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July 30, 2008

Condo of the Day: Resale at The Washington

After a rocky couple of years of Scarano-related delays, first-round buyers at The Washington Condo at 35 Underhill Avenue in Prospect Heights were able to close and move in last year. Now we're starting to see the first resales in the building. One owner has just put his 1,474-square-foot second-floor apartment on the market for $799,000, an increase of $100,000 over what he paid for it in early 2007. That doesn't seem unreasonable to us.
35 Underhill Avenue, #A2E [FSBO] GMAP P*Shark

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Not unreasonable? I'd go as far as to say that it's a good deal. That's a lot of space and that neighborhood is only going to get better.

Posted by: Fast Freddy at July 30, 2008 12:57 PM

What's the deal Brownstoner??!!??!! Monday you show us a condo in CROWN HEIGHTS for 825,000 with monthly fees of 850 and claim it is a "steal." Today you list a condo that sold for 100,000 less last year and you think that's reasonable. This is the 2008 BUYERS market, by what terms should these folks make 100,000 from last year to this?

BTW, this apartment has been on the market for a while now, first listed with Corcoran for about 75,000 more!

Posted by: househunt at July 30, 2008 1:02 PM

I don't get it.

I thought the beginning of 2007 was still real estate boom time. And I thought that now was difficult at best for sellers selling, and for buyers attempting to get mortgages.

And for what reason would this apartment increase by that amount in just over a year? Did the owners renovate a brand new apartment?

Can someone elucidate?

Posted by: Nokilissa at July 30, 2008 1:07 PM

When did we call the Crown Heights place a steal? We said that we were bullish on Eastern Parkway in general, which we are. We also think this area on the Prospect Hts/Crown Hts border has lots of potential long-term.

Posted by: brownstoner at July 30, 2008 1:09 PM

Maybe they spent 100K fixing up the Scarano "loft" floor and are charging back the new buyer.

I looked at one of those last year. Decent building, fine area, price was right. Then they tried to sell me a "loft" with a 3 foot ceiling.

Fail.

Posted by: Prodigal_Son at July 30, 2008 1:13 PM

lol, prodigal son. this doesn't look like one of the mezzanine apartments.

Posted by: brownstoner at July 30, 2008 1:15 PM

I would think in this market that the seller should be lucky to recoup closing costs. These apartments have been on the market for a while. The location is less than ideal with a good trek to the subway and limited restuarants, etc. Also the apartments are not so appealing, very cookie cutter. I think these will continue to sit on the market while demand dwindles and supply keeps increasing.

Posted by: ks8000 at July 30, 2008 1:22 PM

only 2 blocks to the C at Washigton and Fulton

Posted by: This Aint No Disco at July 30, 2008 1:26 PM

Over 10% appreciation in one year in a non-prime area is considered reasonable in the worst national housing crash since the Great Depression?

Posted by: 11217 at July 30, 2008 1:36 PM

Good closet space, highish ceilings, but no outdoor space (except for the shared "zen-inspired garden" which is embarrassingly bad). No parking space. There's so much new construction around this area, lots of competition. I think the price will have to drop a little bit more, considering the state of the market right now.

Posted by: y00phemism at July 30, 2008 1:40 PM

Thank you ks8000 and 11217! My point precisely.

Posted by: Nokilissa at July 30, 2008 1:44 PM

As this ain't no disco said, the Clinton/Washington C train is quite close (2 blocks) to this apt. If I was seller I would emphasize proximity to Clinton Hill and Fort Greene as opposed to trying to make it sound like it is anywhere near Prospect Park, which is a big uphill schlep from there....

Posted by: wasder at July 30, 2008 1:45 PM

This is bubble pricing. I guess someone might be foolish enough to pay it. Two years from now it will be impossible to resell this unit for the current asking price.

Posted by: lechacal at July 30, 2008 2:00 PM

"This is bubble pricing. I guess someone might be foolish enough to pay it. Two years from now it will be impossible to resell this unit for the current asking price."

You mean..

"This is bubble pricing. I guess someone might be foolish enough to pay it. Two years from now it will be impossible to resell this unit for anything."

BTW Fucktards, The Chimp in charge sign the Asshat Foreclosure Rescue Bill! This should bring on the crash right well...

The What

Someday this war is gonna end...

Posted by: what at July 30, 2008 2:06 PM

What--your english is going way downhill. I think I understand what you are trying to say. Anybody buying a property like this and thinking that they are going to sell at a profit in a few years is certainly an idiot. If however you buy something like this with a view to raising a family there and owning it for a long time the monthly nut is not too insane due to the low monthly costs. So own this for a decade or two and you should be fine.

Posted by: wasder at July 30, 2008 2:11 PM

wasder I thought you buy a house to raise a family not a Condo. You what to talk about the future? Ok Asshat here we go! Do you think we are going to have negative interest rates forever?! You you think foreigners will continue to finance out lifestyle? Did you think the Taxpayer is going to let Wall Street pass the loses onto them? Do you think Atlantic yards will get built? The Governor said that NYS will have shortfall of 26 billion over 3 years and the Mayor has said 2009 budget will be bad. Keep smoking the crack pipe with your bud Brownstoner! Maybe you can "cop" together on Grand and Putnam...

The What

Someday this war is gonna end...

Posted by: what at July 30, 2008 2:21 PM

Wasder - at current rates the monthly check is in the neighborhood of $4700 (less after tax, but marginal tax rates for someone in this place probably aren't too high). That's nothing to sneeze at. And of course add to that the private school tuition (feel free to correct me, but I don't think most parents are very comfortable with the schools over there). Add to that:

- the opportunity cost of the down payment
- not many buyers last more than 5 years before their next move
- VERY real risk of capital loss upon sale

and you have almost no reason to buy at the asking price. What's that place worth in pre-bubble dollars, maybe $500,000 if they're lucky? I know I am beating a pretty old drum here, but people seem to have completely lost sight of what realistic long-term values are for New York real estate. The PS/PH markets bears all of the classic signs of a bubble, including a genuine belief among the residents that the price increases of the last few years are going to stick. I think a lot of people who bought in the past few years are going to be in for a lot of pain. We just saw this play out in the past few years in other real estate markets, and now it is starting here. The collective failure to believe it is happening, or to believe this market is different, is the same thing we saw in so many other markets.

Posted by: lechacal at July 30, 2008 2:30 PM

For the record, it distresses me deeply that other participants in this board may view me as being on the same side as What.

Posted by: lechacal at July 30, 2008 2:32 PM

the spaces are 'unique' but the quality of construction is mediocre. also, this can be a noisy stretch of washington....

if i was looking in this area i would offer low-to mid 6.

or consider the hello condos instead - somewhat comparable but with better amenities and quality of design/construction

Posted by: bk_bobb at July 30, 2008 2:53 PM

Lechacal,

While I partially agree with you, I think you are severely overstating things.

First of all, the median housing price in the U.S. has dropped 15% so far in the past year, much of this being concentrated and dragged down by places like Los Angeles, Miami, Las Vegas and Phoenix, each approaching declines of 30%. Some areas are showing signs that they might rebound (Boston saw a 1% increase, Denver as well showed a slight increase). They expect that by the end of 2009, perhaps as late as 2010, prices nationwide will begin to rebound on the whole.

In any case, total house price depreciation country-wide will probably fall into the 20%-25% category, with many areas faring much better and some faring worse. I expect NYC housing prices will drop 10-15%, with most of those declines in the less than prime areas. Inventory (which is still so low right now, it's almost weird) along with the huge drop in building permits and the large number of co-ops (70% of owner stock) will all help us here.

Keep in mind that New York City is the 22nd most expensive city in the world. To suggest that housing price increases are finished for the next two decades is a bit melodramatic, in my opinion.

I think in 5 years, we will once again be on an upward cycle, hopefully more in line with the typical 5% or so gains a year.

Posted by: 11217 at July 30, 2008 3:22 PM

What---you could buy a house or a condo to raise a family. This one is three bedrooms and two baths, enough to have two kids in. I personally am buying a two family house in Clinton Hill, with enough rental income to make it affordable to me, but this is not an insane place to raise a family. While some of your predictions of doom and gloom are probably going to come true (I wouldn't bet on AY ever getting built for instance) your rantings should not dissuade a reasonable person from the prospect of LONG TERM house ownership. I am aware of the fact that the house I just signed a contract on will be worth less, even possibly substantially less, in the near term. I am counting on it. But I feel confident that when I sell the house in 2030 or whatever I will have done alright by myself financially and will have enjoyed raising my children in a beautiful home in a wonderful neighborhood. I am sorry that the prospect of people living enjoyable lives is so anathema to you but that is what makes you a FUCKTARD to borrow your charming lexicon.

Lechacal--I don't think you are on the same side as the What but I do think you are operating on some dubious assumptions. For instance, it would be foolish to assume that people who might buy this condo wouldn't send their kids to the local schools. While I don't know which schools this area is zoned for, I do know that there are several public schools in this area (PS 11 for instance), that are improving by leaps and bounds every year. You are no doubt correct that people expecting price increases to continue are in for a shock, but that doesn't mean that this condo isn't a reasonable investment for some buyers. I personally would rather have a house but still this is a large apt. And I think you are naive to suggest that this condo is only worth 500,000 tops. there hasn't been a time where three bedroom/two bath condos went for that in a very long time (since before the bubble certainly) so where you are getting that number is beyond me. Anyway, I don't mean to be harsh, and I am sure you are a reasonable person but some of the assumptions you are operating under seem to be misguided.

Posted by: wasder at July 30, 2008 3:23 PM

Wasder - the $500k number I threw out there was very much based on location. This place is pretty deep into Prospect Heights. I bet $500k would have bought you an awful lot of apartment there just a few years ago. That being said, I wasn't particularly familliar with PH real estate a few years ago.

11217 -- All fair points. Only time will tell. My personal view is that the slump is not yet over in other markets and that it has just barely begun in Manhattan and PS/PH/CG/etc. And of course bear in mind that asking prices are in many instances *above* selling prices at the top of the local bubble (after going up so far so fast, why not keep reaching for the stars, right?). So for prices to drop, say, 20% from top-of-the-local-bubble levels an apartment with a $1,000,000 current *asking* price might actually have a resale value of less than $800,000 at the bottom of this cycle.

I've been saving my duckets for a few years waiting to buy. Now I'm finally in a position to comfortably do so, but I've decided to rent for at least one more year (maybe two) while things shake out. Maybe it ends up being a bad decision in hindsight. For now I'm pretty comfortable with my bet.

Posted by: lechacal at July 30, 2008 3:47 PM

But Lechacal, this is what I said earlier in this thread. Deep in Prospect Heights is just another way of saying right next to Clinton Hill, the neighborhood in which I live and think is awesome. So to me, a three bedroom/two bath condo two blocks from the Clinton/Washington C stop is not a bad place or a bad location. If you are thinking about it in terms of proximity to Prospect Park then of course this location sucks. Just depends on how you look at it.

Posted by: wasder at July 30, 2008 3:56 PM

Sure, but what would $500k have bought you there in 2003 or 2004? I lived in Fort Greene in 2001-2002, before prices there exploded. Not the same thing as being across Atlantic from Clinton Hill, but $500k would have bought a heck of a lot of apartment back then (all the way back in the early part of this decade - which is really not very long ago at all).

The original point I was trying to make was that this place would have been worth $500k at best a few years ago. Probably impossible to know for sure because I dont think there was new construction there a few years ago, but I don't think I was far from the mark.

Posted by: lechacal at July 30, 2008 4:03 PM

This place is a very short walk to the Flea...that's a plus in my book!

Posted by: 11217 at July 30, 2008 4:06 PM

Fair enough. I have no idea what 500k would have bought in that location in 2003/04 so why argue about it. FWIW, I think you are making a good bet holding off buying for another year or two. If my wife were not pregnant with our second child I might join you in your wisdom but alas life deals you the cards and you play them the best you can. I have found a house that makes financial sense to my family and is in the neighborhood we want to be in so even if it declines in value over the next few years we are not in over our heads and the market will presumably bounce back at some point. Sorry if I sounded like a dick.

Posted by: wasder at July 30, 2008 4:08 PM

No worries - you didn't sounds like a dick, you were just making a point.

Posted by: lechacal at July 30, 2008 4:13 PM

"Deep in prospect heights." what does that even mean? East? North? South? "Deep" as in a 15-minute walk (for a slow walker) to the central Park Slope?

lechacal has NEVER been to Prospect Heights. I guarantee that.

Posted by: Fjorder at July 30, 2008 4:18 PM

i looked at the building back in 2005/06 and actually liked the layout and construction and psf pricing. in the end, decided that there's still too much of the hood around, and didn't want to live through AY construction. also, wasn't a fan of sending the kiddie to school there.

do agree that many have and will continue to raise their children in apts. my place now is 2000 sq ft with a yard, so how is that different from a brownstone with rentals? it isn't.

Posted by: wine lover at July 30, 2008 4:19 PM

Fjorder - deep from the approach that matters to me (and I think generally to others), i.e., from Flatbush, GAP, the park, Atlantic Terminal. I don't know why you would say I have never been to Prospect Heights, which simply isn't at all accurate.

Posted by: lechacal at July 30, 2008 4:25 PM

roger that lechacal...then i understand. I've been really liking those Hello! Condos but it's a haul to anything in that northeast corner of PH.

and from what i hear re: schools— PS 9 has also improved by leaps and bounds over the last couple of years.

Posted by: Fjorder at July 30, 2008 4:29 PM

The point is, still, this is not 2007. I have been looking for the right place for what seems like forever and I can honestly say prices are coming down from 2007, not going up more or less. There are a few exceptions to this for a particularly good apartment (layout, schools, convenience, etc.) but if the place is nothing too unique or has more than one or two trade-offs the prices are coming down. So, this apartment will likely not go for much more than the owner paid for it. Sad for them, but could be worse. As for it being near the a train, true, but the A train is not exactly the best line right?

Posted by: ks8000 at July 30, 2008 4:46 PM

Wine lover,

Just to correct some points:
AY is closer to to some areas in PS than this site.

PS9 is a great school. We had the option to send our kid to a number of citywide gifted and talented schools, but we decided to keep her at PS9.

Washington still has away to go (unless you need a flat fixed).

Posted by: quig at July 30, 2008 4:53 PM

AY will be a huge hassle to live through or near if you are in a 6 block vicinity.

if there's a g&t program, fine, but still think that much of the area is not too great. (have lived in prospect heights before).

Posted by: wine lover at July 30, 2008 5:30 PM

11217

A lot of your facts are wrong, and your predictions are baseless

Housing prices declined 15% in May alone

http://biz.yahoo.com/ap/080729/home_prices.html?.v=10

We also have a massive decline in Wall Street revenue as the governor described last night.

I have a very reliable source that is going to be publishing a report soon that indicates Manhattan prices have actually declined 8% in just the past few months.

A 10% decline at this point would be a godsend.

At this point, there is simply no reliable data from which an informed opinion can be made.

Prudence is warranted.

Posted by: Polemicist at July 30, 2008 6:32 PM

Polemicist,

One of us is reading this info the wrong way...

This sentence from your article...

"The Standard & Poor's/Case-Shiller 20-city index dropped by 15.8 percent in May compared with a year ago."

That to me means a 15.8% drop, year over year. Not in one month. No?

This sentence also sounds like you have things mixed up...

"Home values have fallen 18.4 percent since the 20-city index's peak in July 2006."

And then this sentence is not all bad news..

"But a possible bright spot in an otherwise dismal report, seven metros -- Tampa, Fla., Boston, Detroit, Minneapolis, New York, Dallas and Atlanta -- showed smaller annual declines."

Am I reading this wrong???

Posted by: 11217 at July 30, 2008 7:16 PM

Ok, yeah...I thought you had it incorrect:

This is from the NYTIMES/July 30, 2008

****according to the Standard & Poor’s/Case-Shiller index, a widely watched survey that measures prices in 20 major metropolitan areas. Prices were down 15.8 percent from May 2007, including a 0.9 percent one-month drop this May.

http://www.nytimes.com/2008/07/30/business/economy/30econ.html?hp

You aren't as smart as you think you are.

Posted by: 11217 at July 30, 2008 7:26 PM

apples, oranges, 300 blocks north and a co-op board, but for this, you could get a reaaallly nice apartment in Castle Village.

Posted by: Heather at July 30, 2008 8:56 PM

I don't think anyone's pointed this out yet, but in what universe is this 1,474 sq.ft.?

Posted by: heck_of_a_job_brownie at July 31, 2008 9:33 AM

we actually went to see this place last weekend and it *is* really a beautiful place. Its humongous and the layout moves around sort of like a classic 6. (Its NOT but..) the layout is really great and probably not far off what I would pay for something like that if I had the do re me. Its definitely a good large family apartment.
The owner told us about the issues with the construction in the 'attic' apts, which we also looked at that day.
I wouldn't buy in that building because of the "sketch factor" of the construction. It was too much work for me to even think about all the issues they were having, which they claimed to be fixing but who knows what didn't get fixed.

Posted by: landry at July 31, 2008 12:48 PM

runrunrun away

The offered potential of the apartments on the mezzanine level will not be welcomed by the Department of Buildings. Check their homepage and the section complaints.

... and then, RUN

Posted by: unna at August 2, 2008 6:00 PM

« Wednesday Food & Drink Round-Up House of the Day: 31 Prospect Park West Revisited »

July 30, 2008

Condo of the Day: Resale at The Washington

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