getting deals done quickly.

down memory lane
Absolutely, one of the things that I do not do but should, is to go back to the historical record available on my Master List. (Yet another note to self .)

Here are the numbers of loft transactions on my spreadsheet over the same period (June 1 through July 20) in past years (and there are likely to be more lofts that sold this past July 20 or before that have not yet been recorded), with the total transaction resale volume and the number of sales with contracts within 32 days of coming to market:

2010 95 17
2009 47 1

I am a little surprised that 2010 had so many quickies; not at all surprised about 2009. Data are data. Enjoy!

oy
I also found in a pile of draft posts a OYAToMLG subtitled “high velocity Manhattan loft sales edition”. It would have been nice if I had posted this three weeks ago when it was timely, but here is a One Year Ago Today on Manhattan Loft Guy post that should have gone up on July 7, about an even dozen Manhattan loft sales that found contracts within 5 weeks, suggesting a changing market: 12 examples of the (rapid) velocity of the Manhattan loft market. Of course, the implication is that this was a change in the market.

© Sandy Mattingly 2011

 

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Feb. 19, 2011 - The Miller found 9.2% of deals above ask; Manhattan Loft Guy, not so much


playing with numbers (he wins)
This week my favorite numbers geek for the Manhattan residential real estate coop and condo market weighed in with his (semi) regular Curbed feature, Three Cents Worth, with A Look at Overpaying in Manhattan on February 15. The text contains The Miller’s analysis of sales above the last asking price since July 2008, but the monthly numbers and trends are easier to see in The Big Chart .

This category of the market became a conversation piece for him recently (“It's come up as a topic in a number of conversations I've had with real estate agents recently so I thought I'd look further into it”), as it has for me. Maybe it is simply that above-ask sales are bright shiny objects that naturally draw attention; maybe they really are rare things that have meaning.

I have noted a few above-ask Manhattan loft deals in recent blog posts (e.g., February 15, 18 Leonard Street penthouse (not really a) loft fits a bidding war into 3 weeks, January 26, gut job loft at 395 Broadway provokes war, gets $1,000/ft, January 11, 53 N. Moore Street loft flies (yes) off the shelf, above ask) and have been tempted to look at my loft data more systematically. The Miller’s inspiration (and base line), plus the weekend, give me all the prompting I need.

The Miller’s key take-away:

While the market share for sales above list price has been rising since mid 2009, the premium being paid above list has generally fallen over the past 2 years until recently


His January 2011 data shows the highest ‘market share’ for ask+ deals in about the last 30 months:

- 9.2% of Manhattan apartment sales exceeded the list price at time of sale in January 2011.

- Of those 9.2%, the purchase price was 5.3% higher than list price at the time of sale


the guy is a tease
Sometimes I wish I had more excuses for stuff in (or not in) Manhattan Loft Guy posts that did not directly implicate … me. For example, The Miller is comfortable blaming “the insanely overbearing Curbed staff” for only taking the data back to July 2008; I generally have only myself to blame if I cut off a blog post with a Note To Self for further review. (As I did yesterday with the pregnant mention that there were 13 other 2010 sales that could test an apparent trend: recent Grand Madison sale shows 225 Fifth Avenue lofts still treading water.) Note To Self: start blaming the Curbed staff.

After blaming the Curbed Folk, The Miller drops this confident-but-not-yet-proven nugget, with his bolding:

I plan to build more historical data and I am fairly certain the market share for sales above list price was at least a third of all sales, probably more, during the housing/credit boom

Manhattan loft data is different (weaker)
Obviously, breaking up sales data into small pieces is awkward, as there is a lot of noise is small numbers. If that is a problem for month-by-month segments of the overall Manhattan market problem, it is significantly exacerbated for a niche like loft sales. But in the spirit of having fun with numbers, let’s see what the quarterly loft data looks like, taken from my Master List of Manhattan Lofts Sold Since November 2008 (raw number of loft closings above ask, then as a percentage of loft sales):

1Q09 0 0%
2Q 0 0%
3Q 2 1.5%
4Q 2 1.5%
1Q10 7 5%
2Q 11 6.6%
3Q 11 8.1%
4Q 9 6.8%

If there is any validity to these small numbers at all, the take-away is that there were very. very, very few above-ask loft sales in Manhattan in 2009: only 4 all year. Each quarter of 2010 had more than all of 2009, representing from 5% to 8.1% of the total loft sales by quarter.

Hardly surprising data. And very weak at these levels, but kinda fun, no? Sorta??

Even The Miller’s data is subject to … errr … unnatural volatility (did I just make up a concept in Statistics?). His February 2009 spike shows the perils of slicing and dicing finely: in retrospect, that was a clearly out-of-trend month.

more fun?
Because this was so much fun, even with small numbers, I also counted Manhattan loft sales AT the asking price. (Again, first the raw number of loft closings at ask, then as a percentage of loft sales): 

1Q09 4 0.67%
2Q 2 0.25%
3Q 9 6.67%
4Q 5 3.8%
1Q10 10 8.5%
2Q 10 6%
3Q 12 8.8%
4Q 7 5.3%


Again, not surprising data, but still weak. Counting At-Ask loft sales shows a change after the first half of 2009, and a (very rough) stability after that.

I went back and edited Master List of Manhattan Lofts Sold Since November 2008 to show Above Ask deals in green in the closed column and At Ask deals in yellow in the ask column. Perhaps this will prove useful (or, at least interesting) going forward.

Stay warm, and hold onto your hats today!

© Sandy Mattingly 2011
 

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Jan. 14, 2011 - rich sales data / 7 lofts with at least 4 sales


spate of lofts that recently sold for 4th time
When I hit the recent sale of #5F at 345 West 13 Street in my January 6, 345 West 13 Street loft is candidate for sale of the year, but the year was 2009, I made much of the fact that it had just sold for the third time since 2005, and that these three sales were at very interesting prices. I did not mention that this loft has a four-sale history, going back to 1999. It is actually one of 7 lofts in my Master List of Manhattan Lofts Sold Since November 2008 that sold in the Fourth Quarter of 2010 and for which I have at least four recorded sales prices.

I will leave for another day any attempts to generalize broadly from these 4-or-5--time sellers, but here they are:

345 West 13 St #5F

  • 12/1/2010    $4,400,000
  • 6/30/2009    $3,000,000
  • 12/15/2005    $3,875,000
  • 5/28/1999    $1,146,000

8 Greene St #4

  • 11/15/2010    $1,490,000
  • 4/27/2006    $1,550,000    
  • 7/21/2000    $775,000    
  • 2/22/1999    $525,000    
  • 8/19/1998    $289,000

114 Mercer St #2

  • 11/15/2010    $1,950,000
  • 8/21/2006    $1,625,000    
  • 3/4/2004    $1,200,000    
  • 4/19/2002    $1,125,000

129 West 20 St #4B [Chelsea Quarter]

  • 11/12/2010    $2,300,000
  • 1/8/2007    $2,300,000    
  • 12/4/2003    $1,285,000    
  • 10/12/2000    $1,325,000   
  •  6/22/2000    $1,094,000

12 West 18 St #4W

  • 10/29/2010    $1,415,000
  • 7/12/2006    $1,835,000    
  • 1/6/2001    $965,000    
  • 10/1/1991    $345,000

99 Reade St #5F [Reade Court]

  • 10/14/2010    $1,170,000
  • 4/3/2006    $1,130,000    
  • 5/17/2002    $690,000    
  • 9/11/1996    $340,000

15 Mercer St #4A

  • 10/6/2010    $3,700,000
  • 6/13/2003    $2,225,000    
  • 5/9/2001    $2,282,000    
  • 8/22/2000    $1,544,750

That is a variety of experiences, from 2 lofts essentially quadrupling in value from 1998-99 to 2010 (345 West 13 St #5F and 8 Greene St #4), to 3 lofts not quite doubling in value from 2002-03 to 2010 (114 Mercer St #2, 129 West 20 St #4B, 99 Reade St #5F), to 3 lofts being essentially flat since 2006-7 (8 Greene St #4, 129 West 20 St #4B, 99 Reade St #5F) while one other slumped badly (12 West 18 St #4W) and one gained since then (114 Mercer St #2).

Small data points, so there is limited utility, but still … some concentrated data.

© Sandy Mattingly 2011

 

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Dec. 14, 2010 - Wall Street Journal oversells a Manhattan 4 bedroom "boom"

 

[UPDATE: note the way The Journal acknowledged the error and then edited to make the article even less coherent: December 19, Manhattan Loft Guy, 1 - Wall Street Journal, 0, as WSJ posts 4 bedroom correction]


(mis) adventures in arithmetic
When I saw the Wall Street Journal-sourced Curbed item about a ‘trend’ of large Manhattan families snubbing the suburbs to remain in Manhattan I had three immediate thoughts: 

  1. I’ve read this Manhattan residential real estate story before;  
  2. “nearly doubl[ing]” the number of 4-bedroom sales in Manhattan from 136 in 2005 to 270 in 2009 is true, but a tiny enough percentage of overall Manhattan sales to (yet) be a reliable trend; and
  3. there’s got to be something very wrong with the Census data purporting to show that the market share of 4-bedroom New York City apartments went from 1% in 2005 to 12% in 2008.

Having now looked at the U.S. Census Bureau’s New York City Housing and Vacancy Surveys for 2008 and 2005, I can report that the Wall Street Journal article is very very wrong about the data there.

a thought experiment
Before we go on, now would be a good time to re-read the article by Melanie Lefkowitz, More at Home in 4 Bedrooms, but when you do, skip over this troublesome paragraph:

According to the U.S. Census's New York City Housing and Vacancy Survey, apartments with four or more bedrooms represented more than 12% of owner-occupied units in New York City in 2008, up from 1% in 2005.

What you are left with is a trend report based on one consumer (who happens to be a real estate agent), two developers, and The Miller. That would be three sources of anecdotes and one source of data, with that single data point about the market share of 4-bedroom sales. Much as I love The Miller, that is a pretty thin article -- if you read it without that Census data -- and one that you have read before.

Here is the nugget relying on The Miller:

The number of four-bedroom apartments sold in Manhattan has nearly doubled over the past five years, to 270 in 2009 from 136 in 2005, according to the appraisal firm Miller Samuel Inc. Sales of large apartments began rising in the 1990s, only to decline sharply after the economic crash of 2001. But in the past five years they have resumed their upward trend, with sales of apartments with four or more bedrooms rising by 29% in the third quarter from the second quarter.

I think that this is over-reliance on a single year’s sales to anchor a trend, and I suspect the explanation for the spike may be that these few very large condo developments are selling out in 2009 and 2010. If a large portion of the large apartments were offered for sale in 2009 and 2010 as new developments, it is likely that the market share of large apartments will regress to a mean next year when these new developments are absorbed.

While there is a story there (one that the New York Times reported not too long ago, in fact), it is properly focused on developer reaction to the willingness of very wealthy large families to buy or combine apartments into 4 or more bedrooms. How familiar does this the money quote from the June 25 New York Times Large Apartments Are the Rage in New York City by Vivian Toy, sound?

Large family apartments have always been a small segment of the housing market, but the number has grown as developers have started to build more of them. Within the last year, developers of several new projects have responded to the demand by combining units to produce as many as seven bedrooms, seven and a half bathrooms and close to 6,000 square feet.

(Forgive me, but I can’t help but notice how many of the same people are quoted in the Toy article in June and the Lefkowitz article today, including that same consumer/real estate agent [with still more pictures of her combined apartment!]; but I digress....)

Let me pin down some Miller numbers before moving on to the really bizarre error in the Wall Street Journal article. The full year-by-year market share report by apartment size is in the Miller Samuel 10 Year Manhattan report, 2000 - 2009 (page 5, which is 6 of 61), but here are a few selected years, with my calculated percentages:

  4+ BR sales Total sales % of total
2009 270 7,430 3.63%
2008 193 10,299 1.87%
       
2005 136 7,780 1.75%
       
2000 181 9,184 1.97%

Yes, “a lot” more 4+ bedroom apartments sold in 2009 than in any previous year, and The Miller’s chart in the WSJ article says that trend continued in 2010. But if we are talking about this because 150 extra families bought super-large apartments two years in a row, that’s not terribly interesting.

how did they do this??
It would be interesting if there were a complementary highly credible source for very large numbers regarding Manhattan (and city-wide) residential real estate patterns, such as (say) the United States Census Bureau. If there is a Journal editor who insisted that Lefkowitz use some US Census numbers if available, it appears that the editor did not ask her to re-check her arithmetic. Once again, here is the WSJ money quote about the Census data:

According to the U.S. Census's New York City Housing and Vacancy Survey, apartments with four or more bedrooms represented more than 12% of owner-occupied units in New York City in 2008, up from 1% in 2005.

Uhhh … no.

The percentage of 4+ bedroom owner-occupied housing units in New York City (not to be confused with NYC “apartments”, or especially with “Manhattan apartments”) was 12.67% in the 2008 survey (129,120 out of 1,019,345), but it was 12.28% in the 2005 survey (124,090 out of 1,010,370). You don’t have to trust Manhattan Loft Guy on this; here are the reconstructed tables (the original source links to the full tables are in each “Table 29”):

2008 NEW YORK CITY HOUSING AND VACANCY SURVEY
ALL OCCUPIED HOUSING UNITS BY TENURE     
SERIES IB - TABLE 29

  ALL OCCUPIED UNITS ALL OWNER OCCUPIED OWNER - CONDOMINIUM OWNER - COOP PRIVATE
TOTAL 3,101,298 1,019,345 89,622 270,262
NO BEDROOM 200,664 25,624 4,131 18,948
1 BEDROOM 1,049,849 191,628 32,710 114,021
2 BEDROOMS 1,035,590 292,077 32,478 98,970
3 BEDROOMS 647,624 385,927 16,295 32,200
4 BEDROOMS OR MORE 167,571 129,120 4,008 6,122

2005 NEW YORK CITY HOUSING AND VACANCY SURVEY
ALL OCCUPIED HOUSING UNITS BY TENURE
SERIES IB - TABLE 29


ALL OCCUPIED UNITS ALL OWNER OCCUPIED OWNER - CONDOMINIUM OWNER - COOP PRIVATE
TOTAL 3,037,996 1,010,370 73,275 255,698
         
4 BEDROOMS OR MORE 166,776 124,090 3,879 6,923

is it newsworthy that the real trend involves outer boroughs?
My strong guess is that the large number of “owner occupied” 4+ bedroom units are outside Manhattan, in the thousands upon thousands of single-family and multi-family houses that are (especially) in Queens and Brooklyn. If you agree that using the data for coops and condos is a fair proxy for “apartments”, note the tiny percentages that result for 4+ bedroom units on a city-wide basis:

  all owner occupied condo coop % condo + coop
2008 1,019,345 4,008 6,122 0.99%
2005 1,010,370 3,879 6,923 1.07%

If there is a trend in these Census numbers, it is backwards: the percentage of 4+ bedroom coops and condos in the overall housing stock of the city declined (slightly) from 2005 to 2008. Not exactly consistent with the thrust of the Lefkowitz article. (Note: I am not saying this is meaningful; I am just playing with the same data the WSJ used.)

fun fact: true trend (to me)
By the way, I happen to believe that the trend is true: more families that formerly would have moved to the ‘burbs as any kids reached school age are staying in Manhattan (especially, families with multiple children). I think this has been going on at least since our kids were school age, which would be the late 1980s. (This one of my all-time favorite Manhattan Loft Guy posts has a bunch of links to Tribeca population trends, and the influx of “three-foot people”: my March 12, Quote For The Day, 2000 edition.)

I just think that it is hard to prove this trend. I especially think that the use of Census data in today’s Wall Street Journal article is a very bad way to prove this trend.

© Sandy Mattingly 2010

 

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Nov. 24, 2010 - another Miller nugget on Manhattan real estate absorption: trend is stronger than national


stop him before he puns again
The Miller’s latest data nugget about the absorption rate of Manhattan residential real estate listings compared to the national trends is on Curbed, in the Three Cents Worth series: Manhattan Absorbs The Turkey and (though it took a while) is up on his blog also.

defining a Most Valuable Stat
With Manhattan Loft Guy congratulations to Joey Votto and Josh Hamilton, let’s look at how The Miller defines and explains “absorption”:

I took a look at absorption—the number of months to sell out available inventory (excluding shadow inventory) at the current pace of sales. I like tracking absorption because it shows inventory and sales in their proper context – the health of the market at the present moment. If you simply publish the number of sales or the amount of active inventory, you get half the story. For example you might see inventory (supply) rising rapidly but if sales (demand) were rising rapidly too, the absorption rate might remain flat.


Sometimes half the story is interesting (tracking inventory or sales alone), but the combination is most interesting.

Here, The Miller looks at quarterly Manhattan data compared to national data going back 10 years, with five quarters of New York City aggregate data as a bonus track. His main take-away is in his bold:

Manhattan is absorbing units more readily than the U.S. housing market.


are single markets likely to be more volatile than the US?
The Manhattan absorption rate is obviously much more volatile than the national rate over this ten-year period, and I wonder to what extent that would be true of all individual local markets, as averages will flatten out peaks and valleys. (I bet a similar chart for Miami, or Phoenix, or Las Vegas would look even more bumpy.)

Regardless, the change in rate, national vs. Manhattan, is remarkable. Back In The Day (through 2006), Manhattan was consistently absorbing coop and condo listings more slowly than the nation overall absorbed houses for sale. As The Miller put it:

In the first half of the decade, the Manhattan absorption rate (9 months) was double the U.S. absorption rate (4.5).

By then, the national market had hit The Peak (looks like 1Q06, on this measure) while the Manhattan market was still frothy for another six to eight quarters.

Credit standards for mortgage underwriting had started to tighten by early 2008, as I recall. By then, the national housing market had been in the dumps for a good 18 months or more, but Manhattan did not really feel it until that Fall. Of course, the Lehman bankruptcy filing on September 15, 208 was a big deal nationally, but the local impact was dramatic (that part of the graph will poke your eye out, if you get too close): there were concerns about the viability of other Wall Street firms at the time, there was the prospect of thousands of Manhattan jobs to be lost in the financial sector, and mortgage lending standards were getting even more stringent in late; your proverbial Perfect Storm of (relatively) new factors with greater-than-national impact for Manhattan and the metropolitan region.

Those were the days! brrrrrr.....

the future is dim
(I don’t mean that the future will be bleak, but that I can’t see it very well.)

The last four quarters of Manhattan absorption suggest that the Manhattan market is back within the ten-year average range. If that proves to be true going forward, one can expect a relatively stable market, with a rough balance of buyers and inventory.

The US numbers look very different. There have now been 16 quarters in a row of slower-than-average absorption (compared to the previous 20 quarters), matching or (in the last quarter as a single data point) exceeding the Manhattan average. That says less about the Manhattan market than it does about the overall US housing market.

THX for the chart, JM, and please pass the stuffing (and gravy).

© Sandy Mattingly 2010

 

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Jul. 7, 2010 - 12 examples of the (rapid) velocity of the Manhattan loft market


velocity, observed, in the rear-view mirror
I chewed on the loft-specific data in the major firms' Second Quarter Manhattan real estate market reports in yesterday's post, how did lofts do last quarter compared to overall Manhattan real estate market?. (Woo-hoo to self: that post generated a link from The Real Deal!) My major take-away was that transaction volume and Days on Market showed a much more vigorous loft market, even than the overall market. "In other words, [even more-so than the overall Manhattan market] the loft market was essentially asleep a year ago and now has awakened."

There's no highly probative data for this, but the general assumption among agents was that the paucity of sales a year ago (the nuclear winter I keep referring to) was more a function of buyers staying home than sellers mis-pricing lofts. Now, with the loft market awake, there's probably still no good way to prove whether the buyers have moved more than the sellers, or vice versa. After all, an actual sale proves only that the buyer and the seller met at a mutually agreeable price, not who traveled further to get there. (A long story for another day, perhaps: I don't think that listing discount is as good an indicator of this dynamic than Days on Market.)

from trees, to forest
Which leads me to the list below of some of the Manhattan lofts that sold in June, all 12 of which found contracts within five weeks of coming to market. When I was updating the Master List of Lofts Sold Since November 2008 over the weekend (before I had delved into the quarterly market reports) I noticed a string of lofts that had sold quickly ... what struck me as an unusual number (or an unusual concentration) of lofts that sold quickly.

I have hit some of these lofts in individual posts when they closed (June 21, another quick sale, as 1 Hudson Street closes up 10% AND down 10%, June 16, 129 Lafayette sells but NOT because of the designer (contra The Observer), June 15, 808 Broadway seller bites painful bullet, closes off 15% since 2006, June 14, 20 Desbrosses Street loft sells above ask, quickly, with pellet-blasted brick and more (dramatic photos!)), but they have power as a spare list.
 

  "sq ft" deed cleared at on market asked contract
105 Wooster St #5B 1,253 6/29/2010 $1,605,000 3/16/2010 $1,695,000 4/12/2010
39 Vestry St #2A 2,500 6/18/2010 $2,871,287 3/6/2010 $2,999,000 4/13/2010
130 West 19 St #8D [Chelsea House] 1,338 6/18/2010 $1,510,000 4/6/2010 $1,575,000 5/1/2010
7 East 20 St #6R 1,777 6/16/2010 $2,600,000 3/15/2010 $2,695,000 4/15/2010
252 Seventh Av #10J [Chelsea Mercantile] 1,344 6/15/2010 $1,495,000 3/25/2010 $1,495,000 4/27/2010
224 West 18 St #1C 1,994 6/14/2010 $2,575,000 2/10/2010 $2,695,000 3/6/2010
1 Hudson St #4 2,000 6/11/2010 $2,200,000 2/27/2010 $2,000,000 3/12/2010
20 Desbrosses St #2 2,224 6/9/2010 $2,911,000 3/12/2010 $2,800,000 4/5/2010
101 Warren St #2460 2,180 6/9/2010 $3,625,000 2/23/2010 $3,425,000 3/24/2010
808 Broadway #2M 950 6/7/2010 $720,000 2/19/2010 $749,000 3/17/2010
140 West 23 St #2A 625 6/3/2010 $580,000 3/7/2010 $595,000 4/6/2010
129 Lafayette St #4A 2,363 6/3/2010 $2,800,000 3/10/2010 $2,895,000 4/14/2010

 

  • that is 12 quick sales out of the 50 June loft closings on the Master List (others were "quick", but not quite this quick)
  • the largest listing discount was 5.3% (105 Wooster St #5B)
  • one sold at the asking price
  • three sold above the asking price

Note that I am not interested (for this post) in the price levels, only in the velocity. (In fact, 2 lofts on the list last sold since 2005 above the recent closing price, while 3 lofts on the list sold since 2005 below the recent sale; the others had no resales since 2005.)

 

current trend, or past trend?

 

The really interesting question is whether or not the pace of the market will continue (because there is continued strong buyer interest matching sellers really interested in selling) or whether this trend will peter out (either because of a summer slow-down, or because the second quarter sales sated the pent-up demand from the nuclear winter, or because ...).

 

As you see from the four posts I did last month on four of these sales, I tend to notice things like "quick contracts", and often comment about individual sales.  But I am often tree-level, rather than forest-level, on a daily, on-going basis. I will try to pay enough attention to offer informed commentary, going forward, and point out (apparent) trends when I see them. This one looks real.

 

© Sandy Mattingly 2010

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Mar. 18, 2010 - with 225 Fifth Avenue, now 20 pairs of 2007 sales + recent resales

 

quick points
I noticed today that the Manhattan loft #10A at 225 Fifth Avenue had a deed filed yesterday (some details to follow) and in the course of looking at past history here (The Grand Madison) I discovered that I had overlooked three other sales here over a three week period spanning New Year's. Those three (formerly) overlooked sales have now been added to the Master List of Manhattan loft closings and ... because each of the three was first sold in 2007, to my collection of lofts that have sold recently and in 2007.

That collection of paired resales of Manhattan lofts is now 20, and that March 5 data dump (data dump: 20 Manhattan lofts sold in 2007 + recently) has been updated (again), for all you who seem to have bookmarked that post.

one 2006 pair
#10A at 225 Fifth Avenue closed on March 8 (deed filed yesterday) at $1.65mm after a pretty efficient marketing campaign: one price, three months to contract, only a 3% discount from the asking price. No surprise that this "1,613 sq ft" loft is in essentially the identical condition as when it sold in the original offering of The Grand Madison (although there is listing babble about custom closets), as that sponsor sale was only in 2006. (This loft was one of the very first to close in this condo loft conversion, but is ineligible for that reason for the paired loft resales collection I posted on March 5; link is above).

The floor plan for #10A exemplifies why it can be difficult to make medium-size lofts out of buildings with large footprints: too many units are too far away from the edges of the building. Although #10A is not Long-and-Narrow it is  a rectangle, with the only four windows on one side, leaving a 16 ft wide living room with 2 windows, a 13 ft wide bedroom with 2 windows, and a 'home office' (no windows) that many people will use as a sleeping area. With "1,613 sq ft", this loft will have to compete against real 2-bedroom Manhattan lofts.

I will create a set of paired resales from 2006 similar to the 2007 list, and this loft will be on it. When it sold in the first offering, it cleared at $1.78mm, so the recent sale represents a decline of 7.8% since November 2006. This sale at $1.65mm is essentially flat to the December 29 sale of the identical unit upstairs, as #11A traded at $1.667mm.

After yesterday's convoluted journey through un-neighborly comps down the street (March 17, 170 Fifth Avenue loft sales are confusing), it is nice to see two neighbors who comp out exactly where you would want them to ... if you expect to see rationality in the Manhattan real estate world. #10A at $1.65mm on March 8 lines up very well with #11A at $1.667mm on December 29. There's a charm in that.

stalking the sellers
It appears that the sellers of #10A at 225 Fifth Avenue (a) love the micro-neighborhood, (b) needed more space, (c) are very confident about their financial situation, and (d) don't mind paying transfer taxes. While I can't be certain, the deed address for their sale of #10A is #14F at 15 East 26 Street (15 Madison Square North), which is immediately around the corner. #14F sold to a LLC on February 5 at $4.73mm (see what I mean about their confidence about finances?), with "2,380 sq ft" of 2 real (windowed) bedrooms and another home office. So these folks moved around the corner to get 767 more feet, a park view, an additional bedroom, and were willing to pay nearly three times the price of their 225 Fifth Avenue sale. That's confidence!

Whether the #14A buyers got a deal or not, they paid much less than the developer originally wanted: this loft came to market in April 2008 at $6.125mm.

At the risk of getting even further afield, the #14A buyers did not get as good a 'deal' as their new neighbors downstairs, as the sponsor sold #13A on December 4 (same footprint, same condition, same views) for $4.275mm. They will have a lot to talk about when these neighbors meet!

 

© Sandy Mattingly 2010

 

 

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Mar. 12, 2010 - now 17 pairs of 2007 Manhattan loft sales + recent resales


quick note
I just edited the March 5 post (now titled) data dump: 17 Manhattan lofts sold in 2007 + recently, to add 3 Manhattan loft resales with recent deeds filed that were last sold in 2007. It is an interesting data set, and is unique among Manhattan Loft Guy posts in that a huge number of people seem to have bookmarked it (i.e., many, many visitors but not so many unique visitors).

paging Sally Field
That tells me that you like the post, and that I should not screw around with your bookmarking. Hence the edits, rather than an updated post. And now anyone who was not already aware of it has been given another chance to find it.

 

© Sandy Mattingly 2010

 

 

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Mar. 5, 2010 - data dump: 27 Manhattan lofts sold in 2007 + recently

 

[UPDATE 4.12.10: added 7 more! so I also added 2 paragraphs near the end]

[UPDATE 3.18.10: added 3 more, all from The Grand Madison, all showing mild declines from the prior sale in 2007]

[UPDATE 3.12: I have added 3 lofts to the table that have recently had deeds filed (55 East 11 St, 111 Barrow, 40 Mercer), and played with the text as a result. Edits are indicated by strikeouts or [ ]. Sorry if this is cumbersome to read, but it is obvious that A LOT of readers have bookmarked this, so I don't want to ruin that by updating in a new post. Chances are that I will update this yet again when more recent deeds are filed. ]

not much editorializing, for now
I promised when I finally caught up on my Master List of Manhattan loft closings that I would do some interesting things with that data (February 16, master list of Manhattan loft closings is up to date!), and this will be the first day that I have kept that promise.

There are 14 17 20 27 lofts on my Master List of Manhattan loft closings that sold in 2007 and also have recently been re-sold, i.e., for which we have Sale and Resale data. I am not going to say much about them now, just dump them out there, but let me explain what I did. I went back only to November 1 to find paired resales, to try to keep it "recent" sales but also to get enough sales for this to be interesting.

The data should be self-explanatory, except that -- particularly as I was intrigued by some of the apparent price appreciation -- I checked the former listing description against the recent description for evidence that the loft had been renovated in the interim. (In a data set with hundreds of points this might not matter, but with only 14 17 20 27 ....) Two Four gains are driven in part, at least, by improvement ore or renovation; in one [other] case, the phrase "fully restored" is ambiguous in comparison to the former listing description, but the prices strongly suggest that the condition was improved between the two sales. In two three cases with market value increases [and in one four six cases with a decline], the lofts were sold as new developments in 2007, so may reflect contracts signed much earlier [where I could find reliable contract dates I have added that info].

I hope it is obvious that this is inexact 'science'.

I am surprised that only 3 of 14 4 of 17 20 27 demonstrate a market change (for each very specific loft) of a decline of 10% or more, regardless of whether you can 'alibi' some of the gainers.

[here's an (exciting) new pair of paragraphs!]

This latest batch of 7 paired sales (added on April 12) provides a good deal more depth than I had before (nearly twice the number of pairs that I started with). Some additional observations are in order: (1)  five of the 11 'losers' come from a single 2007 new development; (2) the new mix of Gains-Flat-Declines is 14-2-11; (3) there are still only four declines greater than 10%, but those four are now out of a much larger sample (still a small sample, but much larger than I started with).

Thus, it seems to me fair to conclude (provisionally, always subject to more data) that the trend for Manhattan loft resales from 2007 is more likely to be positive price changes than negative, even allowing for the number of lofts that were improved from 2007 to the current resale. Buyers in 2007 at 225 Fifth Avenue have (so far) shown mild declines but the five resales there overweight the experience in that one building in this paired resale analysis. Of the four Big Losers, one was a 2007 conversion, one a 2005 conversion, and two were in buildings converted to residential living many years ago. ENJOY!

Is this interesting enough to do again, with 2006, or in a few more months?? [

Although none of you has commented, the fact that there are so many people clicking on this post repeatedly tells me the answer is YES, but ...  please ... feel ... free ... to ... comment. PLEASE.]
 

  "sq ft" deed cleared at prior sale prior price % change notes
55 East 11 Street #3 2,325 3/1/2010 $2,800,000 1/31/2007 $1,950,000 43.59% major reno
111 Barrow St #8D 1,200 2/23/2010 $1,395,000 9/14/2007 $1,020,000 36.76% reno
92 Chambers St #2 1,370 11/18/2009 $1,300,000 9/20/2007 $975,000 33.33%  
161 Grand St #2A 1,832 3/11/2010 $2,250,000 2/14/2007 $1,870,000 20.32%  
53 Murray St #6 [Mansions on Murray] 1,719 1/5/2010 $2,720,000 8/24/2007 $2,300,000 18.26%  
55 N. Moore St #4R 2,100 11/16/2009 $2,465,000 4/12/2007 $2,135,000 15.46% now 'renovated to perfection'
112 West 18 Street #3A [Brooks van Horne] 1,745 12/10/2009 $1,400,000 3/20/2007 $1,225,000 14.29%  
53 N. Moore St #6B 1,895 3/29/2010 $2,150,000 5/29/2007 $1,950,000 10.26%  
67 East 11 Street #514   12/23/2009 $530,000 4/9/2007 $489,000 8.38% needed TLC
92 Greene Street #6A [Mercer Greene] 2,264 12/11/2009 $4,600,000 7/5/2007 $4,300,000 6.98%  
22 Mercer St #2D 2,392 3/4/2010 $3,050,000 1/9/2007 $2,950,000 3.39%
252 Seventh Avenue #10Z [Chelsea Mercantile] 858 2/11/2010 $970,000 3/13/2007 $950,000 2.10%  
15 West 20 St #8B [Altair 20] 2,322 3/22/2010 $2,800,000 6/25/2007 $2,750,000 1.82% sold as new devt w 2007 contract
32 West 18 St #7B [Altair 18] 3,200 1/19/2010 $4,000,000 8/23/2007 $3,975,000 0.06% sold as new in 2007 w June 2006 contract
               
92 Warren St #5E
2,845 2/2/2010 $3,400,000 3/13/2007 $3,400,000 0.00%  
11 West 20 St #8 2,205 2/11/2010 $2,150,000 2/6/2007 $2,150,000 0.00%  
               
               
225 Fifth Av #4S [Grand Madison] 1,348 3/10/2010 $1,480,000 4/25/2007 $1,496,827 -1.12% new in 2007 w June 2005 contract
225 Fifth Av #2R [Grand Madison] 1,049 1/15/2010 $1,210,000 8/27/2007 $1,250,000 -3.20% new in 2007
225 Fifth Av #10S [Grand Madison] 1,348 1/18/2010 $1,550,000 5/30/2007 $1,620,000 -4.30% new in 2007
225 Fifth Av #3E [Grand Madison] 1,819 3/24/2010 $2,160,000 4/27/2007 $2,262,511 -4.53% new in 2007 w March 2007 contract
655 Sixth Avenue #4F [O'Neill Bldg] 1,231 12/21/2009 $1,270,000 7/17/2007 $1,340,000 -5.22%  
225 Fifth Av #11A [Grand Madison] 1,613 12/29/2009 $1,667,000 8/20/2007 $1,790,000 -6.87% new in 2007
148 West 23 St #7E [Chelsea Mews] 780 1/13/2010 $637,000 12/20/2007 $695,000 -8.34%  
303 Mercer St #A306 775 1/11/2010 $650,000 5/7/2007 $745,000 -12.75%  
161 Duane St #4A [Mohawk Atelier] 2,100 11/4/2009 $2,400,000 5/4/2007 $2,800,000 -14.29%  
40 Mercer St #9 1,222 3/3/2010 $1,750,000 3/16/2007 $2,350,000 -25.53% new in 2007
176 Broadway #12C 1,600 1/13/2010 $975,000 8/24/2007 $1,375,000 -29.10%  

 

© Sandy Mattingly 2010

 

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Aug. 28, 2009 - one less funny person at The Porter House


... unless the buyer is a clown?
I checked in at 66 Ninth Avenue (The Porter House) on August 16 (Porter House loft may be "beyond the beyond" but sells off a million, up 40% or down 25%) to tell a tale of  Manhattan loft sellers who recently closed 40% above their November 2003 purchase, but down 25% from where the upstairs neighbors sold while they were on the market at the wrong price. Yesterday's The Real Deal updates that building's news to note that a "comedy actress" well-known to many and liked by some just sold a high floor loft there for $2.61mm.

That not-so-funny-anymore loft was evidently #9E, in the brand new four steel-and-glass upper floors that cantilever out over the original furniture warehouse lower six floors. Let's look at what the comedian did with #9E.

from 2003 to 2009, up 69%
TRD's Adam Pincus reports that the sponsor sold the "1,836 sq ft" #9E in November 2003 for $1.6mm ($871/ft) -- not much of a premium over Old Loft #3W, which the developer valued at $1,522,284, or $784/ft for "1,942 sq ft", given the "120 sq ft" terrace and the height (and light) advantages of the new 9th floor. That puts the #9E seller up seven figures in six years, or nearly 70%, before considering round trip expenses. Happy math, that!

Of course, as even sellers with no sense of humor are wont to do, the comedian wanted happier math, having started to market in March at $3.25mm (we'll come back to that number, so make note). Proving to be a serious seller, they dropped the price a healthy 8% within four weeks ($2.995mm) and again by 5% six weeks later ($2.85mm). They were in contract from there within another 6 weeks, so were on the market just over 4 months before contract. That contract negotiation was, of course, serious, and chopped another 8% off the last asking price, or a total of 18% off the original March asking price to close at $2.61mm.

the neighbors did better last year (of course)
As with the Porter House sale I hit on August 16, this sale has a lovely comp with which to asses the change in The Market pre- and post-Lehman. In that case it was #4W selling on July 3, 2008 at $2,787,500, compared to #3W selling on June 23, 2009 at $2.15mm. In this case, the very recent #9E sale at $2.61mm compares with the July 1, 2008 of #8E for $3.1mm (raise your hand if you remember the original asking price for #9E). Pretty strong evidence that the value of #9E declined by about 16% in a year.

Those downstairs neighbors had an interesting listing history, as well (is there such a thing as Listing History Porn??). They over-shot the market (an endemic situation), but recovered to generate a bidding war. Check this out:
 

October 11, 2007

$3.5mm
November 16, 2007 $3.3mm
February 1, 2008 $3.15mm
February 27, 2007 $3mm
April 29, 2008  contract $3.1mm
July 1, 2008  closing


This history is interesting because they were on the market at The Top, without getting their price (or any price) for five months, and then they got someone to pay $100k over a two-month-old asking price. Also interesting that they did not generate a contract at the April 2008 contract price of $3.1mm when they were asking (only) $3.3mm from November to January. If that eventual buyer was looking in November, you'd think that buyer would have bid to a $3.1mm contract then. Perhaps the buyer did not emerge until later; perhaps the seller was not willing to compromise (yet).

further shameless speculation
If there was a bidding war in April 2008 for #8E, as this history suggests, I wonder if the losing bidder bought something else then or ... perhaps that bidder came back to snap up #9E a year later, "saving" almost $500k.....

It is much less speculative to believe that the comedian was distracted (mistaken) by starting in March 2009 above where #8E had closed 9 months earlier, as the facts proved that no one stepped up with an acceptable offer off of $3.25mm. By April, even asking $105k less than #8E's clearing price generated an offer. Still, the comedian sold 69% above her November 2003 purchase price, so she should be smiling even if she left 16% of notional dollars on the table.
 

(h/t to Curbed for the TRD link)


© Sandy Mattingly 2009
 
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Sandy Mattingly is Manhattan Loft Guy; now with The Corcoran Group (http://corcoran.com/ ; but see the disclaimer at the bottom of the page), he can be reached most easily at Sandy@ManhattanLoftGuy.com or 917.902.2491, and followed on Twitter @ManhattnLoftGuy (note "mis-spelling"). After 7+ years, the blog has moved. Links here on RealTown will work for the foreseeable future, but new posts (and all the old content) has migrated to ManhattanLoftGuy.com.

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