This is a monthly series where we explore a recent deal closed by our team. We try to take an unconventional look at the sale, and share what we learned from it. Enjoy!
A Great Test Case in 2022.
It’s unusual to have such a perfect test case to share with you. Here, we’ll look at two nearly identical properties, both two-bedroom, two-bath units that needed full renovations, both with balconies! Let’s see what happens.
The first two bedroom property with a balcony. It’s on the 10th floor of a cooperative (Unit 10C) on 84th Street, just off Central Park West. This closed in late May 2022 for $1,520,000. Here is the link.
You’ll note the side views of the park, the sunken living room, the need for a bunch of work.
The second closing was our listing. We brought 10F to market in September 2022, just over three months from the 10C closing. Again, two beds, two baths, balcony. This is nearly identical to 10C. The link is here! We closed on this sale in early February, for $1,390,000. This is- wait for it- a $130,000 difference in the sale price.
What Do You Think Accounts For the Difference?
The 8.5% discount on the property, which went into contract almost six months to the day from when 10C closed, can be attributed almost exclusively to one thing: A rise in interest rates.
So we can look at the before the mortgage rate increase, when rates were still around 3%, then fast forward to November 2022, when rates had launched into the stratosphere, holding over 6% at the time.
While rates are subsiding a little bit, it’s really interesting to note how quickly one thing can impact the value of a property.
Follow us on LinkedIn, Instagram, and TikTok to learn more about cool little anecdotes like this that demonstrate the market of the moment! -Scott & The HRT