House of the Day: 53 South Elliott Place

Wow. It's a beautiful space, and the current owners have incredible taste in decor, furniture, etc. One of the nicest "stagings" I've seen in a real estate listing. Can't begin to comment on the price, though, as 2.7 million and 3.7 million are essentially the same to me...

Posted by: guest at September 5, 2007 1:36 PM

sure: $3.7M / 3600sf = 1,027 per sq.ft.
or as an investment 40x gross rent
$2M-$2.4M may make sense to a user

Posted by: guest at September 5, 2007 1:55 PM

The fact that the pictures are all close-ups of the design and decor staging is a red flag. It's also only 3600 sq.ft. Crazy! That block is far inferior to South Portland, right around the corner, where you have, in my opinion, a much nicer house for sale (30 South Portland) and 1 million less.

Posted by: guest at September 5, 2007 1:55 PM

no way anyone lived there - isnt this the place that sold less than a year ago and needed a ton of work?

Posted by: guest at September 5, 2007 1:56 PM

This house is a flip--as per Property Shark, this place was last sold on 5/19/05 for $1.75 million, so Minsky's description of "only 3 owners," while maybe technically true, is also totally deceptive.

Posted by: guest at September 5, 2007 2:20 PM

There are many lovely things about this house and the staging and professional photos really show it off. But for this money, you had better really like that master bath because from the floor plan it looks like it's the only full bath in the house.

Posted by: guest at September 5, 2007 2:24 PM

Fjorder must be either the owner or minsk himself as the comment Love the master bath is bullshit since there is no bathroom pictured in the listing. and by the way, whats up with that? also looks like there is no deck and there are no pictures of the yard. f**k the picture of a table and drape- lets see bathrooms and the backyard!

Posted by: guest at September 5, 2007 2:25 PM

the previous owner had owned it forever - he died in 2005 - there is a plaque with his name on the sidewalk in front of the house.

south portland is way better deal but its a 3 family and the top 3 floors need a lot of work to get into top shape so it has its issues but for 1mm less that is more than enough to get job done AND u have 5 floors.

Posted by: guest at September 5, 2007 2:48 PM

That price is really insane. People, the house doesn't come with furniture! And it's tiny! But there's a sucker born every minute so maybe it will sell for that.

Posted by: guest at September 5, 2007 3:11 PM

Firstly, how about Corcoran developing some accurate floor plans. The plans posted on their website don't match the photos. With that said, I can't believe what I see. The plans show 6 bedrooms and what appears to be 1 usable bathroom, barring the powder room off the kitchen. And contradictory to photo #11, the plan shows the tub in its original SRO configuration, which would have served as a shower. So is there a shower? Photo 11 shows a frees standing tub. Photo 11 also shows 2 windows and a fireplace so are we to assume this bathroom is actually one of the bedrooms, which means the bedroom count is 5 total. what gives?

Posted by: guest at September 5, 2007 3:27 PM

I own a brownstone in CH and happen to work in the real estate group at a major Wall St. bank. I also tend to follow the neighborhood residential market pretty closely and think these prices are absurd. Kudos to Jerry for trying but I think the market is set for a correction, but the sellers and brokers are not yet prepared to believe it. In fact Mr. B., I think your estimate of $2.7mm is also too high by several hundred thousand dollars and might be like $800-$900k off the mark as the market resets over the next 18-months. Here are a couple reasons why: 1) Financial services and related industries are big drivers of residential real estate in NYC (Witness the significant price run up in prices beginning late last year when record Wall St. bonuses were announced). As a result of the credit crisis, much of the deal flow at the banks and private equity/hedge funds has come to a standstill. Query: How long does it take an investment bank to determine viability of paying guys multi million dollar bonuses when those people are not doing deals? Answer: Not long – layoffs are coming. Even for people that keep their jobs, bonuses will likely be down and the outlook for 2008 is not good. So, when people that made $1mm last year look to the future, unless they have lots of cash on the sidelines, most will not be thinking about dropping $3.7mm for Jerry’s very nice, but not especially extraordinary townhouse in Ft. Greene. 2) Mortgages are much more expensive and lenders are requiring larger downpayments. Several months ago I got a commitment for 90% financing (total loan was well in excess of $2mm) at an interest rate of 6.5%. Today, the same mortgage broker gave me a quote for max leverage of 80% (again north of $2mm loan amount) at 7.25%. This change in the mortgage markets means that I could have taken down the $3.7mm townhouse with $370k in May, but now would have to pony up $740k. So if you think there is a small group of people that have $370k in cash for a down payment, how much smaller is the group of people with $740k in cash for a down payment. Also, whereas the earlier 90% loan was interest only, the new loan would require amortization, resulting in a materially higher monthly mortgage payment. In sum, when you equalize the monthly mortgage payments, I could have paid approximately $400,000 more for a house in May with a smaller downpayment percentage-wise than I can today. Hmmm, it’s been a couple years since business school, but I think that the higher cost of financing and higher equity requirements will necessarily have an impact on value. I mean really, how many people have that kind of liquidity and would be willing to sink it into real estate in FG/CH?

I know, I know, there will be many who chime in that I am overreacting (remember I am also an owner so I don’t have an economic motivation to talk down values). Some will have to wait for the annual NYT article about Wall St. bonuses that prints over the holidays and you’ll wait until the WSJ and CNBC are all doing stories about the capital markets slowdown and the subsequent effect on residential real estate values in NYC. But by that time, your neighbors will have caught on and those that want to get out will rush to sell. As more supply floods the market, we all know what happens to prices if there is not enough demand to meet the supply.

Look, the bottom line is that I am closely plugged into the global capital markets and our neighborhood real estate scene and I honestly believe that the credit crunch which has resulted in more conservative lending standards, as well as negative near term economic prospects for finance-related jobs, will result in a reduction in our neighborhood property values. I don’t think there will be a disastrous crash because I do believe that there is adequate interest in our ‘hoods to sustain a reasonable floor. However, a 10-20% decline will bring values back to where they were a couple of years ago and that outcome seems fairly logical to me.

Anyway, best of luck Jerry. If I was willing to make my identity known, I would bet you a thousand bucks that this house doesn’t clear for anything with a 3-handle on it and would probably be willing to bet it sells for less than $2.5mm.

Posted by: guest at September 5, 2007 3:48 PM

Wow, 3:48, I am also in iBanking industry (though I am back back office so I don't own a house, nor am I one of the lucky one who gets a six or seven figure bonus) but I would agree wholeheartedly with what you said. I can't imagine anyone is going to push back on what you have said. I guess it's truly time for those of us who were priced out of the market a few years ago to sit tight and keep writing those rent checks.

Posted by: guest at September 5, 2007 3:56 PM

I like using classic 1950's modern furniture in an old brownstone but it may be a tad overdone here.
I think it looks like a nice conventional house with regular rooms. Nothing particualrly extraordinary except the price.
I do not think the house is worth 3.7 million, but I don't think it is worth 2.7 million either, so I am not be on the required Clinton Hill wavelength here.
Houses in Brooklyn Heights go for this much, that's crazy too, so who knows?

Posted by: guest at September 5, 2007 4:02 PM

I think a similar house on the upper west side, west village or upper east side would fetch close to 6 or 7 million so I don't think for a second that some of those would be buyers would consider a place in Ft. Greene for half that price.

Brooklyn, in many ways is becoming preferable over Manhattan for numerous reasons.

Posted by: guest at September 5, 2007 4:16 PM

3:48 said:

"Several months ago I got a commitment for 90% financing (total loan was well in excess of $2mm) at an interest rate of 6.5%. Today, the same mortgage broker gave me a quote for max leverage of 80% (again north of $2mm loan amount) at 7.25%. This change in the mortgage markets means that I could have taken down the $3.7mm townhouse with $370k in May, but now would have to pony up $740k. So if you think there is a small group of people that have $370k in cash for a down payment, how much smaller is the group of people with $740k in cash for a down payment. Also, whereas the earlier 90% loan was interest only, the new loan would require amortization, resulting in a materially higher monthly mortgage payment."

Of everything that this person so intelligently stated, one sentence jumps out at me:

"Also, whereas the earlier 90% loan was interest only, the new loan would require amortization, resulting in a materially higher monthly mortgage payment."

This, to me, is the crux of the problem and maybe a huge reason why we're in a whirlwind of shit right now: shouldn't all mortgages require amortization? Especially loans of millions of dollars?

How could anyone, even in heady times of prosperity, take on an interest-only loan of 2 million dollars? That is absolutely wacked, IMHO.

Posted by: guest at September 5, 2007 4:39 PM

3:48 - you are so obviously right and it is so nice to have someone who knows what they are talking about for once give a clear explanation for the imminent price decline. I guess all the protesters are finally piping down with their incessant fantasy that "nyc is different, prices will NEVER fall here."

Posted by: guest at September 5, 2007 4:44 PM

You can get a nicer house in Brooklyn Heights for the same price.

http://realestate.nytimes.com/sales/detail/392-1840

I lived in Fort Greene before I moved out last year after being robbed, twice, and mugged, once in three years.

Let's get real.

Posted by: guest at September 5, 2007 4:45 PM

This layout really raises some questions, especially at 3.7 million, when you expect something to be perfect.

First, if you are renovating top to bottom, why put the laundry on the ground floor? Who wants to drag clothes up and down 3 flights from the bedroom? Or do people with incomes to afford this not care because their hired help does all that? (I wouldn't know).

Also, the floorplan really doesn't show where bathrooms are. There must be more, but don't understand why they aren't in floorplan.

Finally, as much as I like walking out from kitchen into garden, having the parlor floor as a parlor usually means the nicest floor of your house is never used. I'm sure people will disagree, but whenever I've been in houses with this layout, people are always hangin out in the ground floor by the kitchen. I don't know why, but I've experienced it again and again. Sure, if you have a formal party, you go into the parlor, but when just hanging out, you are on the ground floor.

Posted by: guest at September 5, 2007 5:21 PM

I don't see how 3:48 is so obviously right. I see that he/she has an opinion.

I also see bidding wars still and many people out looking.

My friend had her first open house on her place on Sunday. Obviously a slow weekend with the holiday but she said she had about 20 people come through and 3 offers (2 over ask) by the end of the day yesterday. She lives in Prospect Heights.

So where is the correlation between what people hypothesize and what is actually going on? I see very little.

She will be selling her place for a little over 210K more than she paid for it 2 years ago assuming the offer goes through. Can someone please explain to me how this signifies a tanking market?

Posted by: guest at September 5, 2007 5:21 PM

5:21 - 3:48 said there will be an adjustment over the next 18 months. don't be so literal minded.

Posted by: guest at September 5, 2007 5:29 PM

"How could anyone, even in heady times of prosperity, take on an interest-only loan of 2 million dollars? That is absolutely wacked, IMHO."

4:39, people who take out interest only mortgages (at least the smart ones) do so because they know they will be able to pay the monthly nut AND pay the mortgage down in large chunks periodically throughout the year. As they do this their monthy payment gradually decreases. When you have a fixed mortgage with amortization your monthly payment remains the same in year 30 as it was in year 1.

Posted by: guest at September 5, 2007 5:40 PM

Don't you think that despite all the news in the headlines about the market tanking and credit being scarce that this would affect things, NOW?!!

It seemingly isn't. That's all I'm saying. Nobody has any clue what's going to happen in 18 months. In 14 months, she could have made 300K instead of 210K. who knows. Either way, owning real estate in New York...as long as it's for the long run is a good bet.

It just so happens, that it's been a good bet even if you were in it for the short term lately. That's what might change slightly.

By the time 18 months rolls around, we will have a new president, people might be excited about the change and housing might take off again. You never know, but it's a very real possibilty since a lot of what happens in the housing market is psychological.

Hilary wins this thing and many will be elated and go out and buy themselves a present to celebrate. Perhaps a big ole house. Or a small one. Hopefully a smallish one as we all need to be more mindful of the environment.

Posted by: guest at September 5, 2007 5:41 PM

3:48 is absolutely right, 5:21. I don't see why you would take it so personally. Your "friend" might have gotten the offers because her property was considered a good deal, in spite of the market. A declining market does not mean that people pass on good deals. However, this listing is so absurd and over-the-top, not to mention arbitrarily and capriciously priced, that it is even more offensive considering the current softening of the market.

Also, the house itself is small (3600 sq. ft), across from a high school (!), was purchased for 1.75 million only 2-years ago, and is not in a prime Brooklyn area, period. This would not be a good deal even if the market were at peak. You can get a top-notch house in Park Slope or a nice one in Brooklyn Heights for this money, and not be across from a school or anywhere near AY not to mention the housing projects near the park.

Posted by: guest at September 5, 2007 5:45 PM

Housing markets move in slow motion. It takes years for them to top-out, fall and then bottom-out. Bottom could last for years as well.

http://tinyurl.com/mythk

Posted by: guest at September 5, 2007 5:56 PM

All this speculation. If someone sees the house and likes it , they will find a way buy it.Someone will come along and not give a damn about markets or smarkets.People pay that much and more for apts or condos in Manhattan so getting a house for 4 million is nothing to those who can afford it.Bottom line.

Posted by: guest at September 5, 2007 6:09 PM

6:09--right. But if you can afford to pay 4 mill for a house, you wouldn't be looking to live on that block in Ft. Greene, or in that area period. Especially not for only 3600 square feet! Is no one else shocked by how small that is?

Posted by: guest at September 5, 2007 6:12 PM

Why drop so much cash in Ft. Greene for a small house on a not-so-nice block, across from a freaking high school, when for 25K LESS you can get a much LARGER house on famous Montgomery Place in Park Slope, in 321 district (spare me the PS debate, bottom line is it increases your property value):

http://www.prudentialelliman.com/Listings.aspx?ListingID=861765&rentalperiod=&SearchType=houses&Region=NYC

Posted by: guest at September 5, 2007 6:33 PM

Well, well, Jerry, this is a little greedy even by your standards. Lovely house and not small (standard sized brownstone actually) but strip out the trendy furnishings and you're left with a good solid renovation -- nothing more. Also, I believe this is the same block as Fort Greene Tech H. S. A fine institution no doubt. But who needs 4,000 teenagers on the street twice a day?! We considered an arguably architecturally more distinguished house on that block back in 1999. It was on the market then for $650,000 and needed almost no work.

Btw, I completely agree with 3:48 and 5:56. There will be an adjustment of 10-20%; it may take another 6-12 months to arrive (the RE mkt didn't decline in NYC until 18mos after the 1987 Wall St crash); it could last 5-8 years.

Posted by: guest at September 5, 2007 6:35 PM

I lived a few doors down from this house ten years ago and the old man who lived in this house really took great care of it. I hear he paid under 10K for it in the 1960s. I really think that over 3 million is too much but set it high and come down a million?? As far as the school, remember that this school is one on the best HS in the City. The kids at Brooklyn Tech are different from kids at other schools. Only in the afternoon for an 1/2 hour around 3pm do you really hear them and a little in AM. I really never notice the school when I lived on S. Elliot PL. This house is a block from the park close to ALL the trains in the city A,C,2,3,4,5,Q,B,N,R etc..) BAM, Cruch, great food, Hospital, farmers market all in a short walking distance. This house is really in the heart of what people think of when they think of Brooklyn. FG is like the UN (well 10 years ago anyway) you found fun people from everywhere on the planet. This place is prime location for Brooklyn over the Heights and PS. So yes I do see it selling for 2.5 - 2.9 million. I just visited a 4 bedroom apt in the city that was 18m.

Posted by: guest at September 5, 2007 6:51 PM

As someone who also works in I-banking, I have been seeing the same things as 3:48. The consensus among folks on Wall Street with whom I have spoken is that bonuses will suffer this year across the board. There will be layoffs. The forecast for 2008 is generally dour.

Right now the pain has been limited in the media to leveraged finance and asset-backed circles, but the reality is that M&A is slowing tremendously, debt financings are not being done, even equity offerings have been delayed or cancelled. "Bull market" IPOs are out for the foreseeable future. In the commercial real estate sector, deals have also ground to a halt given the cost of financing, and that is if financing is even available at all. So I hate to say it, but on top of the asset-backed and lev fin businesses, expect M&A, debt and equity cap markets, real estate and private equity to take hits in terms of comp and headcount over the foreseeable future.

It's hard to see how this doesn't affect RE demand. Some folks point to the fact that the RE market thrived after 2001. It did, but there are (at least) four very key differences between then and now:
(1) Greenspan aggressively lowered interest rates from that point onward, which
(2) Created an overly liquid market for mortgages of all species, thereby
(3) Generating year-after-year of double digit appreciation, which is now behind us; and
(4) The dollar depreciated significantly, creating bargains for foreign buyers.

(1), (2) and (3) are history. Only (4) may still exist, but even that's debatable given that the current credit/liquidity squeeze is a global phenomenon.

Posted by: guest at September 5, 2007 7:49 PM

Real estate isn't as frequently traded as a commodity. So in general it hasn't experience crazy price fluctuations. Only a small percentage of people actually need to sell at any given time. There is a great deal of pent up demand with buyers now. And has been for some time. Many people are out looking. And I bet tons more would replace them if they thought prices might be going down a bit, which holds the whole thing up anyway. But at this point the change in financing really hasn't affected deals in Brooklyn yet. Not too many marginal buyers are looking to buy in our areas. I don't think that the financial services firm employees are what is driving this market either. So even if they experience some unemployment that shouldn't matter. Now if all the trust funds dry up that would of course be another matter.

Posted by: guest at September 5, 2007 8:10 PM

8:10 - I'm assuming you're a broker based on your "our areas" comment. What areas do you cover?

To your point, the financial services sector may not be the direct driver of Brooklyn demand, but it is a huge component of Manhattan demand, which in turn then drives Brooklyn demand.

Posted by: guest at September 5, 2007 8:21 PM

considering all the effort that went into staging this place, I find this pricing strategy insane. haven't we seen enough episodes of Flip That House to know that the number one rule is NOT to overprice! What's that saying? Pigs get slaughtered.

Posted by: guest at September 5, 2007 8:56 PM

I just heard they've received two offers today.

Thanks, Brownstoner!

This site sells properties, if nothing else.

I look forward to seeing the final selling price.

Posted by: guest at September 5, 2007 10:10 PM

Play the "Guess who 10:10PM is" game. Choose one:

1. Seller's broker
2. Any broker
3. Seller's broker's mother
4. Seller's broker's spouse
5. Crackhead

Posted by: guest at September 5, 2007 10:15 PM

I highly doubt this place got any offers. If so, then there are many suckers in this city.
I have heard, however, that there are multiple offers on the 30 South Portland Street house priced at 2.6 million. That house is worth it.

Posted by: guest at September 5, 2007 10:16 PM

8:10 here. Was referring to the areas that are often yakked about on this site. I am an agent. But don't blame me for keeping the prices up on purpose through hype here. I don't know that I care whether things keep going up so rapidly or not. If you sell you probably are going to be buying somewhere so the market is all connected in a lot of ways, since I don't see a mass exodus from Brooklyn. And anyway most people can't cash out because they need a roof over their head. Although there are certainly scenarios where prices go down. Hasn't happened yet. But I don't think the financial services sector will affect things all that much. Although I hope you guys all get to hang on to your jobs as long as possible for your sake.

Posted by: guest at September 5, 2007 10:32 PM

10:32 - thanks, right back at ya!

Posted by: guest at September 5, 2007 10:36 PM

Someday this war's gonna end. That'd be just fine with the boys on the boat. They weren't looking for anything more than a way home. Trouble is, I'd been back there, and I knew that it just didn't exist anymore.
Captain Benjamin L. Willard - Apocalypse Now

3:48 Right on brother!!!

The What

Posted by: guest at September 5, 2007 10:42 PM

I'm not sure what planet everyone lives on that they consider 3600 sq ft small. Maybe in mcmansion land it is, but not in good old nyc. I do have friends in Manhattan in 2 mill apts who are having more children and thinking of brooklyn. for these people maybe, with at least 1 mill liquid after selling and a healthy trust fund, this type of house would be appealing and seem relatively affordable. However, have to agree that fort greene is not as appealing to many people as bh, cobble hill, carroll gardens and - shudder as i say it - park slope.

Posted by: guest at September 6, 2007 1:06 AM

I don't even want to hear comments from people who think 3600 sf is small. Unless you have 6 kids or more.

Otherwise you are a wasteful, disgusting slob.

Doesn't matter, I also heard that they received an offer or two.

Commenters on this blog are like weathermen. You can be wrong EVERY TIME and still babble on every day as if you have some authority.

Posted by: guest at September 6, 2007 8:38 AM

It's not just financial services that is in danger. It's all jobs. All jobs will somehow be affected by drops in tax revenues, consumer spending, etc. Since unemployment is a lagging indicator (behind worsening economic results/revisions), few people are worried about it.

Posted by: guest at September 6, 2007 9:30 AM

"Hilary wins this thing and many will be elated and go out and buy themselves a present to celebrate."

In another country.

Posted by: guest at September 6, 2007 11:44 AM

"Commenters on this blog are like weathermen. You can be wrong EVERY TIME and still babble on every day as if you have some authority."

I love these comments. And how are you completely different?

Posted by: guest at September 6, 2007 11:47 AM

If you plan to celebrate by leaving the country 11:44 if Hil wins, I'm terrified that you choose to stay here for the past 6.

TERRIFIED.

Posted by: guest at September 6, 2007 1:29 PM

It's just a joke. I don't really like her but your point is well made and I do hate that moronic ass in the White House. I think that we can safely say that we will all celebrate his exit. I'll buy the drinks!

Posted by: guest at September 6, 2007 2:13 PM

8:38: If you "don't want to even hear comments..." blah, blah, blah, get off this message board. You're taking it quite personally? Are you the owner? 3.7 million for ONLY 3600 square feet in a fringe nabe is crazy. You can get 5000 sq. ft or more for that dough in the more established and higher-valued neighborhoods of Bklyn. It's not about being wasteful, indulgent, etc.. it's about what you get for your money. Stop whining.

Posted by: guest at September 6, 2007 4:10 PM

well stated by 3:48 but I think demand will remain stronger than he/she thinks for prime Brooklyn RE. So, so, so many people--fairly wealthy people--are pretty much priced out of places like Cobble Hill and PS (north)...they will suck up anything they can get as price pressures mount. Especially 2 bedrooms, though maybe not the Brownstones heretofore favored by uber rich bankers and lawyers. Less-prime areas, like FG or Clinton Hill might suffer steeper declines, IMO.

FWIW, I work at a large asset manager. We're behind on our flows targets but still looking at record profits ytd, so bonuses should be fine. Our bonus pool is likely going to be bigger than last year, and last year was a blowout.

Posted by: guest at September 7, 2007 11:55 PM

OK, this is weird:

- http://corcoran.com/property/listing.aspx?Region=NYC&ListingID=746311

If you click around the site, this listing will appear in the "My Recently Viewed Properties" section at the bottom of the page. The stats given are this:

Estate on Park Block in Prime Fort Greene. This townhouse was erected in the early 1860's. In 1862 No. 53 South Elliott Place was purchased and only three owners later this rare opportunity is now available once again. A true show stopper. The correct purchaser will be thrilled to have this Italianate Townhouse steps to 14 subways, the park and minutes to Manhattan.

$1,650,000
16 Rooms
Bedrooms
Bathrooms
3,600 Sq. Ft

Posted by: guest at September 14, 2007 8:29 AM