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August 8, 2007
House of the Day: 87 Garfield Revisited
While most signs point to a fairly strong market for townhouses in the more desirable neighborhoods of Brownstone Brooklyn, one property in Park Slope just took a 20 percent price cut after failing to attract interest at its initial asking price of $2,500,000. When we wrote about 87 Garfield Place back in June, we thought it looked best-suited to a condo conversion because of its unusually large floorplates. Before someone with some kind of vested interest chimed in multiple times in the comments section, several readers expressed negative views about both the price and layout. Seems the cynics were right. We'll see whether the new price of $1,990,000 stimulates more interest.
87 Garfield Place [Corcoran] GMAP P*Shark
House of the Day: 87 Garfield Place [Brownstoner]
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Comments
a shame the peak is missing and it's filled in with mismatched brickwork...
Posted by: bren at August 8, 2007 1:39 PM
Still way too much money for a 3 story below 5th avenue...
Posted by: anon at August 8, 2007 1:43 PM
it is above 5th ave not below - but I agree still too much for the condition - I have seen the inside and it needs all new everything I say 1.5
what are your thoughts
Posted by: anon at August 8, 2007 1:58 PM
I just dont like the facade to this place. At least for a primary residence. Investment wise I say 1.5 but I with the decrease I say someone will pick it up in the 1.75 - 1.8 range.
Posted by: Anony at August 8, 2007 2:06 PM
What's the fundamental value? Rental income of $6000/month? If so, then I think it should go for $900k max.
That's a much better way of valuing an investment than comps, given that values have been overinflated by the credit bubble (you know, that thing that's got Wall Street freaking out lately).
Posted by: Anon at August 8, 2007 2:21 PM
2:21....since you say home values are overinflated, why do you not use the same logic for the rental income figures you mention?
if you think this is 900K max which personally I think is rather silly to say, then why did you not decrease your 6000 figure accordingly?
without comps, it comes down to complete speculation and opinion, which sounds even scarier than where we are now to me.
Posted by: slopehead at August 8, 2007 2:28 PM
900K max. You'd have a line down the block of people with checks in hand for that kinda price.
Price depends on what can do with building - current configuration is bad. Someone would need to go in and relocate kitchens, baths.
If zoning permits - could duplex the 1st floor with english basement adding 'rec space'. and if still FAR (which might not exist hence the drop in price) - add a room on top of 3rd floor with large outdoor terrace.
New cornice is easily added.
Posted by: Anonymous at August 8, 2007 2:40 PM
rental income doesn't reflect speculative value or the credit bubble (people don't borrow to pay their rent...unless they're living off of credit cards, which does happens but is a bad thing).
expectations will change. sale prices have dropped a ton in miami and other parts of florida and things still aren't moving.
Posted by: anon at August 8, 2007 2:45 PM
The main issue with this house is that the configuration as such means that any single floor is really unlivable space for a family. You really need to get 2 bedrooms, each with windows (not interior space), in each apartment, and that isn't the case as such. However, if cheap enough, if could be a good space for 2 families to share -- perhaps even splitting the middle floor, if the english basement isn't legal space. But I don't see spending $2 million for this -- you can easily get a proper 4-story 20 x 45 house in other nice neighborhoods for this price, and the renovation isn't as complicated.
Posted by: Anonymous at August 8, 2007 2:49 PM
comparing new york to miami is apples and oranges.
most of the condos built in the last 7 years in miami were for second home purchases. besides foreign investors here, we do not have that same scenario. these places in brooklyn are being bought to be lived in.
while i don't disagree with the fact that prices may stagnate for a bit, giving a reason that because miami must, then we must gives little validity to your arguement.
oh...and have you ever BEEN to miami? it's ok to go to south beach once in a blue moon, but i don't know a lot of people who are dying to live in miami.
i do, however know quite a few who would give their left arm to live in new york city.
Posted by: slopehead at August 8, 2007 3:32 PM
re: 3:32 --
But that's exactly the explanation people have been giving for why the NYC market, esp. luxe, is still hot -- rich foreigners buying second homes. And there are a lot of people who want to live in Miami; it's the financial center for Latin America and attracts all sorts of people who want to be immersed in Latin American culture while still living in the U.S.
There's also been a _ton_ of condo development in NYC (see 4th avenue, Dumbo, Williamsburg, etc.). Miami and NYC may not be so different...
Posted by: anon at August 8, 2007 3:58 PM
My favorite bit of floorplan doublspeak: Can't legally call it a bedroom...hmmmm...depends on what is is...let's call it a "Sleep Area". My favorite "Sleep Area" is located just off the kitchen on the parlour floor. Think of it as a new twist on the old saying "Wake and Bake".
Nice location, wonder if it is delivered vacant, $6000/per month in rental income seems low for three apartments in prime Park Slope.
Posted by: kuroko at August 8, 2007 4:01 PM
If the seller holds on, it might end up two doors down from that Enrique Norten thing we had pimped here two months back...
http://brownstoner.com/brownstoner/archives/2007/06/enrique_norten.php
Posted by: Gari N. Corp at August 8, 2007 4:03 PM
anon 2:49 - this prop isn't for someone looking of 'proper' 20x45 ft 4 story house. And even if were - for under $2m not going to get 'proper' neighborhood.
This is for a developer for condo conversion. A 20 x 45 4 story is 3600 sf this is over 5000 and maybe potential for more.
Posted by: Anonymous at August 8, 2007 4:05 PM
900k max? Just dumb.
If you assume rent of $3,000 per floor (which is probably quite conservative given Park Slope rents) - you make $9,000 per month. Assume also a 720k mortgage (180k down) - payments of about $5,000 per month. Assume other costs of $1,000 per month. That's $3,000 monthly profit (not assuming tax benefits) - thus, you're buying fairly prime Brooklyn real estate at a 20 cap.
I just wish people knew what they were talking about before they spouted garbage.
Posted by: dcardoni at August 8, 2007 4:24 PM
dcardoni --
You proved my point. I said my calculations were based on an assumption of $6000/month. If you increase that by $3000, then yes, you'll have a $3000 monthly profit. Who's dumb here?
If the rent roll is closer to $9000/month, than I'd guess $1.3 million is ballpark based on fundamentals. Does someone with a better sense of the rental market than me know what a fair rent would be?
Posted by: anon at August 8, 2007 4:34 PM
Sorry, I think $3,000 month seems high for that layout. It works great for a couple, but not for a family. It's a giant 1 bedroom. Is that the going rate for 1 bedrooms?
Posted by: Anonymous at August 8, 2007 5:21 PM
The layout could be fixed. Referring to the thrid floor in Corcoran's layout pics, you would change the kitchen+bath into a bedroom, and the dining room into another bedroom, both of them accessed from a hallway where that long closet on the right is now. Put the kitchen, bathroom, dining room and living room in the center of the house. The front could be a third (huge) bedroom or a luxurious opening up of the dining/living area.
Or more likely (because who wants a 3-bed/1-bath?), have what I called the second bedroom be the living room, and put a bedroom in the front. You could have two nice 2-bed/1-bath apts and one huge 3-bed/2-bath. Total rent roll in that configuration would be about $9k/mo.
You *could* have that, after $500k or more in renovation (during which time you are paying the mortgage on the $2MM with no rental income). Meh.
My personal valuation puts it at about $1.5MM, which in this market means it will probably go for 1.8.
Posted by: Mr. Speculator at August 8, 2007 6:52 PM
Darren Kearns from Corcoran seriously mispriced this house to get the listing and gave the heirs a bunch of crap. This is typical. I feel sorry for them taking a load of bull from an agent who knows nothing about the Park Slope market..
Posted by: Anonymous at August 8, 2007 8:35 PM
Please, don't waste your time feel sorry for folks who did absolutely nothing and now going to split a lottery winning.
Posted by: Anonymous at August 8, 2007 9:27 PM
Home prices will get hit everywhere, its a matter of time. But Manhattan and some parts of Brooklyn are still going up for now. How long that will last is beyond anyone. Maybe a year or two more and than a good 10-20 percent drop will occur. When the foreclosures start on the east coast than I will be buying again.
Posted by: JON at August 8, 2007 10:04 PM
Home prices will get hit everywhere, its a matter of time. But Manhattan and some parts of Brooklyn are still going up for now. How long that will last is beyond anyone. Maybe a year or two more and than a good 10-20 percent drop will occur. When the foreclosures start on the east coast than I will be buying again.
Posted by: JON at August 8, 2007 10:13 PM
"[WHEN] the foreclosures start on the east coast than I will be buying again."
Where've you been?
http://tinyurl.com/2v6hyd
Posted by: Anonymous at August 8, 2007 10:36 PM
A. why are there weirdos who believe that NYC is immune to real estate's ups and downs. So crazy to believe that nyc is SO WONDERFUL that prices will never fall. We're just closer to the Wall Street bubble. Believe me, prices here can fall just like they do in Miami and everywhere else. and they will. maybe dramatically, maybe not. but we are not IMMUNE.
B. Why is anyone talking about lay out when talking about value? That is the easiest, cheapest thing in the world to fix. and if that is what is scaring you off - you are the ones creating great deals for other people! I thought everyone here was a "fixer upper" type.
Posted by: anon at August 9, 2007 12:09 AM
A. They haven't read http://tinyurl.com/mythk .
B. I don't think fixing layout is significantly cheap. It is usually more expensive and time-consuming than originally imagined (contractors never hit their mark). With a "move-in" you have less uncertainty. During the last bust ('87 to '95) most buyers were shying away from fixer-uppers. I think that's what's happening now.
Posted by: Anonymous at August 9, 2007 8:33 AM
By the time you realize that the RE dropped in Manhattan and in Brooklyn it will be too late for you to buy because it will be on the way up again. Look at the inventory now. Where are all the listings for townhomes that run around 2.5 million that does not need fixing up?
Most people who bought townhomes in the last few years were able to afford their homes.
Keep waiting and you will never be in a townhome
Posted by: Anonymous at August 9, 2007 10:09 AM
i think it's equally dellusional for all of the people who seem to be praying for the housing market to crash to think that all of the sudden you will be priced back into the market.
maybe that's why people get so defensive.
while i think prices may come down some, let's say 20% even (which would be A LOT!) is THAT going to make a 1.5 or 2 million dollar place now affordable to all of you that keep saying the nyc housing market is headed for the toilet??
doubtful. in which case, you just like spouting this stuff to get a rise out of people.
Posted by: slopehead at August 9, 2007 11:21 AM
anon at August 8, 2007 4:34 PM
If your point was that by putting make-believe-assumptions into an equation, one can come up with a make-believe determination, why would you even make it.
These are 1,400 sq. ft. two-bedroom apartments in pretty prime Park Slope - comps all rent at much more than $3,000 per month (closer to $4,000) - I actually thought about and researched this before I posted my statement (unlike you, who just assume a phantom rent with no back-up support). So, if you want to unilaterally estimate that you'll rent at 50% of market, then, go ahead, but it's just a stupid assumption.
I don't even know why I respond to idiotic statements like "I think it should go for 900k max"
Posted by: dcardoni at August 9, 2007 1:42 PM
anon at August 8, 2007 4:34 PM
If your point was that by putting make-believe-assumptions into an equation, one can come up with a make-believe determination, why would you even make it.
These are 1,400 sq. ft. two-bedroom apartments in pretty prime Park Slope - comps all rent at much more than $3,000 per month (closer to $4,000) - I actually thought about and researched this before I posted my statement (unlike you, who just assume a phantom rent with no back-up support). So, if you want to unilaterally estimate that you'll rent at 50% of market, then, go ahead, but it's just a stupid assumption.
I don't even know why I respond to idiotic statements like "I think it should go for 900k max" - so I'm just as much to blame for even attributing any validity to the spew.
Posted by: dcardoni at August 9, 2007 1:42 PM
These are 1,400 sq. ft. two-bedroom apartments in pretty prime Park Slope"
The area is prime but these are NOT two bedroom apartments. Not without substantial renovations of the gut variety. No one is going to pay $1500/each for a windowless "sleeping area."
Posted by: guest at August 20, 2007 2:19 PM
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