Open House Wrap-Up

15th st, yeah. the street was a carpark and horn symphony from TLC cars now and again and the 2nd floor lost a whole room to the open-to-below part of the floorplan.
kitchen needs a big update.
despite this, a number of excited couples discussing offers.

property tax is high on 15th st & people talking offers and money seemed to forget rental income is fully taxable.

I suppose this applies to all townhouses now but you HAVE to expect more capital appreciation or live in a place for 10+ years to win over renting, but area rents have not budged up for 4 years so I'm wondering how this (further capital appreciation) can be reasonable.

Posted by: Anonymous at April 10, 2006 10:32 AM

rental income is taxable but you can claim depreciation on the portion of the property that is rented so it minimized that actual tax impact.

Posted by: Anonymous at April 10, 2006 10:44 AM

Yes, but not 100%. People always seem to just knock the entire rental income off their projected mortgage payments when buying something more expensive than they can actually afford. I don't know, if I had to rely on a rental to swing a house, I don't think I'd want it. I wouldn't want to pay all that money and wind up living in what's basically a coop unit. I guess I mean this for places that have more than a basement rental (a duplex or two apt.'s).

Posted by: Anonymous at April 10, 2006 11:02 AM

Given that area rents have been flat the past few years, that is precisely why I'd expect rents to go up before home prices do. It's when rents have shot up a lot recently that you shd worry about them diving or staying flat.

Also, not that I'm a cheerleader for 15th in particular, but I don't think it would be so simple or cheap to rent a place equivalent to the owner's duplex here. Do you have examples?

Posted by: Anonymous at April 10, 2006 11:14 AM

Also remember that if you start depreciating the rental portion, you start eating at the basis of the house -- which makes it that much easier to blow past the $500,000 capital gains exemption

Posted by: Anonymous at April 10, 2006 11:15 AM

OK, so you shouldn't buy a house with a rental because they're not going to go up in value. And also because they will go up in value (and you'll eat into your capital-gains cushion).

Huh?

Anyway, as far as the basis goes -- making so much money on your house that you actually, God forbid, have to pay taxes on some of the gains is a problem no one should be whinging about.

Posted by: Anonymous at April 10, 2006 11:25 AM

Uh, I've been for years taking major losses 'against my personal income'.
2k ain't nothing. Don't know here you're getting that figure.
This is 1st year in almost 20 where rental income will show profit.
Rental is great way to deduct much of expense of house. Has worked great for me.

Posted by: Anonymous at April 10, 2006 12:18 PM

check out comment Apr8 2:26pm On the OpenHouse Picks entry itself for lowdown on Lincoln.

Posted by: Anonymous at April 10, 2006 12:41 PM

Prices in Ditmas are much higher than three years ago. I didn't like the location of the PPS house - way too close to CIA. But the price reflects this. It would be at least $200K more if it was further in.

People who are new to shopping in the nabe always say, Oh, way to overpriced for the area. Sorry if you were expecting a better deal, but you should've made the move three years ago. Or even 5 or 7 (when you could get a house for $350K, and I'm not kidding. Ditmas has arrived since then, like it or not.

Posted by: Anonymous at April 10, 2006 1:07 PM

I don't know... Since I can garage my car (alternate side of the stree parking? What's that) and zip over to overcrowded Park Slope or anywhere else I please any time I like, or else just stay put and make use of the ever improving amenities on Cortelyou Road (been to Belle and Maxie's yet?)seems like I've got the best of both worlds. Not to mention 7 bedrooms under 1.2 million and no need for those pesky rentars since it doesn't cost $2 million and I can therefore actually afford it. Oh yeah... Did I mention schools you can actually send your kids to without wincing? As far as lots of money goes... yes, some is even in the bank, and not every cent in my home.

Posted by: Anonymous at April 10, 2006 1:40 PM

The PPS house to me was also way too close to CIA and needed too much work.
We actually really liked the house and block of the one in Midwood/Ditmas Park (I know we've discussed the actual neighborhood names on this board before - including the generic Victorian Flatbush title.) It's a lovely home and very well maintained - needing very little work, except for an updated kitchen to the existing 80's version. The dark you refer to may be your impression of the original oak woodwork throughout - to me it was a plus to have that original wood untouched!

Loved how Green this (Victorian Flatbush) area is now - and that these homes all have lawns and backyards. And the huge plus - a garage and driveway. Ready parking for me and my guests! For that amenity I'll drive to the butcher!

Posted by: Anonymous at April 10, 2006 1:44 PM

Actually, it's completely finished. Seriously, before all of this gets really out of hand... Ditmas Park/Victorian Flatbush isn't the deal it used to be, but you still get real bang for your buck here. If we had the amenities you would find in Park Slope, Brooklyn Heights, Clinton Hill, whatever, you'd be looking at much higher asking prices. And because our shopping strips are small, even as they improve, they will never be as diverse as those you find elsewhere in upscale parts of Brooklyn. All I'm saying (trying to be tongue and cheek and possibly failing) is that there is A LOT going for this neighborhood. Schools are good. We have tons of space. Garages. Back yards. Park Slope in ten to fifteen minutes (we decided on a last minute dinner at brookly fish camp on Saturday, and where there in a heartbeat - the wait for a table was another story). Those of us at the northern ends of the nabe are in walking distance of the park and Parade Grounds (useful for those of us with older kids). Brooklyn College has great amenities. I live close to one of the subway stations, and I am in Union Square in 22 minutes, door to door. If I had unlimited cash, and could afford a large, finished house in a more bustling section of Brooklyn (as well as Private schools, a private parking garage and a country house), maybe I wouldn't be living here.... But I can't. And I certainly am not going to suburbia. People who are in the market for a family home should take Victorian Flatbush very seriously. Like I said, it has a lot more to offer than restaurant choices and snappy boutiques (although we do have a few of those now, too....:)

Posted by: Anonymous at April 10, 2006 2:08 PM

I saw the house at 190 Clermont when it was listed with Aguayo in October. The house itself is very nice and the owners did a great job renovating, but there are two flaws. The rental apartment has access to the triplex (stairs blocked by a piece of furniture -- in the rental). Also, as you can see from the floorplan both baths are ensuite (one off a second living area on the second floor and the other off a child's bedroom, plus they are tiny with very shallow tubs. Clearly, I am not the only one who noticed these things because it has been on the market for almost 6 months and still no takers.

Posted by: Anonymous at April 10, 2006 2:10 PM

The Brotherhood Institute at 139 (one of three mini schools there is very popular). 217 on Newkirk is very good. All schools in District 22 have Eagle (gifted) programs, and for the real genius's out there, try CIG (Center for the Intellectually Gifted - they have there own elementary school on Avenue L, I believe). Middle School - Hudde (three gifted programs including CIG) and the magnet program and CIG program at 381 - district busses from pick up points in the neighborhood). HS - Morrow and Midwood. The Express Bus on Cortelyou Road takes kids very close to Stuyvesant. Hudde is one of largest (largest?) feeder school to Stuy in the city. Preschools of note include Popcorn (off Albemarle/Kenmare Terrace), and Midwood Montessori in South Midwood.

Posted by: Anonymous at April 10, 2006 2:34 PM

off topic on the rent vs buy equation:

someone said "can you rent that kind of duplex in park slope", my comment would be this:

if you have a 1.3m bucks sitting in the bank or if you have to take a 1.3m in mortgage, it is pretty much a wash: you're shelling out 60k after tax per year for five+ years and most of that is interest (you are dirt poor), or forgone investment income (you are cashed up) as an investment professional can probably get you 5% after tax on your 1.3m.

If you buy, you just agreed to be on the wrong side of a 10% bid/offer spread (buy and there goes 3%, come time to sell, and there goes 7%).

have you looked at the kind of rentals you can have for 5k a month? certainly as large and interesting as a townhouse duplex.

Ok - come 5 years, the owner is hoping the market has gone up with inflation + 10% more, just to cling to the tiny bit of mortgage principal (70k) he paid off with his 430k of payments, or in the case of the cashed up guy, just to get back his nest egg plus inflation). Meanwhile the renter has flexibility and cool places for all that time, and no risks.

caveats: I know this math doesn't count if you intend to stick to a place for 10 years, or have a crystal ball that says houses will continue to rise faster than inflation, or if you think having the right to repaint without calling a landlord is worth $2 on the dollar..

houses in new york sell for 60% more than their intrinsic value, no doubt about it. In park slope it is probably more like 100% more. Rents, being less easy to push into the future, are pinned to wages. They are not going to rise to close the gap.

Posted by: Anonymous at April 10, 2006 2:39 PM

anon 2:08--

I'd just like to congratulate you on being one of the few people in a Brownstoner thread willing to admit that you might actually live in a different neighborhood if you had more money. As would I and probably a lot of other people here, but honestly, the defensiveness around here sometimes--people blow up their nabes into shangri-las rather than admit that, yes, we do make tradeoffs based on what we can afford.

Posted by: Anonymous at April 10, 2006 2:40 PM

RE Ditmas Park prices: Who said houses were 350K 5 years ago? That is absurd. We bought in Lefferts Manor in 2001 for 550K, only because there was nothing in Ditmas under 650K. We saw everything on the market and the only things for 500-600 were horrible and not really in Ditmas. So, please, don't exagerate price increases so much.

And there seems to be some nice, but smaller homes, currently for sale in Ditmas for 950K to 1.2M.

Posted by: Anonymous at April 10, 2006 4:30 PM

I said 5 to 7 years ago. And yes, I know two people who bought in Victorian Flatbush for under $400K in those days. It was just before the first big jump in prices. I am not exaggerating. I am not going to give you my neighbors names either. My own house was on the market about 6 years ago for $400K and they couldn't find a buyer. I KNOW what I'm talking about. Prices sky-rocketed here very quickly. I got one of the last houses here for under $700k (just a few years after the very well known broker couldn't sell it for $400K).

Posted by: Anonymous at April 10, 2006 4:34 PM

west,

if the school are so great, why are there so many people from Ditmas and Midwood applying to schools in District 15 or trying to get into PS 321?

Just curious.

Posted by: Anonymous at April 10, 2006 5:09 PM

Are there? The only people I know with at 321 are those than kept them there after moving from Park Slope and having kids already enrolled.

In fact, I know one family that took their child out of 321 and enrolled them in the Eagle Program at 217.

With the exception of 321, which is arguably the best school in Brooklyn, there is no district 15 school which I would schlep to instead of 217 or the Brotherhood Institute.

But wait - aren't parents from ALL over Brooklyn lying and pleading to get their kids into 321? I don't think this is a phenomenon particular to any specific Brooklyn neighborhood.

What's nice about the Ditmas Park elementary schools is that more and more local parents are actually sending their children to them.... 217 is one of the most pleasantly diverse (and I do mean diverse - equal amounts of everyone) you will ever see. Plus a great physical structure and good gifted program.

Posted by: Anonymous at April 10, 2006 5:36 PM

I know the owners of the Stratford Rd house and they had 3 offers after the open house--all over the asking price. They are anticipating a bidding war.

Posted by: Anonymous at April 10, 2006 7:34 PM

I saw the 15th Steet house. Given the current PS market, is a great price for what you get, even with the 15th Street noise and nearby women's shelter a half-block away (which is noisier than we all care to admit). The house is a mismash -- doesn't quite know what it wants to be -- there are 1970s-style elements mixed with exposed brick and marble sinks. The kitchen needs to be redone. But nevertheless, there will be a bidding war because it was underpriced -- there's a fair amount of space and privacy.

Posted by: Anonymous at April 10, 2006 8:27 PM

The Stratford Road house is a deal for landmarked PPS pricewise because of several factors: it's not huge compared to other houses in the area, it's not on the most picturesque street, it has had some upkeep over the years. A house for under $1 million in PPS is unheard of these days. And, since it's landmarked, close to the park, and psychologically closer to Park Slope than houses near Glenwood, there are a lot of people eager to move there. I'm not at all surprised they had serious offers.

The house on Beverley (Mary Kay Gallager) is in contract. Technically its in Beverley Square West, but just across the street from PPS. I think it's a much nicer house in terms of design and period detail, needs some updating, but was also priced at $999. It's going to contract. Anyone see both houses?

Posted by: Anonymous at April 11, 2006 9:23 AM

ditto on the last post. I heard the beverley house had a bidding war and went for a significant premium. I expect the stratford house will as well. I don't think being near coney island avenue is a bad thing in the long run as that is where most of the foot traffic will be after all those developments get done.

Posted by: Anonymous at April 11, 2006 9:55 AM

Well, once the house is sold, it's very easy to find out what it went for almost immediately. Mary Kay Gallager is one of the only brokers who actually lists the selling prices of her listings once they've sold on her web site.

Posted by: Anonymous at April 11, 2006 11:16 AM

email from a WL broker tells me that 15th st park slope has had an accepted offer or so they say, for "below the ask" with four offers total and is now basically off the market.

very strange. Almost feels like a bait and switch as WL will then recommend inferior listings for more money.

so much for the "bidding war" theory.

Posted by: Anonymous at April 11, 2006 6:14 PM