House of the Day: Stealing Third?

Not a bad deal - for what it is...

Posted by: Anonymous at November 9, 2006 12:08 PM

steal is not the word for it...then again, maybe it is.

Posted by: Anonymous at November 9, 2006 12:11 PM

Wow, unless this place is a wreck they did steal it!

Posted by: Anonymous at November 9, 2006 12:17 PM

Sold! Can we move on or are we running out of listings/properties that would make for a rather interesting forum here? The fare here has been rather lackluster for the past couple of weeks, indicative of the number of responses to the threads spun.

Posted by: Anonymous at November 9, 2006 12:31 PM

Brown Harris is famous in the industry for leaving their listings up forever. It's a ploy to attract new buyers...

Posted by: Anonymous at November 9, 2006 12:35 PM

this is not indicative of the current market, which for townhouses is still very strong (especially in established nabes like park slope). sometimes a bit of luck and timing can fall upon a buyer when a seller is fed up and just wants to move on.

Posted by: Anonymous at November 9, 2006 12:36 PM

Anon 12:36 is a perfect example of somebody who has fell under the "Brooklyn Real Estate Spell" that Brownstoner and his breathen have encouraged.

Folks, unfortunately, 100 year old townhouses in still gentrifying areas that must be thouroughly renovated to make them suitable for modern living are not worth the huge sums of money you've been paying.

I predict at least a 50% price correction in the next two years. What goes up 250% in 6 years can certainly go down 50% in two.

I'm not player hating, Brownstoner. I love this site. I just don't buy into the Ponzi Scheme that is the Brooklyn townhouse market.

Posted by: Anonymous at November 9, 2006 12:42 PM

Folks in the industry who actually sell townhouses know that many houses are selling for around their asking prices or for the asking price right now, espceially if they are well renovated. of course, if they are wildly overpriced this is not the case, but anything priced appropriately and decent is going. believe whatever you want but those are the facts.

Posted by: Anonymous at November 9, 2006 12:51 PM

it's a 1 family house.

Posted by: Anonymous at November 9, 2006 12:51 PM

Brownstoner,

It's not surprising you've been getting those emails. Very little is selling and real estate agents probably feel they have to blame somebody.

Other than you and the guy who runs Curbed, who else is there to blame? Of course the slowing market has nothing to do with you, but what does that matter to them?

Also, have you considered adding a townhouse or two to your Friday roundup that you figure could be renovated and sold at a profit.

I haven't seen anything like that for sale in a long time. Every boarded up shell on the market is just as expensive as a "renovated" house up the block.

Posted by: Anonymous at November 9, 2006 12:55 PM

Anon 12:51,

Do a simple townhouse search on the NY Times in Brooklyn. Hundreds of townhouses have been sitting on the market for months and months depsite price reductions.

Nothing like this has happened for years. This is clearly not a sign of a healthy houseing market.

Posted by: Anonymous at November 9, 2006 12:59 PM

Anon 12:55: Information that potentially earn an investor a profit is worth money. It takes alot of legwork to scout and assess properties.

Posted by: Anonymous at November 9, 2006 1:00 PM

Anon 1:00pm,

I agree, that's why I was hoping Brownstoner could do it for me.

It also takes a lot of luck!

Posted by: Anonymous at November 9, 2006 1:03 PM

In the "emerging" areas of the Brownstone Belt there are many that can function as a sort of birddog for the novice investor. Have you considered striking up some sort of agreement with the many lingering crackheads in the areas you may be interested in?

Posted by: Anonymous at November 9, 2006 1:06 PM

It seems strange to me, how you can say paying 1.425MM is a steal? I know that is a good area, but really. Also, when areas that have just started gentrifying in the past year or so, or not even yet (Clinton Hill, Bed-Stuy, Prospect Hghts, Crown Hghts, Fort Greene, Prospect Lefferts, Red Hook) are commanding prices the same or more than already established areas, such as Park Slope, Bklyn Heights, Carroll Gardens or even Boerum Hill, then there is something wrong. People who are selling, are asking for prices, which are on the assumption, that the area is fully gentrified. Some people will get screwed, down the road, as they will defualt on their mtgs, though that could happen in the slope and such,too. You've got to be a millionaire to afford these houses now. Anybody got money to give away? :O>

Posted by: Anonymous at November 9, 2006 1:08 PM

anon 12:55 PM, you don't get it. Brooklyn has been 'discovered'. The deals have all disappeared. And if I'm wrong about that, you certainly won't find the deals on this site. You've got to do the leg work and get to the distressed owner before real estate brokers/agents or developers get to them.
Maybe the one thing that brownstoner could do to help, if he's interested, is to highlight the abandoned shells or vacant lots that are spread throughout the more popular nabes in downtown brooklyn.

Posted by: Anonymous at November 9, 2006 1:08 PM

I am sure Brownstoner has enough time on his hand to scout distressed properties for would-be ("wannabe?") investors. And he can even find funding and coordinate the renovation and market the finished product for you. What is story with this armchair approach?

Posted by: Anonymous at November 9, 2006 1:13 PM

Anon 1:08, you have no idea what you're talking about. Just because you've just discovered brooklyn, doesn't mean that the gentrification of (Clinton Hill, Bed-Stuy, Prospect Hghts, Crown Hghts, Fort Greene, Prospect Lefferts, Red Hook) was marked when you opened your eyes to them. I can only speak from personal experience, but gentrification in Clinton Hill & Fort Greene started at least 6-7 years ago. Prospect Heights, at least 4-5 years ago.

And just because an area's residents are predominantly white, doesn't make it “established”. Brooklyn is full of working-class neighborhoods that are predominantly white. I can assure you that the majority of residents in Fort Greene are in a much higher tax bracket then some of your named "established areas". FG & CH (the real FG & CH, not the real estate agent over-extended geographic lines) are both "truly" diverse in terms of ethnicity, culture and professions, but the class remains similar among all ethnic groups – even where the new arrivals are concerned. That’s part of the charm : )

Can’t say the same about other areas…

Posted by: Anonymous at November 9, 2006 1:41 PM

People just out of college have historically rented in the UES and UWS, so I don't see any change there. Rents are still cheaper in Brooklyn, as are purchase prices.

No doubt the increases we've seen in Brooklyn in the past will not continue and there will be drops in prices from the often crazy heights of the past few years. However, what you will not see are the %50 percent reductions. Brooklyn has shifted back to a destination that new residents and young professionals and families are seeking out, as opposed to an alternative to Manhattan.

From what I can tell, there is very little on the market in terms of townhouses in prime brownstone areas, a lot less than when I was looking a few years ago.

And if 1.08 thinks that FG, Clinton Hill and Prospect Heights are "not even yet" gentrifying, well I guess that says a lot about your point of view, since FG is pretty much there, and PHeights and Clinton Hill are no longer deals in any sense of the word and have all of the sorts of amenities you'd expect of a gentrifying/gentrified nabe (and more open from month to month).

If people think they're going to pick up a brownstone in decent shape that doesn't need a gut renovation for less 1.3 million in any neighborhood other than certain parts of Bed Stuy, Crown Heights, or PLG (in which case you can find some better deals), I doubt they will have any luck.

Posted by: Anonymous at November 9, 2006 1:44 PM

12:42 PM ---50% reduction?!?! man that a bold statement, got any stats or figures or an ecnomics degree to back that one up.

Posted by: Anonymous at November 9, 2006 2:06 PM

sounds very cheap price to me even for house needing lotsa work. 3rd street is very very nice street close to PrPk. Brownstoner must have some inside info to know this much... So any inside info on why the low price?

I notice some very overpriced houses sitting on market long time, or some 'difficult' houses also. But most listings I do see seem to go to contract in month or 2.
My opinion is from mostly observing Corcoran website for CobbleHill, BoerumHill, CarrollGardens.

Posted by: Anonymous at November 9, 2006 2:07 PM

50% reduction in two years is very possible.

Anyone who thinks what goes up can't go down is smok'n some good ole brownstone stinky.

Posted by: Anonymous at November 9, 2006 2:16 PM

Awesome, so I can expect to pick up a $750 - 800K brownstone in good shape with little major reno to do on a nice block in Fort Greene or Clinton Hill any day now. Can't wait! Thanks for the tip!

Posted by: Anonymous at November 9, 2006 2:22 PM

Townhouse prices in Brooklyn won't drop 50% tomorrow, buddy.

Like I said, it'll take two years.

Posted by: Anonymous at November 9, 2006 2:32 PM

It was a 2 family with the rental unit being on the top floor. A broker at BHS was trying to get me to look at it, but at 1.7 it was too steep for me as it needed a bunch of work. GL to the new buyer is all I can say.

Posted by: Anonymous at November 9, 2006 2:33 PM

It's still not a bad deal. After taxes, etc., you're looking at 1.5ish after close . 500k to customeize to your heart's content.

Posted by: Anonymous at November 9, 2006 2:40 PM

Tomorrow, two years, what's the difference, you have not posted a single study, chart, or anything to support this wild a$$ projection.

Posted by: Anonymous at November 9, 2006 2:40 PM

I'm not the guy who said "50% drop" but why not. Home prices nationwide (yes that means Brooklyn too) have appreciated with inflation since WWI. When I moved to Clinton Hill in 1997, a 4-story, 20-ft. brownstone could be had for $500K. If annual inflation is 4%, I would estimate today's value at

($500K) X (1.04) ^ 10 = $740K

This would be about a 50% drop. If brownstones could only be bought with cash, not nearly as many families and speculators would have afforded to push up values. It was the financing.

Housing is now the largest sector of the economy (consumer spending from HELOC's, construction, brokerage, lending, etc.) and it's all going DOWN.

Posted by: Anonymous at November 9, 2006 2:57 PM

Thanks Anon 2:57pm,

I'm the guy who thinks 50% lower in two years is likely. You're logic is better than my own.

Anon 2:40pm, seriously, are you a real estate agent? Who else would demand charts to prove something that hasn't happened yet?

It's a fact housing prices in Brooklyn have at least doubled in the last 5 years. Everybody and their mother knows this.

If you don't think prices can decline, you're delusional or too young to have experienced a serious real estate price correction. It happens in every cycle and it will happen soon.

Posted by: Anonymous at November 9, 2006 3:10 PM

NYC is still much cheaper than London, Tokyo, Cairo and a host of other cities around the world. I'd like to think the best city in the U.S. is on par with other major cities of the world. With Brooklyn being an important part of the NYC real estate market, how can anyone think we can drop 50% from our current prices anytime ever in the future. Do you know of a meteor that's about to hit the city that I don't know about.

Posted by: Anonymous at November 9, 2006 3:11 PM

Cairo?

Dude, you can trade a donkey for classic six over there!

Posted by: Anonymous at November 9, 2006 3:14 PM

"Do you know of a meteor that's about to hit the city that I don't know about."

Yeah, it's called a recession.

Posted by: Anonymous at November 9, 2006 3:15 PM

Most Brooklyn townhouses are 3, 4 or 5 times cheaper than anything similar in Manhattan. Brooklyn was undervalued prior to this run up, and entire neighorhoods have changed in terms of amenities and critical mass of affluent urban residents. I think the key here too is that families bought most of the brownstones, not speculators, and they're not leaving anytime soon anyway. Sorry, but baring some other economic catostrophe, 50% price chops ain't gonna happen.

Posted by: Anonymous at November 9, 2006 3:17 PM

The last recession resulted in a surge in real estate values in Brooklyn.

Posted by: Anonymous at November 9, 2006 3:18 PM

No. What you're referring to (post 9/11) was not a recession. It was supposed to be. It was rescued by low interest rates.

The last recession was after the 1987 Wall Street collapse. Real estate then certainly did NOT surge.

Posted by: Anonymous at November 9, 2006 3:21 PM

2:40 PM no not a RE agent, just someone that works with like a zillion MBA and if you make anykind of statement like that w/o any backup, you will be chucked out of any meeting so fast.

Posted by: Anonymous at November 9, 2006 3:26 PM

Circa 1987,

"40% price chops (after inflation adjustments) ain't gonna happen."

They did.

Posted by: Anonymous at November 9, 2006 3:30 PM

3:26,

Back up:

www.youdovoodoo.com
www.thehousingbubbleblog.com
www.natefind.com (reduced brooklyn listings - note days on market)

Posted by: Anonymous at November 9, 2006 3:37 PM

I won't be "chucked" out of any meetings because I don't go to meetings.

I own buildings and I make all the decisions myself. Once in a while I talk on the phone, of course.

You can't prove anything that's going to happen in the future, Mr. MBA.

Just like most mutual funds underperform index funds, your charts and calculations are worthless.

As a long term real estate investment, Brooklyn is fine. But I'd hold off buying in the next year or two, charts and all.

Posted by: Anonymous at November 9, 2006 3:38 PM

Gee not only is 3:38 PM a fourtune teller, they are a sexist for assuming that 3:26 PM is a "Mr."

And if: You can't prove anything that's going to happen in the future" then why keep insisting on 50%, why not 38%, 53% or some equally unsubstantiated number? If you going to pull a number outta your butt, then expect for people to question it.

Posted by: Anonymous at November 9, 2006 3:47 PM

Anon 2:57... without arguing your 50% drop theory, you are seriously cherrypicking your starting point for comparison. I bought in 1997 too, and so I remember that was very nearly the nadir of the last housing trough. (The absolute bottom was maybe 1995.)

You will get very different figures if you calculated 4% annual inflation from the last real-estate peak (1989) than if you calculate them from the near bottom (1997).

Posted by: Anonymous at November 9, 2006 3:54 PM

3:54,

I agree with your feedback. However, I think my 1997 price of $500K (wow, came a long way since then) is conservative for Clinton Hill and should offset the array of different results.

Where'd you buy and for how much?

Posted by: Anonymous at November 9, 2006 4:16 PM

here we go again with renters posting predictions about 50% drops in prices. The only people who would sell their home at such a reduction are the severely desperate and deceased...not enough of those people bring prices down. If there were such a recession that would cause a price drop of that magnitude, it would mean much more than a recession...it would mean another great depression and most of us would be out of work.

Attn die hard renters and people looking for a deal: aint gonna happen.

You want to point to the recession of the early 90s? Then tell me what is precipating a repeat of that now? The economy is doing well!

I might also point out that the "suckers" who bought at the height of the late 80s market and suffered the same kind of idiotic statements then are now sleeping on a pile of cash and laughing at all the renters who told them they made a bad investment.

Brooklyn was always undervalued pre boom. Manhattanites and others thought Brooklyn was some kind of war zone. Then they crossed the bridge and realized how different it really was. Boom, boom, boom. Prices are just flattening out....50% cut is absurb. You might as well wait for someone to hand you the keys for free.

Posted by: Anonymous at November 9, 2006 4:16 PM

earning $600k per year?!? , try taking a zero off the end and you have I what I earn, sad isn't it?

Posted by: Anonymous at November 9, 2006 4:22 PM

a gut renovation cost a lot more than 500k for those who think they are creating a 2mm brownstone... dont forget it will take you over 1 yr to do it so .........

Posted by: Anonymous at November 9, 2006 4:26 PM

Duh. People who make 600K a year slack off just like everyone else.

Posted by: Anonymous at November 9, 2006 4:30 PM

4:16,

Will we be out of work permanently?

What do you think it is that is making the economy appear well?

Do you honestly think ALL those "suckers" kept their jobs and did not succumb to foreclosure?

Was Brooklyn ALWAYS undervalued?

Naw, no keys. A house will always have some intrinsic value, just not 3 times pre-boom levels.

Posted by: Anonymous at November 9, 2006 4:32 PM

Brooklyn is the new Sausalito.

Posted by: Anonymous at November 9, 2006 4:53 PM

It's me here. Mr. 50% drop guy.

I'm not a renter. I own and could afford to buy another house without selling the one I live in.

A 50% decrease is a ballpark estimate. Like I said earlier, if it can go up a couple hundred percent in six years, why can't it go down 50% in two?

The real estate market is largely built on hype, just like the stock market bubble was, but it's not nearly as liquid.

Just like it only takes a couple big sales in a particular part of Brooklyn to drastically increases prices,
a couple low priced sales, will drastically reduce them.

Considering there are hundreds of Brooklyn townhouses sitting on the market now for months and months, a few sellers are bound to panic and sell low soon. There's no way this house of cards will stay standing.

Posted by: Anonymous at November 9, 2006 5:49 PM

you know that not all listings are listed on THIS site, right?

Posted by: Anonymous at November 9, 2006 5:58 PM

Anon 5:55pm,

Do an NY Times search. There are tons of homes in that section of the hood being offered around 1.5 million.

What are you talking about?

Posted by: Anonymous at November 9, 2006 6:00 PM

the address is 505 3rd street. there were never any teenagers in this house.

Posted by: Anonymous at November 9, 2006 6:52 PM

Where Mr. 50% is severely flawed in his/her arguments is this - the only way the market would ever drop that much is if people actually did agree to sell, period. They do have a choice, you know. And what the heck is their incentive? Okay maybe those going bankrupt, and old people who have lived in a townhouse all their lives and won't lose money selling at a big discount. Which would comprise like what, 1% of the current Park Slope townhouse residents? Everybody else would hang in there. No matter whether there's divorce, changing jobs, etc. they'd never sell for less than they owe for their mortgage. It's absurd to even suggest it. Even now the only response a lot of sellers are having to the softer market is to lower the price a little and then they say "forget it" and take it back off the market. Someone was telling me a friend of theirs did that this week. We almost did that and then we just got an offer. People are not going to be giving away well-located property for nothing. These townhouses were big investments for people. If they have to wait several years to sell then that's what they'll do. Most people make this kind of purchase intending to live in it all their lives anyway. It's how they justify the expense. The only reason there were so many townhouses on the market before, is people saw a "why not?" opportunity and sold. But now it's become "why on earth should I sell?". There's just no reason to sell.

Posted by: Anonymous at November 9, 2006 10:14 PM

It was impossible not to have heard about this house unless you are working with the brokers who do not co-broke. It sat on the market for months. I think it had a deal and then that deal fell apart. Great house, not so wide, needs a complete reno in my book. If you are willing to do work you can get a house that costs less. What they used to call 'sweat equity', remember that quaint term?

Posted by: Anonymous at November 10, 2006 6:49 PM

the house has no backyard. It is right up against a smelly fish store and a dry cleaner.

Posted by: Anonymous at November 10, 2006 10:56 PM

A house is only worth what someone else is willing to pay for it. In this case it was $1.425. End of story.

As inventories build this will only get worse. Maybe a 50% drop is unlikely. But 25/30% is by no means out of the question.

Posted by: Anonymous at November 11, 2006 12:17 PM

Agree, 50% may be excessive but a big correction is likely on its way.

Anon 10:14, if you really think brownstone owners are somehow different from owner of other types of housing and will simply "not sell" instead of lower their asking prices, you know absolutely NOTHING about basic economics. You're not special. Look in the mirror.

Posted by: Anonymous at November 11, 2006 10:43 PM

The "look in the mirror" comment was meant to say your just like everybody else. Please don't take it as some sort of an insult -- none was meant.

Posted by: Anonymous at November 11, 2006 10:45 PM

Of course it's a steal...for the sellers.

Posted by: Anonymous at November 14, 2006 2:13 AM