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October 22, 2008

House of the Day: 532 3rd Street

This limestone house at 532 3rd Street in Park Slope was an Open House Pick back in March 2007 when it was listed for $2,600,000; it quickly went into contract at the asking price. Now the 18-foot-wide single-family is back on the market for $3,200,000. It's hard to see pulling off a 20% mark-up from a year and a half ago, given that there's only been bad news for the market since then. Whatever. Nice house, though.
532 3rd Street [Corcoran] GMAP P*Shark
Open House Picks 3/17/08 [Brownstoner]

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Comments

gotta love the limestones

Posted by: dittoburg at October 22, 2008 1:30 PM

Laid off by Lehman?

Posted by: SnarkSlope at October 22, 2008 1:38 PM

Beautiful place, but it does seem like kind of the wrong time to be tacking six hundred grand onto the price.

This is the only city in America where you can drop three million on a house and still have to deal with radiators and a lack of central AC. :)

Posted by: cwbuecheler at October 22, 2008 1:38 PM

It's 3rd St. 2.6 was a deal. It'll fly for 3.2.

Posted by: DOW8000SP800 at October 22, 2008 1:49 PM

That's an easy one to answer Mr. B. Brown Harris Stevens had the listing back then and now the Corcoran superheros have it!!!!

Posted by: daveinbedstuy at October 22, 2008 1:51 PM

Is there any indication that the Hawaiian tropic girl bar opening up next to Lehman Brother's office had anything to do with Lehman's collapse and the subsequent stock market cataclysm?

Posted by: dittoburg at October 22, 2008 1:52 PM

A real girly bar ditto? The closest one was always Flashdancers.

Posted by: daveinbedstuy at October 22, 2008 2:02 PM

Orange sofa, mirrored tables, shag carpet...Yeah, baby!!!

Posted by: bayridgegirl at October 22, 2008 2:06 PM

New York market slated to be among first to bounce back, report says.

The economic downturn will drag down the real estate market, but New York City, along with other 24-hour coastal cities like Seattle, L.A., Boston, San Francisco, and D.C., will be among the first to recover, beginning in 2010, according to the Emerging Trends in Real Estate 2009 report released today by PricewaterhouseCoopers and the Urban Land Institute. The report predicts that among most property types throughout the country, vacancies will rise and rents decrease in 2009, and lending problems will spread from the residential to the commercial markets. Of the various property types, the report predicts that only the apartment rental market will remain strong, as people who are unable to purchase homes will continue to rent, and industrial, business, hotel and retail markets will take a beating. TRD

Posted by: 11217 at October 22, 2008 2:06 PM

Dave - it opened up across the street - literally (49th street)

Posted by: dittoburg at October 22, 2008 2:14 PM

"New York market slated to be among first to bounce back, report says."

Would you like to buy the Brooklyn Bridge from me?

Posted by: DOW8000SP800 at October 22, 2008 2:18 PM

Its mind boggling to me that somebody would buy a 2.6 million dollar house and then try to sell it 18 months later. Who buys something that expensive with the intention of selling so quickly?

Posted by: wasder at October 22, 2008 2:25 PM

I only posted that article, because I was always under the impression that the New York market would be the last to come back, since it seems to be the last one to suffer...

Posted by: 11217 at October 22, 2008 2:25 PM

DOW800 - I'm having trouble telling if you're facetious when you say this will fly now at 3.2? From the photos, it certainly looks like a nice house, though I find it odd that there are no photos of kitchens/baths. And I also find the huge mark-up to be puzzling to say the least given market conditions. Maybe they're just praying lack of inventory will drive this but I can't believe the potential buyer would not want to negotiate the price significantly downward. After all, there are other houses on 3rd Street that have recently been or are still on the market for less than 2.5. See http://realestate.nytimes.com/sales/detail/25-NYBA81BE/PARK-NY-11215
This 4-story house on same block (which I believe is 20' wide) is in very good condition and at 2.35, has not yet moved...

Posted by: Miss Muffett at October 22, 2008 2:25 PM

11217 - last time NYC hit a real estate slump (in late 80's, early 90s) it took many years to recover and this time, we're uncharted territory in terms of the economy. I'm not saying it's impossible that the dip could be short, but I also think no one really knows, and it's equally plausible (indeed, many say it's much more plausible) that this downturn could last even longer. Hence, sellers who are "waiting out the storm" could be in for a nasty surprise since they may find that their property values go down for a much longer time than they are currently expecting.

Posted by: Miss Muffett at October 22, 2008 2:28 PM

Wasder - who buys something so expensive and then turns around and sells so quickly? Someone with a mortgage they can no longer afford. I know plenty of people at risk of being in this situation, who are all watching the market nervously and praying their jobs are safe so they can pay the huge mortgages they took out during the boom.

Posted by: Miss Muffett at October 22, 2008 2:32 PM

This is pretty beautiful, though no comment on the price. I appreciate the look of the painted wood and modern furniture, but if it were mine, I'd strip it all.

Posted by: Susan Elkins at October 22, 2008 2:39 PM

Miss Muffett---do you really think that somebody took out a 2.3 million dollar mortgage (or so) on this house? I mean if they did then your scenario makes sense--the mortgage payments would be astronomical. It is my assumption (which of course could be incorrect) that most properties at this price level are purchased by people with the means to own them outright.

Posted by: wasder at October 22, 2008 2:40 PM

"Who buys something that expensive with the intention of selling so quickly?"

Oh come on, wasder. Greed has no bounds. It discriminates no number.

Posted by: DOW8000SP800 at October 22, 2008 2:42 PM

DOW--you think it was flip? That seems unlikely but I guess possible.

Posted by: wasder at October 22, 2008 2:45 PM

Is your comp limestone, Miss Muffet (no photos in the link)? 3rd St is very synogoguey. I just see someone, some wealthy family, likening such a purchase to buying a Bently. Who cares what it's REALLY worth. This is an exceptional brownstone on an exceptional block. The rule is that all comps will be affected but I say this one goes near ask.

Posted by: DOW8000SP800 at October 22, 2008 2:49 PM

Wasder - No, I don't think a typical buyer for this kind of house puts so little down, but I do think it's possible that they may have put, say 30% down (or 780K, not an insignificant sum), which still leaves them with a mortgage of 1,820,000. Or even if they put down a million, and had a mortgage of 1.6mil, that could be tough to keep making payments on if there is some income hit, and I've certainly seen a few high-earners take income hits of late. Stretching to buy a house seems like a great idea when you have income security, but it can get scary when you find yourself laid off and unfortunately, I've seen this among people I know.

Posted by: Miss Muffett at October 22, 2008 2:50 PM

Recover from what, -5 percent? Prices have to fall in order to recover. Remember, this was a once in a lifetime boom/bust. A real recovery will happen after you die of old age and the new generation forgets all about The Greater Depression.

Posted by: DOW8000SP800 at October 22, 2008 2:52 PM

"most properties at this price level are purchased by people with the means to own them outright"

Or major cash down like 50% or better. UWS sellers.

Posted by: DOW8000SP800 at October 22, 2008 2:54 PM

Miss Muffet is right. Anybody in any 'hood could be underwater. Examples abound: Hamptons, Ed McMahon, etc.

Posted by: DOW8000SP800 at October 22, 2008 2:55 PM

Dow, I'm confused by your posts today since they seem both bearish and bullish at the same time. Anyway, this house is nice, and I realize the link I provided (previous versions of the post had photos, not sure why they're not there now) is not an exact comp, but I'm just pointing out that a number of houses on 3rd Street, between 6th and the Park have been on the market recently and/or sold for MUCH less than this house. This house is nice, but I just don't know if it's THAT much nicer than houses that are basically the same size (if not larger), in same location, and in a condition that is probably almost as good albeit perhaps with not as much fancy plasterwork. Plus, the pool of buyers in this climate has shrunk greatly.

Posted by: Miss Muffett at October 22, 2008 2:57 PM

Wasder:

Mortgages are public record. Just check on ACRIS. These turkeys took out a 90% loan on their house.

The mortgage appears to be in the name of two people at 200 Park Avenue in Manhattan, so hopefully they are professional flippers and not fools who bought their primary home with 90% financing.

Posted by: Polemicist at October 22, 2008 2:57 PM

Also, I've always thought these houses looked more like they were constructed as 3-family buildings rather than single family homes. No stoop, no easy access to the basement where presumably the kitchen and slave's quarters were kept.

Posted by: Polemicist at October 22, 2008 2:59 PM

According to Property Shark, the owner took out a mortgage in the amount of $2,340,000 for a purchase price of $2,600,000. So that makes for a hefty monthly outlay!

I agree this is a prime location, and the layout of the house is fine, but it's not comparable to many of the other houses on that block of Third Street, or one block further up between 8th Avenue and PPW: all of the lovely woodwork has been painted over; heat is via radiators; no central air; the English basement is unfinished; and with no pictures of the kitchen and bathrooms, it's possible they're sub-par. The back gardens in those houses are also very small.

My guess is that the asking price was set at a level so that, with the inevitable mark-downs, the owners can hopefully at least break even. No reason to sell now unless they have to, so I wish them luck. This should be a good barometer of what can happen in this market to folks that have to sell for job-related or other financial reasons.

Posted by: Park Sloper at October 22, 2008 3:06 PM

Poley - do you mean servan't quarters?

Posted by: dittoburg at October 22, 2008 3:19 PM

Miss Muffet - since you have laid out your comfortable situation many times on this blog (sold at peak, currently waiting to buy house you like when prices seem appropriate), your constant reiteration of the negative direction of the market is starting to me to sound a lot like crowing - in spite of your polite tone and in spite of the fact that I agree with your assessment.

Posted by: gkw at October 22, 2008 3:27 PM

gkw - actually, I've also said that no one really know where the market is headed other than it does not seem to be headed up. But how far down and for how long is anyone's guess. I've also pointed out that "crowing" (if by that you mean I hope to have an impact on the market) is useless - the market will do what it will do regardless of any one opinion. This is a blog about real estate so I'm just putting in my comments like anyone else i.e. pointing out comps. And "comfortable" is relative - we're actually in a very modest rental right now (more modest than I would like since it's very small and we have kids) precisely because we are nervous about the economy and don't take things for granted.

Anyway, I do suspect after reading more about this house that the sellers are factoring a significant difference between ask and close, so at the very least they can recoup what must have been significant costs just to buy/own this for 18 months.

Posted by: Miss Muffett at October 22, 2008 3:35 PM

Crowing is unseemly, but it's fair to point out how rosy some people think the situation is right now; only yesterday or the day before, someone was twitting (stupidly) DOW 8000 for his handle, as if he'd have to revise it upward now the stock market was rebounding. People who have never been around rich people imagine some lofty world where suffering hardship is letting one servant go and eating less frequently at Daniel and Per Se. Those people do not live in Brooklyn; they will be hunkering down in a tiny oasis of affluence called the Upper East Side, while regular rich folk --who do in fact buy houses with debt --see their equity, such as it, collapse. A LOT of this population of quasi-rich did in fact buy in Brooklyn, and carry heavy mortgages. The conventional wisdom calls for a slow leak; I see an '09 implosion. I'm only talking my book. Guess what --we all are. Let's see who is right.

Posted by: Whuh at October 22, 2008 3:44 PM

You all need to come back down to earth a little bit here.

EVEN if they sell and make a 100K profit, that's not a bad investment for 18 months. Certainly a lot better than most other investments these days.

Please realize that 600K is a HUGE amount of money. I was hoping this crisis would teach some of you that, but apparently some of you are still talking about 600K as if it's loose change.

Posted by: 11217 at October 22, 2008 3:46 PM

I think it was Sebb who was mocking DOW8000's handle yesterday (not sure what he would say today) and I agree with Whuh that there are some on this blog who simply cannot accept that the market could ever stall, much less reverse course. I've always pointed out that we are not waiting for a "bottom" and we continue to actively look every day - and would buy something tomorrow if it was affordable and met our (rather modest) criteria. But I am incredulous when I see listings like this HOTD that seem a tone-dear continuation of a market that was unsustainable, and is finally showing itself to be so. The bigger issues that might be at hand that could lead to an implosion are actually pretty scary, so I hope for all our sakes that we don't experience an all-out crash, though a correction would be hopefully a lot gentler.

Posted by: Miss Muffett at October 22, 2008 3:50 PM

No I don't mean that you hope to have an effect the market - just that since we all know it is in your interest for prices to come down, your daily, more or less repetitive remarks about where the market is headed - in which you strive to sound disinterested and sober minded - are starting to wear a bit thin.

Not that Sebb's delusions are any better.

And I suppose since there were so many owners on here gloating about the rise in their home values while the market was on the up and up, there's bound to be people gloating (in the most polite possible way) about the fall.

Posted by: gkw at October 22, 2008 3:51 PM

I want to just say that I am among the most pessimistic of the pessimists - and became one the second the first iterations of the subprime mortgage hit back in aug, 2007 - probably because I saw my own family's (very modest) fortune fall here in nyc with the last real estate crash in the 80s. I fully expect my own house to half in value before this is all through.

Posted by: gkw at October 22, 2008 3:56 PM

Sebb is awfully quiet today now that the DOW is diving back towards 8000.

Posted by: SnarkSlope at October 22, 2008 3:58 PM

Whuh - are you crazy? People go to the UES to die. They never go out anywhere. Its the UWS inhabitants that go our to Per Se.

Posted by: dittoburg at October 22, 2008 3:59 PM

Well gkw, what can I say? I know I'm obsessed with this topic (since we really want to finally install our family in a bit more space!) so I know I sometimes post a lot and if I repeat myself, well, I'm not the only one on this list to do so, and as has been said before, folks are free not to read the posts!

Posted by: Miss Muffett at October 22, 2008 3:59 PM

I thought the UWS inhabitants all sold their 2 bedrooms for 2million dollars and made a beeline to Bklyn to buy their townhouses.

Posted by: Miss Muffett at October 22, 2008 4:07 PM

I'm dating myself by saying UES, it's true. But it may only be the most fossilized fortunes that survive this. I think it's that bad. Some nutty eighty-eight year old coupon-clipper on Upper Fifth will be the last man with disposable income in America.

Posted by: Whuh at October 22, 2008 4:13 PM

ugh whuh - say it isn't so.

Posted by: gkw at October 22, 2008 4:16 PM

For those economists out there, when do you think NYC will feel this? I'm not just talking about real estate, but jobs, restaurants, the whole enchilada. Right now, it feels as if everyone is *talking* about the crisis, and yes, I do know quite a few people who've been laid off (but thus far, they're all in financial sector) but housing prices are still sky high and when I walk around the streets, local businesses/restaurants seem to be busy. I was a bit too young in the late 80s to register the impact of the Oct 87 Black Monday, and I do remember the early 90s as being a pretty moribund time, but I'm not even sure if those past examples are really relevant this time. I know the answer may be: no one knows, but some on this blog are forecasting big problems in 2009 and I'm just wondering how that timeline is calculated, or is it just inevitable that things will have to hit the fan here pretty soon?

Posted by: Miss Muffett at October 22, 2008 4:18 PM

Wow--now that I see the mortgage information it changes my tune completely. I am amazed that somebody would take out 90% financing on something with such a large pricetag. The monthly payments on that nut would be upwards of 10G per month which is a stunning amount no matter how much you earn.

Not trying to sound flippant about somebody else's situation but that seems like shaky judgement no matter what.

Posted by: wasder at October 22, 2008 4:21 PM

"only yesterday or the day before, someone was twitting (stupidly) DOW 8000 for his handle"

I responded too. Check it out. It's the Biggest Sales tread.

Posted by: DOW8000SP800 at October 22, 2008 4:36 PM

MM, I was thru the post-87 Re slowdown, but I was also thru the bigger one in 1974/75. Altho I was just 19-20 for that one. 74/75, there were empty office buildings. SoHo was born as manufacturing was destroyed and left the city completely. Downtown stayed pretty empty for years.

At the time I was working in a supermarket, on my way up, so I personally was very positive. I was in a D'Agostinos serving the wealthiest of the wealthy, the Park Ave and 5th Avenue crowd. I remember people with Park Avenue addresses who bounced checks. I remember getting past doormen to try and collect those checks, and seeing gorgeous apartments, the likes of which I had never imagined. I remember some of them saying they had no money to make good on a $50 check.

I remember some extremely well dressed and well addressed women returning things and getting in my face about how they had gotten poor, so they had to do it.

I also met and dated a very lovely young daughter of some customers who were well off but not wealthy, and I met some of her friends that were wealthy. I remember another magnificent Park Ave duplex in which one of these friends told me that the amazing kitchen I was looking at was going to get some use, because her parents, who formerly ate out seven days a week, were now going to eat in a few days.

I don't believe things will get that bad again, but they could. Certainly the stock market is just about as bad as that bear market right now. Nevertheless there is a lot of foreign money around which there wasn't then, and more people want to come here. There are also way more tourist dollars. I won't argue that the economy today is more diverse, because with the destruction of manufacturing, it is not.

So, while I see a 10-20% correction in RE prices, at the same time I remain bullish, as always, about the long term prospects for Manhattan real estate and Brownstone Brooklyn. Anyone who bought in the near-depression markets of 1974-75, or the down markets of the late eighties/early nineties, has been richly rewarded.

Posted by: denton at October 22, 2008 4:48 PM

wasder - i agree that 10k a month is an insane amount of money for a mortgage. but i used to work with people that were bringing home 30k a month in income - they made about 500k a year and had humungous bonuses! i did not work directly with these people but i worked in a capacity that i saw their actual after tax income - so this is not word of mouth! many of them had huge mortgages and worked in investment banking. they were not trust fund or born rich - they had high paying jobs. if they lost their job, they would definetly need to sell. prob the case here. who knows. but 2-3k for a brownstone i would not consider those buyers the all cash wealthy folks.

Posted by: bkny at October 22, 2008 4:51 PM

I actually saw the house when it was first listed in 2007. Nice house, but really a 3-story (basement is probably 6 feet high only) with a width of around 18 feet. Contract was signed in a week or so at the time.

Posted by: Nilso at October 22, 2008 5:46 PM

Nilso

That was point. I swear, I don't think this building was originally constructed a single family home.

Denton:

A very interesting story.

Posted by: Polemicist at October 22, 2008 6:27 PM

bkny: Also very interesting.

Posted by: mopar at October 23, 2008 1:36 PM