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House of the Day: 38 Cambridge Place

Categories: Properties

house
No pics of this charming woodframe on the Warburg website yet, but we snapped one on the way home yesterday (realizing, in the process, that we know the tenants in the upper duplex). Anyway, this 2-family, 4-story house is old-school goodness but until we have more info on the condition of the interior, we're not quite ready to swallow the $1,685,000 price tag. At that number, it better be pristine. (As an aside, some of you might recognize the neighboring house on the right from the garden tour this Spring.) For those of you unfamiliar with the block, Cambridge is an unusually beautiful and wide block. The buyer of this house will also have the pleasure of living within throwing distance of Shahn Anderson's haunted house.
UPDATE: Corcoran's got it all hooked up. Eleven pics and we have to say that the interiors exceeded our expectations. First showing will be at the September 10 open house.
38 Cambridge Place [Corcoran] GMAP P*Shark
38 Cambridge Place [Warburg]



By Brownstoner at August 29, 2006 11:35 AM | Comments (27)

27 Comments

By Anonymous on August 29, 2006 12:21 PM

Again:
Why would you buy this?
Tenants pay 2700/month (32k/yr) to live in an identical apartment to yours.

You pay 1.7MM*.065 (110k/yr) + expenses (10-20k) - rent(32k) - some mortgage deduction.

So you get a duplex at double the cost of the upstairs one.

By Anonymous on August 29, 2006 12:50 PM

Because when the tenants move out, all they might get back is a security deposit.
But when the owner moves/sells, they get money back that they have put into the mortgage. It's an investment and an accrued value.

By Anonymous on August 29, 2006 12:54 PM

looks like a multiple listing
http://www.corcoran.com/property/listing.aspx?Region=NYC&listingid=898255

By Anonymous on August 29, 2006 1:11 PM

and as a tenant - Can't make home as your own and someone else sets the rules.
And at end of lease - maybe hunting for new place. All at the whim of the owner.

By Anonymous on August 29, 2006 1:16 PM

Still though:
When you sell, you often have an overlap of two mortgages, an empty house, transfer taxes, and the broker's 6% vig.

Unless you really think this place is going to get mongo price appreciation, I'd rather be the tenant and stick 6G in the stock market each month.

By Amy on August 29, 2006 1:33 PM

Imagine you really like where you live: you've made the apartment your own, your true home. You love your street and your neighbors, not to mention your kids’ school. Suddenly, with no warning and with no control of the situation, you're told you have 60 days to find another place and move out.

Having paid virtually the same rent for years while everything around you went up, you now find yourself priced out of your beloved neighborhood.

Happens all the time. No amount of money can make up for that kind of shake-up in your life. If someone can only afford to rent, then the debate is moot. But if they can somehow swing buying, even if what they buy wouldn’t be as nice or as big as what they could rent, they will have peace of mind and security. Doesn’t apply to this house necessarily, but the intangible benefits of owning are too often overlooked by people who see houses as mere investments.

By west on August 29, 2006 1:44 PM

Photos look nice on the Corcoran site. No floorplan or mention of how many bedrooms though. Not showing til September 10th.

By Anonymous on August 29, 2006 1:51 PM

I'll grant you that.
My point is that there is a brownstone bubble in this neighborhood -- the market is pricing the 'implied rent' on owning a home at 2-3x the market rent. That is a _monster_ difference.

We looked at a different house on the block in the spring, and couldn't understand the pricing then either.

Unless you _need_ the space right now, you are paying such an incredible premium for this space, that if you were to just rent for another year or two and save the difference, you'll have the down payment for a pretty good house.

By Shahn Andersen on August 29, 2006 2:22 PM

It is nice to have three sides exposed, particularly since most houses on this block (and most of downtown Brooklyn for that matter) have windows on the front and back only.

It seems like the price might be on the high side, but I guess it depends how you feel about frame homes from the 1890's. If I had the spare cash sitting around, I'd buy it in a second (although I would start by offering a lot less than the asking price).

By Anonymous on August 29, 2006 2:30 PM

anon 1:47--

I don't get your logic here. The two townhouses are no closer together than any other Brooklyn townhouses, and rather than have two party walls and two really close- by neighbors, you have only one.

By Meryckawick on August 29, 2006 2:46 PM

I think it's priced well. Everyone here is assuming the two duplexes are the same in quality. I'll bet the owner has a very nice duplex, which would be worth $3500 a month on the open market. If they buy the place for $1,500,000 and put 20% down, once you factor in their tax savings, they would still be doing better off than renting.

It's the lack of foresight that a lot of renters have to not realize that while the owner may be paying the equivalent of $3500 now, in five years when renters are paying $5000 for the same unit, the owner is effectively paying $2250.

By Anonymous on August 29, 2006 3:15 PM

Mery:

I assumed 100% financing and a 1.7 cost (which is what you'll pay if you buy it when you factor in closing costs). The 20% down payment is economically irrelevant, as you could just stick that in the stock/bond market and finance the rest.

The long-term argument doesn't really hold water -- you could just invest the 50-60k/yr in the stock market and use the income to pay the increased rent.

Likewise, the tax argument probably doesn't hold water: most potential buyers are already getting mauled by the AMT, as between the mortgage interest and NYS/C tax regimes, you tend to get screwed.

So if you buy this, you are basically betting on
a) monster home price appreciation without similar tax increases
b) doubling of rents without doubling of costs
c) your willingness to hold it.

Most multi-family trades at 10-12x rent roll. Even assuming 3500 for the lower duplex, that puts you at less than a buck.

Ugh.

By Anonymous on August 29, 2006 3:17 PM

ok buy this alligator , looks like you buy this today at 1.68 and tommorow (next yr) it will be worth 1.2 or less. what is the difference between this and a home i can buy in Staten Island overlooking the bay for under 875k ? ok maybe the transportation is an issue but this is just another frame house. Please tell me? i can be in a safe area and not have to worry about my kids getting caught in the middle of a drug deal. Don't get me wrong i love bklyn but at this price no way.

By lp on August 29, 2006 3:25 PM

Some of the comments above regarding not being worth it because you could rent a duplex for the cost of the mortgage or less miss the point that the buyer might be willing and able to pay the monthly mortgage and have the added satisfaction of owning the house for the long term and for the piece of mind.

I've always liked these two houses. It's a lovely block too. For the size, it seems a little high (3368 sq. ft.) but who knows. I like the small gates to the little alleys down to the back yards too.

By Anonymous on August 29, 2006 3:29 PM

I hope Brooklyn townhouse prices go up as much as the next homeowner, but I have to say so many of these prices are no longer making sense to me. People throw around huge numbers about the piles of money they are undoubtedly going to make on their real estate purchases. Yes, you pay toward your principle every month, but unless you stay for at least five years - realistically a lot longer - that amount is not very significant. Plus you have tens if not hundreds of thousands of dollars tied up in a mortgage that can't be invested elsewhere. Plus you have all kinds of expenses (seen and unforeseen) and a lot of responsibility/obligation. Again, I am a homeowner! I just get sick of the smug "renters are throwing away their money, I'm so smart because I bought." Please.

By Anonymous on August 29, 2006 4:10 PM

The only difference between renting and buying is whom you're renting the property from -- the bank, or a landlord. This also ignores the associated costs of homeownership like repairs and property taxes, which are factored into the rent you pay.

Realistically, you're not going to 'own' the property unless you stay there 30 years, and depending upon property values to continue to skyrocket is unrealistic.

300k down payment is a lot of money you're putting into a potentially depreciating asset.

By west on August 29, 2006 4:14 PM

What I get from all this discussion is that the person who ends up with the top of this duplex is going to get a great deal. Nice apartment with landlords who will be up late anyway worrying about their finances so they won't be bothered by all the pitter-patter of feet above them -- I'm a little bit more inclined to have the tenants below me if I'm going to spend this much!

By Anonymous on August 29, 2006 4:25 PM

Everyone is very negative today!

By Anonymous on August 29, 2006 4:35 PM

Ditto. Can we get back to talking about the HOTD? Brownstoner, can you switch the link to Corcoran?

By trudy lou on August 29, 2006 4:45 PM

I was in the rent don't buy camp until we found ourselves with a growing family and landlords who didn't renew two years in a row. If you want to be in a brownstone, renting puts you at the whim of the owner of the house - it's not like a big apartment building. We had to move three times in three years and each time rents were rising rapidly. When the owner sells, divorces or wants to expand, you are out. Over the long run, the investment in a home generally pays off no matter when you buy in the cycle v. renting.

By anonymous on August 29, 2006 6:01 PM

I'm a friend of these sellers, so I've seen the lower duplex, and it is quite beautiful. Parlor floor is big, open, lots of light. Downstairs - if I remember right - has 2 BR & 2 BA, plus an additional room off the master bedroom. Plus there's that sauna.

By Michael on August 29, 2006 7:06 PM

I must say, I read some of the bullish statements on this string and I wonder what year and/or multiverse I've wandered into. Take a look around: There is no one, not even the chief economist for the national real estate association, who argues that we're in anything but a bearish market.
A terrible snarling bear? Or a just one that maims a little and then waddles away?
Who knows? Though even people in the industry are talking more and more about a hard landing. (And anyone who went thru the landing of 1990 to 1995 knows that can happen). But whatever. It's just not the time to plunk down $1.6 for a wood framer in a dodgy school district in a market that's growing dodgier. I'm NOT by the way dissing Clinton Hill. I love the neighborhood. But the prices have gone whack in the last two years. As for rents, one of us expects a jump from $2700 to $5000 in five years? Cool and the gang. I'd just like a touch of what you're smoking.
Again, pretty house, and even in a down market it should fetch a nice price. But $1.6? Oy vey.

By west on August 29, 2006 7:49 PM

1.685m for a 2 bedroom apt? Ugh. I'm getting a headache.

I'm kind of intrigued by the poster yesterday who mentioned the Barron's article that we may have already seen the bottom. Here I am, sitting and waiting to buy, and perhaps the Fed is done raising interest rates and they keep falling. Then mortgage rates stay where they are for the forseeable future. Maybe this scenario is not all that far-fetched as even if listing prices have not fallen much, perhaps practically prices have already fallen by ten percent if you look at buyers accepting that much under asking, as I understand is going on. Maybe in fact this is it and while prices will not rise for a few years, perhaps they won't fall either. Just a thought.

By anonymous on August 29, 2006 8:55 PM

My earlier post at 6:01 was misleading: if memory serves, you could actually use this place as a 3 or even 4 bedroom, since there's an extra windowed side room on the parlor floor (which they use as an office), not to mention that extra room off the master BR.

I'm not going to wade into the debate about the RE market. All I know is, it's a beautiful place on a dreamy block.

By Scotto on August 29, 2006 10:28 PM

One other upside you have as an owner is you participate in the upside of the property--in a highly leveraged way that is not possible in the stock market. No one will lend you 80%, 90%, 95% to buy a bunch of stocks. Obviously if prices are going down the leverage factor makes the situation worse but if you get even like 4% appreciation per year on the underlying assets on a long term basis you can make out much better as an owner than a renter.

By Michael on August 29, 2006 11:18 PM

I think it's dangerous even in good times to treat your home as a "leveraged" instrument. It sounds good, certainly, and makes you feel like a Wall Street guy. But houses are shelter. There is, as another poster noted, a substantial price that comes with buying and selling, at least $100,000 on a million dollar property. And that doesn't include the rather substantial cost of upkeep on a handsome old house.
This is NOT an argument against owning. I've rented and owned and I'd rather own for a variety of comfort and pyschological reasons. But at least in ancient days--like the 1990s--you didn't want to end up with a $5000 a month mortgage nut in a district without strong public schools.
New York is late to the softness in the market and, if the early 1990s are any indication, it current be late to the revival. It seems genuine appreciation of these beautiful homes would be wisely accompanied by genuine caution in plunking down $1.6 million.
My two cents anyway ...

By Anonymous on August 30, 2006 4:27 PM

If you want to play housing futures, you can get 40-1 leverage on the case schiller housing index futures, and it s _MUCH_ more liquid than this

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