« AIA Trying to Upzone the Downzoning? Bathroom Reno #3: Marble All Around »

November 19, 2007

What Price Vacant Land?

140clintonave1107.jpg
When you spend all day obsessing about houses and apartments, it's easy to forget about the land that they sit on. Conventional real estate wisdom, however, holds that housing itself is a depreciating asset while it's the value of the land underneath that fluctuates. There aren't a lot of single lots left for development in Clinton Hill and Fort Greene, so we were interested to see this the For Sale sign on this slightly oversized (27-by-106 feet) lot at 140 Clinton Avenue. Located north of Myrtle Avenue (and outside the Historic District), the lot is zoned R5B and thus has a relatively low FAR of 1.35. Translation: Someone can build a 3,950-square-foot structure as of right. Typically, the key metric a developer looks at in this case is the price per buildable square foot. In this case, it's $175, which seems about right given that it'll probably cost the buyer another $300 to $325 per foot to build the house itself. So at the end of the day, you've got your custom house for about $500 a foot or, in this case, about $2 million. Sound about right?
140 Clinton Avenue [Massey Knakal] GMAP




Posted by Brownstoner at 10:30 AM | Comments (19)
Categories: Development, Fort Greene

Trackback Pings

TrackBack URL for this entry:
http://www.brownstoner.com/mte/mt-tb.cgi/2949

Comments

who do I write the check to?

Posted by: guest at November 19, 2007 10:44 AM

Too bad the BQE is right up the block.

Posted by: guest at November 19, 2007 10:48 AM

every time i see that modern interpretation of a row house on brooklyn tech, half a block from the park, I think about empty lots. Screw brownstones, the people living there must feel great every time they put they key in the door.

I'm also reminded of a comment i read once: it is funny how homes are considered appreciating assets - unless they have wheels on them.

Posted by: guest at November 19, 2007 11:04 AM

I've owned an empty lot since 2003, so have tried to track values over the 3-4 years. I think $175 psf is about right for a lot in a good neighborhood. I'd say that's down from peak prices of about $200 psf. Not sure about the cost to build though.

Posted by: guest at November 19, 2007 11:22 AM

Given b'stoner's proposal, I wonder how difficult it is for an ordinary person (say a homeowner with a decent amount of equity) to get a construction loan. Seems like this is pretty close to a slam dunk for the lot owner: take out a $1m loan/credit line/whatever, hire an architect not named Scarano, build a 3 unit condo (or a spec 1 family), then sell for $2 million (or $1.8, or 2.5)...

Posted by: guest at November 19, 2007 11:44 AM

Mike, the broker, is adorable too. I bought my small warehouse on Park Avenue in Clinton Hill from him. Good luck Mikie!!!

Posted by: guest at November 19, 2007 11:44 AM

Since it is outside the historic district, I would not be optimistic. Our fabulous Boro of escalating home prices boasts some of the ugliest new residential construction in the entire region.

Posted by: guest at November 19, 2007 12:20 PM

As a coop looking for a new insurance policy for our building (four story, one family per story), we were met with the issue of value per square foot when trying to price the rebuilding of our home in case of a catastrophic event. We were told $200 per square foot was the going rate, but in your post your math concludes something more like $300-325. Anyone out there know understand the discrepency. Could one be the real replacement cost for an owner and the other be more the cost for a developer?

Posted by: guest at November 19, 2007 12:25 PM

Only construction estimators really know how to accurately cost out new construction. Even architects and engineers do not know.
Square foot costs are really smoke and mirrors because the meaning of a "square foot", which one would assume is pretty cut and dry, is actually subject to bizarre adjustments whose precise formula is only known to the high priests of the industry. Square foot means nothing in New York it is comparable to the term "middle class", it can mean almost anything and nothing. Square foot cost is an industry shorthand that is most useful for comparison purposes.

Posted by: guest at November 19, 2007 1:06 PM

$200 psf for new construction is not enough. If it was, there'd be no vacant lots left.

Posted by: guest at November 19, 2007 1:23 PM

$200 psf is the general extension to existing building cost, not new building construction.

Posted by: guest at November 19, 2007 3:00 PM

$300 to 325/sqft is incredibly high for new construction unless you are being ripped off by a GC

Posted by: guest at November 19, 2007 3:14 PM

you are idiots. $200 is just for hard costs. Soft costs are going to add up bringing the number to $300/$325. $200 for Hard is even a bit low considering the current costs of materials.

Posted by: guest at November 19, 2007 3:39 PM

Chubb estimated the replacement cost of our house to be almost $500 a foot, but that's to recreate what's there (moldings, parquet. etc.) We got the $325 number from an architect who's built houses of this size from the ground up in Brooklyn.

Posted by: brownstoner at November 19, 2007 3:49 PM

"...$2 million. Sound about right?"

Cough...cough! Excuse me! I just visited the site and realized how close it is to the BQE. So, that would be a 'no'.

Posted by: guest at November 19, 2007 6:24 PM

Brownstoner, are you really just the mastermind of a plot to fan the flames of this crazy market? I'm amazed by your cavalier remarks about how $2mil for a townhouse so close to the BQE is "about right" - as a CH owner yourself, you clearly have a vested interest in this, and frankly, you are supported by ads from brokers. I'm really starting to question the conflict of interest! The market is overpriced right now, period, and blithely stating that prices are rational seems irresponsible now, as if talking up some new start-up just before the tech bubble exploded years ago.

Posted by: guest at November 19, 2007 9:29 PM

Lots trade in the Slope at $275 per bsf...when you can find them...this is a very recent data point...probably not yet in the databases just yet...but take my word on it.

Posted by: guest at November 19, 2007 9:43 PM

Hey, what about that sign? Think it is BIG ENOUGH???? Massey Knakal likes BIG SIGNS. It is the broker for a building for sale next door to me and I couldn't believe the size of the sign. I came home from a trip and it was hanging perpendicular to the house on an arm 5 feet long, letters one foot high, sign 4 feet square. I didn't even get a chance to complain -- my neighbors called 311, Landmarks, etc. I just called the broker and told him that he was sparking an uprising (not so good for building relationships).

Posted by: donatella at November 19, 2007 11:06 PM

Seems to me that if we taxed ourselves differently .. taxing that which we, as individuals do not create -- the land value -- and untaxing that which we create individually -- the house itelf (and, for that matter, our wages), we'd be better off.

That land would not be sitting vacant right now. A land speculator would not be asking a high price for value he had nothing to do with creating.

One more family would have a home.

One vacant lot would have disappeared. (Probably many.)

And value we all create would be used to finance the services that make the neighborhood a good place to live. That revenue would be recycled locally, over and over and over, instead of accruing into private pockets.

Take a look at http://www.henrygeorge.org/cgnyc/index.html

Posted by: LVTfan at November 23, 2008 6:59 PM

Post a comment

Please be patient while your comment is published. It may take a moment.

Latest Restaurant Additions