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July 5, 2006

Ah, To Have Bought In 1996

building
For everyone who missed the chance to buy a house in Fort Greene or Clinton Hill ten years ago, Sunday's profile of Gitta Robinson and Richard Grisaru's Clinton Avenue Edwardian townhouse will be a little bittersweet. How much did the couple pay for the 4,000-square-foot house back in 1996? A whopping $270,000. Ouch! As the article describes, despite having been an SRO for years, the house had retained much of its original detail: oak paneling, claw-foot tubs, handsome fireplaces, a stained-glass skylight and a wall of casement windows topped by leaded-glass transoms stretching the width of the house. Even at what seems like a bargain-basement price today, the purchase was a stretch for the couple, both of whom are architects. Their strategy was to quickly fix up the top duplex to start generating rental income while they camped out amidst the renovation of the lower half. The process informed their outlook on architecture.

"When we work with clients on their own renovation projects, we design every square inch to perfection," Ms. Robinson said. "But I've discovered that I don't need that level of perfection in my own life. It doesn't bother me that this house shows its quirky age."

Amen, sista.
From the Beginning, It Felt Like Home [NY Times]
GMAP P*Shark




Posted by Brownstoner at 9:46 AM | Comments (54)
Categories: Properties

Comments

1996, 270k WAS a lot. I've been speculating in the Northern part (FG, CH, Bd Sty, etc.)of Brooklyn since'95

One could get the vast majority of the brownstones in these areas for an avg of 150-225K in FG & CH and as little as $95K in Bd Sty back then.

Thats why I felt these dramatic price increases are un-natural, but hey I was wrong (well, not that wrong because I bought more than a few, who woulda thunk it:)

Posted by: Anonymous at July 5, 2006 9:59 AM

i heard a story from someone who knows a former HUD broker who worked in harlem almost 10 years ago. they had trouble selling 5 story brownstones, fully rehabbed into multifamily buildings, for under $200K back then. total turnkey operations but selling them was tough.

Posted by: anon at July 5, 2006 10:44 AM

You'll always see stories like this and IMO its not worth losing any sleep over them. My Lefferts Manor house cost me a small fraction of the amount cited here in 1974, BUT the owner of the three story limestone on the park block of 13th street were I rented my first apartment paid exactly the same amount for his house in 1969. When we first lived in the Slope we met a slightly older couple who had purchased a house on the park block of Carroll Street for, coincidently, the same 5 figure amount a couple of years before our landlord. Today my house is worth, I suppose, nearly $1 mil; the 13th Street house, I guess about $1.8 mil and the Carroll Street house at least a million more. In 20 years people will be bragging that they paid "only" a couple of million in 2006.

Posted by: Bob Marvin at July 5, 2006 12:13 PM

Still wondering if a SRO I saw on Greene St. in BS is a bargain at $600K. Would want to make it into apt. but that might require a lot of reno.

Are the days of the 150-225K homes long gone or are they still available somewhere in Brooklyn?

Posted by: Anthony at July 5, 2006 12:13 PM

When my house in Crown Heights was brand spanking new in 1899, it probably went on the market for between 8 to $10,000. Check out ads in The Brooklyn Daily Eagle from the old days (available online from The Brooklyn Public Library)

Posted by: Hal at July 5, 2006 12:26 PM

Not sure where the cheapest homes in Brooklyn are these days? Maybe Bushwick or East NY?

I heard these areas may gentrify.

Posted by: Sandy at July 5, 2006 12:33 PM

Hal, using the CPI, $10,000 in 1899 was worth $187,600 in 1996. If houses were going for $250K back then, that would be a paltry 33% real return over 100 years of ownership. Hardly great returns.

Here's a link,
What Is Its Relative Value in US Dollars
http://eh.net/hmit/compare/

Posted by: ItsAWrap at July 5, 2006 12:44 PM

I agree with Bob, the best you can do is appreciate someone else's good fortune, and move on. There's always the "woulda, coulda, shoulda" in most areas of life. My parents were offered opening stock shares in a new company called International Business Machines, way back when, and they had to pass, as they couldn't afford it, even though it was a relatively small amount, even at the time. But they were a young family with two small children, and it just wasn't possible. Who knew?

I remember loving Clinton Hill back in the late 70's, early 80's when my friends were going to Pratt, and it was a very different neighborhood then. But even a bit later, in the mid 80's when we were looking to buy, it was too pricey, especially when neighboring Bed Stuy had great houses for under $100K.

It's all relative, you just have to be glad for the time you are in, and deal with it. If your over $1M house is worth $6M in ten years, people will be talking about your great deal just like we talk about the deals of the past.

Posted by: CrownHeightsProud at July 5, 2006 12:49 PM

Yeah it's all relative. I think Canarsie might be cheaper, but who wants to live out there!

Posted by: TWint at July 5, 2006 12:56 PM

One of my favorite old stories goes something like this: John Jacob Astor, lies on his deathbed, one of the wealthiest men of his time. Someone asks him if he has any regrets. He replies "I wish I had bought more property in Manhattan."

Posted by: ameraleed at July 5, 2006 12:58 PM

Buying property in Manhattan? Who can afford that? We're still trying to find the cheapest homes in Brooklyn for $150-225K these days.

Posted by: Kerry at July 5, 2006 1:16 PM

Houses don't appreciate, neighborhoods appreciate. I think the areas that most readers here can handle living in are at 9/10ths already, meaning that there are no real bargains (after property taxes and expenses) left.

So if you want to reproduce the stunning luck of the carroll gardens or FG buyer in the 70s, you better pick an in-the-dumps neighborhood.

But which? there are so many to choose from.

There lies the problem: there were so many to choose from in the 70s as well, and nobody writes about the people who bought in the dozens of areas that did not deliver the goods, people who bought then had to sell because of crumbling neighbors, rising crime, or other issues that made them just run out of money.

It is like stocks: the dow is full of winners, and if you focus on them then market investing looks like a sure-fire bet, but when they were small, each was hidden among dozens of losers that looked equally attractive.

Buying a house to expect significant appreciation above inflation rate is a gamble, and the bigger return you want the biggest risk you must take. You want no risk and miniscule return? buy on 5th avenue. You want high risk and the possibility of huge returns? buy anywhere that our favorite brokers are not already flogging housing stock in.

Posted by: Anonymous at July 5, 2006 1:21 PM

Good question. Where would you buy if you only had a minimal amount of money. I'd say Flatbush.

Posted by: BklnKetch at July 5, 2006 1:23 PM

Historically homes DO NOT always go up, no matter where you buy. Park slope averaged in 1988 around 800K for a house. In 1996 that number dropped to 500K. It took until 1999 for it to get back up to 800K. 11 years of decline. My aunt bought a house on Crown Street in the late 20s. It was a very well to do place then. Before she died in the late 70's her house was sold for about the same price she paid in the late 20's. 50 years...no return. Like the previous poster said, location is the key factor in price. It is not automatic that the price goes up

Posted by: Tom at July 5, 2006 1:34 PM

Bed Stuy/Stuy Heights.

Posted by: Anonymous at July 5, 2006 1:59 PM

To have bought in 1991...or to buy in 2010...

Posted by: Anonymous at July 5, 2006 2:02 PM

To Anonymous @ 1:59 p.m. - Bed Stuy/Stuy Heights is still expensive.

The least expensive homes will still run you $700K, that's awfully close to the prices for prime real estate in other areas like PLG, CG, FG, & CH.

We're looking for bargain areas. If you were desperate and had to buy something with a small amount of funds where would you buy?

Posted by: anon at July 5, 2006 2:09 PM

True, BS/SH is not a bargain, but it is still easily 50% of prime real estate in CG, FG, and CH (not sure about PLG).

Posted by: Anonymous at July 5, 2006 2:28 PM

Even with modest increases in real/estate values its still possible to make an above market return due to two factors:

Leverage
Increasing Rents (Or rent your not paying if owner occupied).

Before buying, model, model, model... and get comfortable with what it would take to break the model.

Posted by: Greg at July 5, 2006 2:43 PM

Queens

Posted by: Anonymous at July 5, 2006 2:44 PM

what's a model?

Posted by: anon at July 5, 2006 2:59 PM

Yeah Greg, what's a model?

Where in Queens? Sorry but I don't know of any place in Queens that has the same "zest" that Brooklyn has with it's magnificent homes, and hipness.

Posted by: Brig2 at July 5, 2006 3:02 PM

Yeah, can't think of any place in Queens that is a good investment that will take off, and be worth something one day.

Posted by: Sue at July 5, 2006 3:05 PM

Since everyone here is down on it, think I'll take Anon at 1:21's advice and buy in Queens...just remember, most of you would have run screaming if anyone suggested living in Bed Stuy a few years ago, and Barbara Corcoran would have laughed at the South Bronx.

Posted by: Anonymous at July 5, 2006 3:09 PM

"Are the days of the 150-225K homes long gone or are they still available somewhere in Brooklyn?"
far gone in Brooklyn or anywhere else in NYC or surrounding towns, cities.

Posted by: Anonymous at July 5, 2006 3:18 PM

Anon 3:09, please disregard these armchair analysts. I was anon 1:21.
Not everyone needs the "zest" & hipness of Brooklyn. We are not all hipsters. Yes some areas of Queens are lacking in the cultural enrichment that exists here in Brooklyn. But I would say that the cultural diversity of the Queens makes up for some of that. It all depends on what you are looking for. There are many great neighborhoods in Queens that don't need to "take off".

Posted by: clinton hill mere at July 5, 2006 3:18 PM

As for good investments now, the far suburbs. Lots of people moving north and creating new art districts, stores, galleries, restuarants--all the hallmarks of gentrification. Houses can still be had for as little as 850K, and the schools are great. I'm amazed by how many people I know who have stopped looking in brooklyn and are instead buying in westchester. that's were I'd invest if I had anything to invest.

Posted by: Anonymous at July 5, 2006 3:21 PM

Are you crazy - Westchester? That's terribly expensive. $850K for a house is crazy. Yeah the schools are better, but it's not exactly a place to get a reasonable house, and we're talking investment here.

Posted by: anon at July 5, 2006 3:34 PM

Forst Hills and Kew Gardens have actually increased more than many Brooklyn areas in the last few years--so don't be so snotty. For that matter, I was watching one of those real estate cable shows, and prices in Savanah have tripled in the last 3 years. Let's not think it's just Brooklyn..

Posted by: Anonymous at July 5, 2006 3:37 PM

I was up in westchester visiting recent transplants and we went to Peekskill for lunch. Great stores and coffee houses and a really cool new modern art museum. I was shocked. And houses there are nice and still actually cheap. The schools aren't good, of course, but the area is booming.

Posted by: Anonymous at July 5, 2006 3:41 PM

Sorry but $850k buys very little in Westchester these day. Plus, the taxes are sky high.

In any event, Anon is only looking to spend 150-225K so Westchester is not a serious option. With that being said, a quality apartment could still be had at this price point in various parts of Brooklyn. A brownstone or townhouse? Not.

Posted by: BrownBomber at July 5, 2006 3:48 PM

Model = Excel Spreadsheet of the Cashflows and Projected Asset Value over time.

Posted by: Greg at July 5, 2006 3:52 PM

I agree. Westchester is out of site. Remember that Peekskill is WAY up there, and it's an unreasonable commute to the city. It may be ok if you stay there and don't commute.

Savannah is okay, but remember what jobs pay down there, including Atlanta.

KG, and FH may have increased, but many of them are cheap co-ops that went from 60K to 120K over the years. They aren't as breathtaking as a brownstone.

Posted by: Lelia at July 5, 2006 4:11 PM

Forest Hills is beautiful and has never been cheap per se. There are some tudor places that are as fascinating in their own way as some of the brownstones in Brooklyn. Ever take a ride on the LIRR past that area? It looks like something out of an English country town (albeit with high rises a few blocks away and the LIRR right there). Wasn't Forest Hills a planned community in many areas? It's interesting in it's own right. But not cheap, sadly.

As for Westchester, Peekskill is lovely but too far. And you can find a really nice place in Westchester for 850, depending on where you're looking. It's just a different lifestyle - not better or worse.

Posted by: Anonymous at July 5, 2006 4:19 PM

Lelia,

Sure, plenty of "cheap co-ops" in FH and KG, but don't let that cloud your thinking. Forest Hills Gardens is not to be believed. Unhip? Absolutely!! Architecturally stunning? Absolutely!!! Value? No idea, but most places are well over the $1 million mark.

Posted by: gdf at July 5, 2006 4:20 PM

Leila, Peekskill is a 45 minute train ride to Grand Central. That's faster to midtown than most of Brooklyn. In fact, that's faster than my commute from Brooklyn! There are people in my office who commute daily from Beacon, which is a 90 minute train ride. Lots of people are happy to have a longer commute in order to have a good house in a nice place.

As for cheap houses:
http://www.oldhouses.com http://www.historicproperties.com

Posted by: Anonymous at July 5, 2006 4:24 PM

45 min train ride from Peekskill to GC.
Great if live next to Peekskill train station and work next to Grand Central.
If not, figure 1hour and a half door to door.

Posted by: Anonymous at July 5, 2006 4:33 PM

I've never been to Peekskill, but I must say that it takes me at least an hour door-to-door to midtown from Brooklyn. Another 20-30 minutes doesn't seem like a big deal for less $.

Posted by: Anonymous at July 5, 2006 4:38 PM

You people are so full of it. I actually live in Beacon, and my commute to west midtown is under 90 minutes (including time on each end). So the commute from Peekskill can't be longer than an hour and ten max, even with a 15 minute drive to the station and bad subway connections.

As for prices, we looked in northern westchester and couldn't find anything for under a million. We got a fabulous Queen Anne mansion for half of that and are loving it. And the commute is a breeze.

Posted by: Anonymous at July 5, 2006 4:46 PM

Putting the time in minutes (90) instead of hours (1 1/2) does change the fact that Beacon is NO WHERE near the city and a HUGE commute.

In less than 1 1/2 hours I can WALK from Wall Street to Carroll Gardens (and have done so in blackouts and transit strikes). It takes 15 minutes for the same distance by cab and 20/25 minutes by subway.

I work with lots of Wall Streeters and when we go out in the evening, they have a pumpkin/Cinderella time where they all whip out their Metro North, LIRR, Jersey Transit schedules and determine when they have to bolt for their train or bus or be stranded in NYC for another hour (or if it's late enough even stranded overnight).

But I can just hop on any train back to Brooklyn. And if it's past midnight I might splurge for a cab which is all of ten bucks from lower Manhattan.

Try taking a cab to Peekskill, Beacon !

Posted by: Anonymous at July 5, 2006 5:11 PM

Fastest train from Beacon to GC is 72 minutes (most are longer). So this guy claiming average 9 minutes before and after train. So he can get off a rush hour train and get thru GC to west midtown in how many minutes? And leaves his house how many minutes b4 train is scheduled to leave Beacon (park car walk thru parking lot).
Peekskill rush hour trains are about 60 minutes - so he thinks from Peekskill including 15 min to train and subway can't take more than 1hr 10min? Now that would take a DashingDan.

Posted by: Anonymous at July 5, 2006 5:14 PM

I've been in Beacon for 2 years now, commuting daily to midtown, and the commute has never been an issue. I much prefer it to the ordeal of the subway. When I lived in Brooklyn, my subway was constantly breaking down and sitting in tunnels. Metro North has never been late, the seats are comfy, and the view of the Hudson is awesome. As for making sure I catch the last train at 2:00am, that's never been a problem.

And the train to Beacon is 30 minutes longer than it is to Peekskill, so don't lump them together.

Posted by: Anonymous at July 5, 2006 5:25 PM

I left Forest Hills (just outside the Gardens) for Brooklyn. FHG is a strange place.

Posted by: Anonymous at July 5, 2006 5:28 PM

We looked in Beacon but decided it was too far. Daily commute would be a grind. We bought about 10 minutes from the Croton station. My commute is an hour and ten minutes from my house to my office downtown, which is totally dealable. I agree with 5:25 that the train ride is really pleasant compared to the subway. And Peekskill, about a 15 minute drive north, is wonderful. Prices varry a lot depending on the house, but you can probably find something small without land for the high 800's.

Posted by: Anonymous at July 5, 2006 5:48 PM

Clinton Hill is that hotness.

Posted by: aj at July 5, 2006 5:56 PM

So if you only had a little money to spend, and had to buy something, what cheap neighborhoods would you buy in Brooklyn, Queens, and Westchester?

We're talking about buying cheap and it increasing in value in 5 or 10 years.

Posted by: Dave at July 5, 2006 6:37 PM

Bay Ride is expensive!

Posted by: Julie at July 5, 2006 7:15 PM

Dave, don't bother. Wait until people start to think of homes as homes again - not real estate investments that have to increase in value in 5-10 years time. Not everyone can be a real estate genius with an ability to predict the next hot place. You won't have to buy in the next hot place then - you can buy in a nice area that you like and you will see your home appreciate at a normal rate.

Posted by: Anonymous at July 5, 2006 7:16 PM

"I invite you all to join me in Bay Ridge..."

a good suggestion for a small boost over the next 10 years.

As far down eastern parkway as you dare might be another interesting bet as the avenue is slated for capital improvement.

Coney island? I watched sydney wake up to the value of property with water views (or on the water) and I bet the same thing will happen in new york as the ugly industries blocking the views get swept away: which means the brooklyn waterfront, coney island, long island city etc..

Posted by: Anonymous at July 5, 2006 8:22 PM

For Westchester, the best bet is Peekskill. Prices have doubled in the last few years as the art scene has blossomed, but you can still get a fixer-upper for under 300K. Artists and young families keep moving up, new stores open regularly, and prices have continued to rise. There's a new luxury development along the river and another is under construction, as well as a new riverside park. There is also a big development downtown of live/work lofts and store fronts. The mayor has really embraced artists and the town is actively encouraging all things artistic. The new museum, the Performing Arts center, the "art house" movie theater, and the restaurants and galleries all draw people from all over the area. The town is also building two new schools. It has all the makings of great little city, and it is bound to keep improving.

Posted by: Anonymous at July 5, 2006 8:51 PM

With it's historic district designation still pending, I would venture to say that Crown Heights presents the best investment opportunity going forward in Brownstone Brooklyn. Relatively undervalued because of crime and demographics but that's exactly when you want to buy if you're looking for huge gains on your investment: greater the risk, greater the reward. Once the historic district is approved by LPC, gentrification will certainly begin to take root in this beautiful community. In ten years, residents will be sitting on a lot of equity.

See LPC's Crown Heights North Press Release.

http://www.nyc.gov/html/lpc/downloads/pdf/press/06_20_06.4.pdf

View the proposed Crown Heights North District Map.

http://www.nyc.gov/html/lpc/downloads/pdf/maps/ProposedCrown%20Heights.pdf


Posted by: BrownBomber at July 6, 2006 8:23 AM

as far as queens goes, jackson heights is an area to watch. prices for co ops have risen steaditly over the past few years. a studio went for $85 two years ago and would be $120 today. it is 2 express stops from manhattan, and very ethnically diverse...latino, indian, some elderly jewish, and now has a thriving gay community and many young families from manhattan and brooklyn looking for affordable housing. while it does not have the 'brownstone' appeal, it definately has its own 'art deco' appeal. buildings built in the 1920's lots of gargoiles, sunken living rooms with fire places, marble and plaster lobbies, huge cortyard enterances and backyards ( which used to house tennis courts and recreation). some of these buildings were actually part of a 'planned community'. so was forest hills gardens and parts of richmond hill. i am an 'old queens girl myself' and moved to brooklyn a few years ago. love it here but never knew queens had such rich history until i left! there is also an annual house tour in jackson heights every june and a small landmarked area.

Posted by: Anonymous at July 6, 2006 9:28 AM

I agree with BrownBomber. Crown Heights is definitely an area that will not be overlooked much longer.

Posted by: faithful at July 6, 2006 11:36 AM

Like Stuy Heights, the primo sections of Crown Heights already have their million dollar plus houses, for sale, and those that have sold for those amounts. Most of these were truly special pieces of architecture. As for the remainder of CH, I believe BrownBomber and faithful are correct: we are next.

I wish I had some investment money!!

Posted by: CrownHeightsProud at July 6, 2006 4:56 PM

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