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October 6, 2008
Price Cuts at Be@Schermerhorn
Well, that didn't take long. Sales at Be@Schermerhorn began one month ago, and 33 of their 34 active listings just had their prices cut. Penthouse B, a 965-square-foot two-bedroom, cut $30,000 from the price tag, to $1.02 million. The least expensive unit, studio #9J, got a $20,000 cut, to $325,000. One unit, however, just got pricier. Penthouse A, 937 square feet and two-bedrooms, increased by $30,000, to $1.125 million. Will this get sales moving, or is the building doomed to be a victim of bad timing?
Inside Be@Schermerhorn [Brownstoner] GMAP
Be@Schermerhorn Hits the Market [Brownstoner]
Be@Schermerhorn Website Fleshed Out, Still No Pricing [Brownstoner]
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Comments
I don't think it is bad timing alone. I think this building is a victim of lack of space. A 965 square foot two bedroom. That is kind of small for a Penthouse. That is kind of small for a 2 bedroom period.
Posted by: PLGGirl at October 6, 2008 10:12 AM
I think they left off a zero on those price cut numbers
Posted by: daveinbedstuy at October 6, 2008 10:12 AM
This is not really my price point so maybe I'm wrong but geez, a 30K price cut on a unit over 1 mil seems ridiculously small.
No?
Posted by: Prodigal_Son at October 6, 2008 10:13 AM
I think this building is a victim of location. Unless you are a single person with no interest in having kids I just don't see why you would want to live in that location.
Posted by: wasder at October 6, 2008 10:28 AM
Bad timing. Nowhere is immune. NYC is about to become significantly more affordable for those who can keep their jobs. Spanish cat on CNBC said the same this morning during session with Ed Koch.
Location's fine, wasder. A little rough around the edges but it's downtown Brooklyn. Very convenient. Better location than Oro and Toren.
Posted by: DOW8000SP800 at October 6, 2008 10:52 AM
Be@down. Death by a thousand pricecuts.
Posted by: SnarkSlope at October 6, 2008 10:59 AM
The apartments are small for anyone with kids -- these are like his other building -- 53 Boerum. That building was planned as rental and went condo as the market turned up. This one is doomed to the reverse.
Posted by: BH76 at October 6, 2008 11:01 AM
Do any these units have decent views? I've been looking for a 1-BR in the Heights/Cobble Hill/Downtown area, a few more months on the market and they might be ready for low-ball offers.
Posted by: fishermb at October 6, 2008 11:20 AM
Rentals in 6 months
Posted by: 7andfive at October 6, 2008 11:30 AM
2 months 7andfive
Posted by: daveinbedstuy at October 6, 2008 11:32 AM
Yeesh, gotta be smoking crack to buy anything right now.
Posted by: FatLenny at October 6, 2008 11:52 AM
BH76, 53 Boerum is in a great location with great access to subway and B-Heights, Court and Smith street. The Be@Scher is in a pain in the ass area but building looks ok. I like 53 Boerums location much better.
FatLenny, This is the time to buy so you keep renting buddy. Prices are way too negotiable to pass up some deals.
Posted by: THAL at October 6, 2008 12:01 PM
Fatlenny is a renter, fo' sure.
"Yeesh, gotta be smoking crack to buy anything right now."
Ridiculous.
The smart money is buying and making deals RIGHT now. By the time we finally deflate, Brooklyn real estate will have passed by most. No one is selling on the cheap in Prime Brooklyn. If anything, most will wait it out. This is how it's always worked in NY. Buildings turn rental during downturns and buyers hold. We don't live in AZ or FL, my fat bagel-eating friend.
Posted by: PropJoe at October 6, 2008 12:19 PM
"That building was planned as rental and went condo as the market turned up. This one is doomed to the reverse."
Welllllll...if they planned to rent, then they should be okay if they bought low enough and can hold on (but they probably added a bunch of bells and whistles, didn't they?). Rents will get hit by this slow-motion housing crash but not quite as hard as sales. RE will still be a money-maker going forward but mostly by rental income (residentially and commercially). Sales too but not for a while and not as easy as we're used to.
Posted by: DOW8000SP800 at October 6, 2008 12:33 PM
Oh c'mon, THAL and Prop. Lenny means anything at comps. Of course you'd be smoking crack to pass up a good deal.
Posted by: DOW8000SP800 at October 6, 2008 12:39 PM
Prime Brooklyn will hold its the people that specualated in Bushwick, East New York all those shady areas and East Williamsburg...Boerum, Cobble, Carroll, P-Slope, B-Heights will be ok over time.
Posted by: THAL at October 6, 2008 12:40 PM
53 was planned to be a rental -- there was an article in either the Post or News about the developer. It sold out easily as it was one of the first new condos in downtown brooklyn (about 5 years ago). And there is little difference in distance to subways, Smith St. etc. betweeen the two "be@s". This second be@ was late to the market. The developer had already tried to sell the entire project.
Posted by: BH76 at October 6, 2008 12:44 PM
It's true. Brownstone Brooklyn will be totally immune to the housing bubble that is collapsing worldwide and taking the global economy down with it.
Tulip bulbs, anyone?
Posted by: SnarkSlope at October 6, 2008 12:48 PM
THAL wrote:
"BH76, 53 Boerum is in a great location with great access to subway and B-Heights, Court and Smith street. The Be@Scher is in a pain in the ass area but building looks ok. I like 53 Boerums location much better."
Let's see...Be@Scher is closer to all the subway lines and is further from the jail than 53 Boerum. Odd that you think that constitutes a "pain in the ass area", especially when the two buildings are a only a couple of blocks apart.
I suspect you're either a broker with a 53 Boerum listing or a rather defensive owner.
Posted by: 11201 at October 6, 2008 12:56 PM
DOW--as I said, an OK location if you have no kids. Its convenient and all but if you have kids you are really not going to want to live there. Obviously just my opinion, but you need some green space around you with children.
Posted by: wasder at October 6, 2008 12:59 PM
"This is how it's always worked in NY. Buildings turn rental during downturns and buyers hold."
Maybe since WWII but we are now entering a depression (if the question pops up, as we have seen so far, it's a done deal - i.e. subprime contagion or not, housing bubble or not, recession or not, bank failures or not, the list goes on). Jonathan Miller, Noah Rosenblatt, The Real Deal, etc., have no idea. It is not automatic that more than half of all buyers hold. They have to remain solvent. Leverage is unraveling and the tax man cometh. We are living in different times my man.
Like all RE busts, this will be a long, slow downturn. Market tops might be inverted V-shaped but market bottoms are L-shaped. No rush to catch a falling knife. To do so is to be very confident of where the bottom is. No one knows for certain. One thing is certin: the NYC Case-Shiller YOY has to be aimed at zero and has to go through zero in order for the market to rebound. It's not happening right now (and that index has a two-month lag!!!). No bottom in sight. The best deals will not happen this year, probably not even this decade.
Posted by: DOW8000SP800 at October 6, 2008 1:02 PM
Snark, you funny.
I'll take those tulip bulbs in exchange for some Cisco and JDSU stock I bought in 1999. Or the oil and gas participation interest I bought back in July. Or the $1.2 million 3-bedroom park slope condo conversion I bought in 2007.
Posted by: lechacal at October 6, 2008 1:03 PM
"Boerum, Cobble, Carroll, P-Slope, B-Heights will be ok over time."
You do not get it (nor inflation). We will never see 2008 prices again, adjusted for whatever year you pick, in our lifetimes. This has, HAS, been a once in a life time RE resale opportunity. If you bought anywhere near the top, save a few rare exceptions, you got got!
Somebody please link that historic 1890 to present Case-Shiller graph.
Like anywhere else, Boerum, Cobble, Carroll, P-Slope, B-Heights prices will get murdered.
Posted by: DOW8000SP800 at October 6, 2008 1:09 PM
DOW8000SP800,
We are not even close to a depression because during the depressions there was no government intervention and obvioulsy with the $700 billion bailoutthats another story. The credit markets will eventually start lending and the market will come back.
11201,
Not a broker but an owner in the area though.
Posted by: THAL at October 6, 2008 1:09 PM
The location of this building, in the central business district, could actually be a plus after it defaults and is conveyed to government ownership. It could then be used as emergency shelter for some of the many thousands in the Boro who will be jobless and homeless in the opening years of the Obama Administration.
Posted by: Inigo at October 6, 2008 1:15 PM
"there was no government intervention"
Are you kidding me? What was the New Deal?
Posted by: DOW8000SP800 at October 6, 2008 1:17 PM
"the $700 billion bailout" will disappear into the pockets of Paulson's cronies. He's already appointed another Goldman Sachs guy to parcel out the booty.
That big sucking sound you hear is your money traveling from your pockets to theirs.
Posted by: SnarkSlope at October 6, 2008 1:20 PM
"He's already appointed another Goldman Sachs guy to parcel out the booty."
Oh man! Instead of free tubes of lube, the House should have negotiated oversight for the selection of this advisor. Would it matter anyway? I'm telling you, Paulson and his boys manipulated the markets into that -777 last Monday as a scare tactic to the 401k- and pension-holding constituents. In short, they bit.
All revelations originate from conspiracy theories.
(full disclosure: I don't know what the hell I'm talkin' about)
Posted by: DOW8000SP800 at October 6, 2008 1:33 PM
DOW8000 has never heard of hyperinflation. Real estate will boom once again
Posted by: PropJoe at October 6, 2008 1:37 PM
"DOW8000 has never heard of hyperinflation. Real estate will boom once again"
PropJoe has never heard of Japan's lost decade. Real estate is not a member of the "Hyperinlfation Club". You don't NEED to buy a house (especially with all the rental conversions coming on line). Nice try though.
Posted by: DOW8000SP800 at October 6, 2008 1:56 PM
I'm practically the most bullish poster on this blog. I'm just saying you gotta be Warren Buffet (i.e., loaded with cash) to be buying right now. We're in the eye of the hurricane. Anything you buy right now is a total gamble. It's hard to tell what awaits. Things will no doubt look different in a month but we're in for a tough stretch. If I were a renter waiting to buy, I would wait at least a year and wouldn't buy until a string of good news hits the RE market. Don't try to buy at the bottom; wait for the bottom, then buy shortly thereafter.
Posted by: FatLenny at October 6, 2008 2:26 PM
Spoken like a true renter DOW.. "You don't NEED to buy a house..." NO, but you should.
Posted by: daveinbedstuy at October 6, 2008 2:26 PM
Oh I will, overpaidinbedstuy. Only because my wife has a gun to my head. But I will not, WILL NOT, be paying anywhere near comps until Case-Shiller approaches zero. Until then, all my pitches (bids) will be breaking ball sinkers.
Posted by: DOW8000SP800 at October 6, 2008 2:36 PM
...Case-Shiller YOY that is.
Posted by: DOW8000SP800 at October 6, 2008 2:40 PM
Lenny is correct.
This is the time to buy in the burbs and exurbs. the time to buy in the city will be 12 months from now. I think brownstone Brooklyn will be especially hard hit as the prices here had spiraled up so insanely and many of the newer buyers (and those who re-financed) will find themselves having negative equity.
Posted by: Inigo at October 6, 2008 2:44 PM
Has anybody considered the fact that this building may be smart by keeping prices in line with the current market conditions? Some buildings refuse to lower prices no matter what. I agree with 11201...I personally like the area better then 53 Boerum. I am by no means sucking up to the building, but I am not so narrow minded either as to pass up on a good deal. At some of these prices it is actually cheaper to own something rather then throwing rent payments down the toilet!
I say why not take advantage of it while it lasts...this market will not be like this forever...and once the market does turn around you can bet prices will be going back up again! Sorry but I dont feel like my money is safe in the stock market at all, so real estate is the way to go.
Posted by: bklynguy74 at October 6, 2008 3:34 PM
Hmm..lets see.. $2300 of my out of pocket money toward mortgage or rent? Why would anyone waist their money if they are in a position to buy? The time is now. Deals are to be had. Interest rates are still freaking low for crying out loud. Get over yourselves.
Posted by: foshizo at October 6, 2008 4:02 PM
It's feeling an awful lot like January 1637.
Posted by: SnarkSlope at October 6, 2008 4:13 PM
Fatlenny and ingo are clueless...
THe time to buy is now in the stock market and RE... I luv how u said once it hits bottom then u buy. Becasue its so easy to find the bottom. You need to get a clue. This is when money is made when things look like they are falling apart and that is whats happening. People dont realize apts are negotiable get a good deal and see what happens builders may throw in incentives. There is not too many times in NYC you can negotiate and also remember rates are still low compard to history. Its amazing how many clueless and negative renters try to give advice. Just like the stock market when the RE market corrects it will be so fast you dont know what happened and you tried to time it month to month which is stupid... When u feel is a good deal go in...
Posted by: THAL at October 6, 2008 4:20 PM
THAL, I would love to agree with you, but you're not quite grasping what's going on if you think that the market is going to be soft for only a couple of weeks or months.
Posted by: FatLenny at October 6, 2008 4:28 PM
i beg to ask the question yet again. rent vs own? hmmmm. gosh darn it - how many people out there feel me right now? i have 40k downpayment. invest that in my mattress? in chicken stock? or own a property. we need this to help our economy anyway you imbeciles.
Posted by: foshizo at October 6, 2008 4:35 PM
That's comedy gold, foshizo, comedy gold.
Posted by: SnarkSlope at October 6, 2008 4:40 PM
The bottom line here people is that NY Real Estate will always be a good investment...it is not like anyplace else in the country. There has been and always will be a demand to live in this area. Brooklyn has become increasingly more popular to live in over the last few years. For people getting priced out of Manhattan, they are making their way here.
The fact remains that there are a lot of "haters" out there who will post whenever they get the chance to and thrive on negativity. Most of them are very ill informed of the facts before they get to their keyboard. Bottom line...if you have the means to do so, now is the BEST time to buy if you need a place to live. It is truely a buyers market. If you bother to run some of the numbers you can literally own a place for rental dollars right now. What kind of smart person would say "no thanks, I would rather throw my money away by renting, then have something that I can call my own for the same price". They must really like their landlords and love to give them their money. I agree with foshizo...but hey feel free to keep waiting things out in your rentals...thinking prices will surely get lower and lower...and I will see you back here posting about how you cant afford anything once prices go back up.
Posted by: bklynguy74 at October 6, 2008 4:54 PM
"you can literally own a place for rental dollars right now."
OK my cuddly little sockpuppet, please provide a link to one example.
Posted by: SnarkSlope at October 6, 2008 5:19 PM
it is a good time to buy - several months from now would be a better time to buy. you can bet your pretty penny the Fed is going to lower rates. The bailout is only helping the financial markets, but the growing recession needs something more to kick it out and it begins to appear that inflation is less of an issue (hello Oil dropping below $90/barrel), the door is wide open for the Fed to cut rates. i bet by 2009, we will have some real low rates.
(granted this is only a good time to buy if your job is secure)
Posted by: gomuppets at October 6, 2008 5:26 PM
I can deal with being a "cuddly little sockpuppet" but it would depend on for whom ;-)
As much as I would love to be able to give you concrete examaples...there are too many variables...such as your credit, how much you are putting down, and interest rate....but I will try. If you are able to get a mortgage on a one bedroom in the $300-400K range (which some one bedrooms in this particualar building are right now)...your payments fall between $1,800 and $2,500 a month (after tax savings for interest on mortgage payments)...can you tell that I am in financing ;-)
So let me ask you this...what are you paying for a 1 bedroom rental in this area right now? Does it fall in to that range?
Posted by: bklynguy74 at October 6, 2008 5:33 PM
Let's say I am interested in unit 9G. In one month it has dropped from $570,000 to $505,000. First off, why not wait for it to drop further?
But let's say I am ready to jump on it, and they take an offer of $500k. I put down 20% and get a $400k mortgage at 6.5%. With CCs and taxes, my monthly nut is $3,229. How much is that after the tax benefit?
Posted by: SnarkSlope at October 6, 2008 7:07 PM
Snarkslope, if you have good credit and 20% down, you can get a 30 year fixed for 6% flat with no points, making your monthly nut on 9G $3097 a month before the tax benefit. Not a huge difference, but every little bit counts, right?
Considering you'll pay that much *in rent* for a similarly sized one bedroom in the area, I could see how the numbers could make sense for a lot of people.
Here's a link to some past rentals for comparison:
http://www.streeteasy.com/nyc/building/110-livingston-street-brooklyn
Posted by: 11201 at October 6, 2008 8:00 PM
Ha! future homeless shelter. Whoever said that hit the nail on the f----ing head.
Posted by: sam at October 6, 2008 9:33 PM
To those who say this is a good time to buy, I say (like others), it will be much better in a few months, and will probably get better and better in the next year or so. Prices are actually still extremely high, since I think we hit our peak just before the financial meltdown (yes, yes, I know everyone argues about what the peak was, but I was watching market closely and saw prices going up and up until this past spring when we started to hit a turning point). And cash is king in this kind of market - plus the gov't just raised the FDIC insured limit to 250K so it's easy to keep your cash safe, earning a little bit of interest, while real estate prices soften further. Sure, if you find a place you love, and it's within your budget, go ahead and buy if you plan to stay for a long time, but if like us, you're only seeing stuff that is still ridiculously priced, be patient since things will change as sellers will adjust to the new reality - one in which many of them will still do fine if they've owned for more than a few years...
Posted by: Miss Muffett at October 6, 2008 10:00 PM
Thanks for the rent/own comparisons.
Frankly there is no way I would pay that much to rent a one bedroom apartment, but obviously some people will.
I'll sit tight and watch where things go.
All signs, for now, seem to be pointing down.
Posted by: SnarkSlope at October 6, 2008 10:03 PM
needs 100% seller financing.
Posted by: BrooklynLove at October 7, 2008 7:42 AM
to all ya toughtful lil ben steins out there... prices go further down than what they are today = a decline in neighborhood. hide your ipods yo. oh lookime ..i bought a fabulous 1BR for 200k in boreum hill but geesh i don't feel like i'm in kansas anymore. mommy...........
Posted by: foshizo at October 7, 2008 2:16 PM
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