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February 6, 2009
Toll Even More Serious Than We Thought About Price Cuts
It seems that the price cutting situation at Northside Piers in Williamsburg is more widespread than we or Curbed thought. A tipster points out that some of the higher-priced units actually got huge price cuts but didn't show up on StreetEasy with a down-arrow next to them. To wit: Penthouse 2 was massacred from $2,019,990 to $1,274,990; PH3 from $2,111,990 to $1,350,990; PH5 from $1,680,990 to $1,095,990. Holy crap. What will the ripple effect be? GMAP
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Comments
I think one of this ripples will definitely hit the Edge.
Posted by: dittoburg at February 6, 2009 10:22 AM
Wipeout.
Posted by: SnarkSlope at February 6, 2009 10:23 AM
Smart move by Toll.
Posted by: lechacal at February 6, 2009 10:25 AM
Individual homeowners for the most part can put off selling their homes, absent a job change or some other life event. Builders of large projects must pay back their construction financing- any way they can. Going all rental can help- but there will be more price cuts on new projects to come.
Posted by: panda10 at February 6, 2009 10:27 AM
panda...which is why the condo market and not the townhouse (brownstones/bricks/limestones) 1-2 family is seeing the hardest cuts in prices. No one is building new brownstone homes.
There, I've said that again...discuss.
Posted by: daveinbedstuy at February 6, 2009 10:31 AM
As the condo prices go down, the townhouse market will follow. Perhaps not as much, but it will follow. Even those who may want a brownstone may not be able to justify the cost differential, so demand for townhouses will fall, pushing prices downward. Simple, really.
Posted by: SnarkSlope at February 6, 2009 10:36 AM
What about browndos - how are they doing?
Posted by: dittoburg at February 6, 2009 10:41 AM
Maybe I'm just overly cynical today, but I don't see how this affects anything other than the superduper Wmsburg condo market. Is there really that much of a clamor for multimillion dollar Williamsburg condos anyway? Was there ever? I can understand well off trendsetters buying below a million, but 2 million?
Seems to me the whole area was hyperdeveloped anyway, with everyone trying to piggyback on the success of the first few buildings. By the time this one was built, it was already over, the euphoria was wearing away, and it was a crapshoot that this buildings perks and the apartments themselves would cause them to fly off the shelves.
Eh, just my jaundiced opinion, as I don't get the appeal anyway, although I certainly don't knock anyone's choices to move wherever and into whatever they want.
Posted by: Montrose Morris at February 6, 2009 10:44 AM
As a waiting-thinking-wondering potential buyer in Brooklyn who prefers a brownstone to a condo, I have to confess that at some point, the value proposition of a dramatically discounted condo becomes too compelling to discount. I have a couple of "musts" and desire as I might a townhouse or duplex, I'd be foolish to pay too much of a premium to live in the brownstone belt.
Posted by: 2br_or_bust at February 6, 2009 10:46 AM
If they'll give me a yard where i can grow toms and flowers, i'll take that three-bedroom.
Posted by: dittoburg at February 6, 2009 10:51 AM
that penthouse would get you laid in a second.
might be worth the 1.2 million.
Posted by: Santa at February 6, 2009 10:57 AM
If a two bedroom is all you need/want, then why would you be looking into buying a townhouse in the first place? You'd be renting at least half of it out if you are only going to use 2 bedrooms.
Posted by: 1842 at February 6, 2009 11:14 AM
I completely agree with MM. Was there ever a big demand for multi-million dollar condos on Williamsburg? Wasn't it just irrational exuberance on the part of developers whose motto must have been: "Build it and they will wildly overpay"
Posted by: sam at February 6, 2009 11:16 AM
Oh, I see, there is a 3br for 1.35MM, but the common charges are 1447/month. Maybe that could lure a potential brownstone buyer? I don't know...
Posted by: 1842 at February 6, 2009 11:18 AM
they assumed theres a big demand for multi-million dollar condos on the water.
Posted by: Santa at February 6, 2009 11:19 AM
1842-
I guess you are referring to my username. It's from a not actually very funny thing my midwest born and bred father said in reaction to NYC housing prices. I'm interested in something more than 2 bedrooms, but the memory of that reminds me to keep some perspective on this whole scene.
Posted by: 2br_or_bust at February 6, 2009 11:21 AM
In my idle perusing of new listings, I somehow "wish away" common charges when thinking about the place. And then I remember to look at them. Dammit.
Posted by: 2br_or_bust at February 6, 2009 11:26 AM
I am generally quite bearish, but just as sales of $3 million homes in closed religious neighborhoods isn't really evidence that everything is OK, I am not sure that price cuts in Williamsburg means all that much to the larger market. Williamsburg was obviusly going to be in severe trouble with that huge ratio of new development to existing high end homes. Most of "brownstone" Brooklyn's hopes to avoid the downturn rests in the idea that there just won't be that much supply up for grabs before we hit the turnaround in a few years. I think that those who believe this to be the case underestimate the ordinary need for turnover due to life forces. But any area with big built in supply from new developments is going to feel the pinch quicker and deeper.
Posted by: Ledbury at February 6, 2009 11:29 AM
"Maybe I'm just overly cynical today, but I don't see how this affects anything other than the superduper Wmsburg condo market."
The thing is, there are plenty of people in the market who will consider both shiny new condos and gritty old brownstones.
Not everyone will consider both, and sometimes those people have trouble understanding how the people who are willing to consider both drive the market.
But it *is* those people who consider both who drive the market.
This is because they are the ones who decide what premium the shiny condos will sell at v. the gritty brownstones. And if they decide gritty brownstones should be 20% less than shiny condos, then the market will stabilize with condos at $1,000 psf and brownstones at $800 psf.
But if they then decide the condos should only be $800 psf, then the brownstones will be driven down to $640 psf.
The change won't happen immediately because the market is inefficient, but it will happen eventually.
Posted by: northsloperenter at February 6, 2009 11:32 AM
northsloperenter, I think you just described my wife and I (and a couple of other folks I know).
I don't think condo prices/carrying costs have come enough to dissuade someone like me, who has a moderate preference for a brownstone-like place, but I can imagine a scenario where the scales are more even. Now if brownstones get even half the haircut these condos are getting, I might have to leave Team Groundhog (you know, those of us who have no earthly idea what the market it going to do and are staring and our own shadows and wondering whether to venture out or dive back in for awhile) and pull the trigger.
Posted by: 2br_or_bust at February 6, 2009 11:39 AM
But wouldn't you say, northslope, that the market for the two kinds of homes is vastly different? Those looking for brownstones are looking for things that will not be found at any price in a new condo, and the opposite, as well. Very few people could switch at will from one to the other, with price as the main consideration for a choice. Therefore, what goes on in the condo market may affect condo sales in brownstones, but not neccessarily the sales figures of brownstones as single or 2-4 family houses.
Posted by: Montrose Morris at February 6, 2009 11:47 AM
> "But wouldn't you say, northslope, that the market for the two kinds of homes is vastly different?"
I like both, so put me in northsloperenter's camp.
Posted by: SnarkSlope at February 6, 2009 11:51 AM
I think Santa sums up the prospective $1.2 million Williamsburg condo buyer well.
Back in the day, when all those studio and one-bedroom condos went up around Maccaren Park, they were actually quite a bit cheaper than most things in Brooklyn at the time, even though prices were in the mid-400s for a fake loft (glorified studio). I used to wonder who on earth was buying these things. Certainly not families looking for a deal nor Wall Streeters looking for "luxury" and an easy commute on the glorious G train. Then I finally figured it out: The trustafarian NYU students and Euro grads.
But these condos are a different deal altogether. I find their appeal dubious, but who knows -- if buildings like these have succeeded in Dumbo and Long Island City, why not here?
Another factor not to be discounted is the Williamsburg right now has the best concentration of retail, restaurants, and services *for the money* in the whole city. It's a very big foodie place and a very big fashion place. Oh, and let's not forget the nightlife catering to those Santa mentions above.
Posted by: mopar at February 6, 2009 11:57 AM
"But wouldn't you say, northslope, that the market for the two kinds of homes is vastly different?"
For some people, yes, but for many others, no.
I'm looking for a home.
To me the interior space and the neighborhood matter much more than the exterior.
There are advantages and disadvantages to both types, but when I'm looking for a place to live my priorities are:
1a. Size and layout of space.
1b. Neighborhood.
1c. Cost.
Everything else is secondary. Whether the space in question is in a 100 year old brownstone or a 2 year old glass condo is not a make-or-break issue for me.
Posted by: northsloperenter at February 6, 2009 11:59 AM
I know you weren't asking me Montrose, but I think there are a lot more people fairly agnostic between a brownstone and a condo than you might think. Many people who aren't "into" real estate simply want nice space in a desirable location. Someone's taste might run in one direction or another, but not enough to overwhelm the fact that in the scheme of their life, that affinity just isn't that important.
To the degree that cerain parts of Brooklyn only have brownstones and certain parts have mostly condo's, then there may be a point because location is absolutely key for many. But most areas have enough overlap or are similar enough that I think the two markets do definitely intersect.
Posted by: Ledbury at February 6, 2009 12:00 PM
I am just going to keep nodding my head to northsloperenter.
Posted by: 2br_or_bust at February 6, 2009 12:02 PM
And I am just going to keep nodding my head to 2br_or_bust.
Posted by: SnarkSlope at February 6, 2009 12:09 PM
Who wants to buy a condo? You would still be paying the maintance costs after you finish paying off your condo. If you pay maintance costs you are really not a homeowner. You are a renter that does not know how to wash a stairway or change a lightbulb.
Posted by: hannible at February 6, 2009 12:21 PM
handicapped + babble = hannible.
Posted by: SnarkSlope at February 6, 2009 12:23 PM
hannible,
that has to be one of the dumbest posts in the history of brownstoner, and that's saying something.
Posted by: sam at February 6, 2009 12:25 PM
Right, because lightbulbs are the the only recurring costs of a house beyond the mortgage.
Posted by: 2br_or_bust at February 6, 2009 12:29 PM
I agree with the folks who say that it was never demonstrated that there really was a market for two million dollar condos in Williamsburg. It was a guess by developers who bet the ranch on the idea of Williamsburg as a neighborhood that would only continue to explode. They over-reached and now they are scrambling to limit the damage to their bottom lines.
Posted by: wasder at February 6, 2009 12:32 PM
"Williamsburg right now has the best concentration of retail, restaurants, and services *for the money* in the whole city."
That's a bold statement.
Posted by: East New York at February 6, 2009 12:33 PM
If you had the cash and the inclination you could probably walk in at offer $1,000,000 even for PH2. Quick cash deal. They would probably take it.
But of course, that is only if you had both the cash and inclination...
Posted by: christopher at February 6, 2009 12:37 PM
"They over-reached and now they are scrambling to limit the damage to their bottom lines."
Sounds about right. Though I would extend this beyond the borders of Wiliamsburg to all of NYC, or actually, all of the world, as this deflating bubble is a global issue.
Posted by: SnarkSlope at February 6, 2009 12:39 PM
I (nodding my head with team BEAR) was searching for 2Br, <700K, open houses for this weekend in real Park Slope on Streeteasy and there were a few coop & condo with some large price drops within the last 7 days.
Address
190 Garfield Place #3F - Price reduced 30K
209 Lincoln Place #9B - Price reduced 51K
45 Seventh Avenue #5 - Price reduced 49K
90 Eighth Avenue #4C - Price reduced 50K
320 Eighth Avenue #4A - Price reduced 51K
502 1st Street #4 - Price reduced 97K
502 1st Street #3 - Price reduced 61K
502 1st Street #1 - Price reduced 95K
unemployment at 7.6% and heading higher ... more price reductions coming
Posted by: ZooLander at February 6, 2009 12:44 PM
christopher-
I agree. I guess the inclination decision depends on whether you think that 1MM is the floor there. Man, I just don't know that even there you're going to be pleased with the deal come the fall.
Posted by: 2br_or_bust at February 6, 2009 12:46 PM
I like aspects of brownstone & preserved hoods, and I also like sleek modern glassy interiors with great views.
I do remember having a belly laugh though when I read that penthouse at the top of 20 Bayard on McCarren park in the Burg went for some loony multimillion price.
Posted by: dittoburg at February 6, 2009 12:50 PM
Ditto:
I've been curious about 20 Bayard actually. Wasn't that one of the first buildings to go up around the park some time ago?
Just noticed that a whole sh*tload of units hit the market on Corcoran's website a couple weeks ago at 20 Bayard. I don't know why...I had thought that one would have sold out long ago.
If that place isn't even sold yet, how can we expect these ones down by the water to fair much better?
Posted by: 11217 at February 6, 2009 1:03 PM
"Though I would extend this beyond the borders of Wiliamsburg to all of NYC, or actually, all of the world, as this deflating bubble is a global issue."
Sure, but I think it is always interesting when you can pin it down locally like that and see how individual developments over reached. There are obviously some places where super high end luxury condos make more sense than in Williamsburg.
Posted by: wasder at February 6, 2009 1:10 PM
I've been up there, the view is good and the park is right there and has a decent farmer's market with a fungi guy and a fishmonger. Still, its not much closer to the subway than Northside towers and the finishes are iffy (leaking windows warping floors in a friend's apartment). I'm sure their asking prices will plunge too.
Posted by: dittoburg at February 6, 2009 1:11 PM
Buy Buy dumb sellers are looking for buyers like you. Just don't ask for TARP money.
Posted by: hannible at February 6, 2009 1:13 PM
"super high end luxury condos"
As far as I am aware the Edge place is the only development that might be described as that. Assuming it gets finished and not turned into a giant climbing frame.
Posted by: dittoburg at February 6, 2009 1:21 PM
williamsburg is an animal unto itself - enormous glut and prices that had built in crack smoked future expectations. i'm not saying the wb should be viewed in a vacuum but it is in a uniquely tender spot. lic is similar but to a lesser degree.
Posted by: BrooklynLove at February 6, 2009 1:24 PM
Downtown Brooklyn will soon be looking mighty tender too, yes?
Posted by: SnarkSlope at February 6, 2009 1:41 PM
talking of downtown didn't anyone buy that top-floor place with the statent-island basement apartment windows yet?
Posted by: dittoburg at February 6, 2009 1:57 PM
Another side effect of the 'cheaply and quickly' built condos in WB is that the word has gotten out on some of them that there are issues with many of these. This may also be some of reason that the prices are dropping so far, so fast.
One friend bought a WB condo as an investment, only to find that not only does it need new major heat/water heater, but there are leaks throughout, and there are giant assessment fees for a leaking basement/poor foundation coming.
What seemed like a good investment 2 years ago is now sink hole for her hard earned cash.
Posted by: cobblehiller at February 6, 2009 2:21 PM
Reminds me of the Towers, the most luxurious building in Jackson Heights. It is very far from the subway, and was completed just as the Depression got underway. They couldn't sell it for love or money, it became a rental, was divided up into smaller apartments, and so on. Apartments are 1,600-plus square feet, with fireplaces, butler's pantries, elevators, a private playground. It's Jackson Heights' answer to the Dakota.
Building pretty much stopped for a few years because the builders couldn't get financing. When it started up again, the new apts were sad shrunken creatures with dining "areas" instead of dining rooms and, of course, no fireplaces. That model hasn't changed, alas, although post-war they added a lot of useless square footage, dressing rooms, second bathrooms, and endless windowless drivel.
Posted by: mopar at February 6, 2009 2:23 PM
I remember when the crash came and they called the Empire State Building the Empty State Building. And you could have a good night out and a eat-a-teria a catch a trolley home for a nickel. I miss those days.
Posted by: dittoburg at February 6, 2009 2:41 PM
dang ampersand ain't working
Posted by: dittoburg at February 6, 2009 2:52 PM
I'm bold, East New York.
Ditto, are we both approaching our 107th birthdays soon!? We'll have to celebrate somewhere suitable like a Burg speakeasy.
Posted by: mopar at February 6, 2009 3:27 PM
Indeed you are, Mopar my man!
Posted by: East New York at February 6, 2009 3:59 PM
Where is sebb? Where is wine lover?
Posted by: sixyearsandcounting at February 6, 2009 4:34 PM
> "Where is sebb? Where is wine lover?"
Probably down at that Burg speakeasy, taking their sorrows out for a dip.
Posted by: SnarkSlope at February 6, 2009 5:01 PM
I see you are very bitter Sam. Is it because you are starting to feel stupid for over overpaying for your crummy home. and now you can't afford it and some lowlife like me is going to buy it for a song and a dance? Well you thought you were so smart when you bought and all us hard working renters were your dumb servents. Well payback is a bitch isn'r it?
Posted by: hannible at February 6, 2009 5:50 PM
Thank you, East New York. Although I'm a woman, actually.
Posted by: mopar at February 6, 2009 6:07 PM
Why pick on Sam?
Posted by: mopar at February 6, 2009 6:09 PM
THAT BHEIGHTS TOWNHOUSE IS LOOKING MORE AND MORE LIKE SOMETHING I will be able to get for 1 million or less. YES....
Posted by: HOBOKENROCKS at February 6, 2009 6:13 PM
Wow great move by Toll brothers...get out ASAP to limit the hemorrhage. Absolutely beautiful!
DIBS & MM you guys are right the limited supply of brownstones make them more desirable but make no mistake they are not immune to significant price reductions and devaluation as Snarkslope so simply pointed out.
Remember once condos are so "cheap" that they become affordable potential brownstone renters will undoubtedly opt to buy condos instead of renting their beloved brownstones...the link is simply unavoidable on the lower end of the market...$400K 1 br apartments.
We are already seeing 15 to 20% price reductions on nice brownstones in Park Slope for example from today's Open House picks...this trend will continue for a while and more drastically in "fringe" neighborhoods.
Posted by: pierre de taille at February 6, 2009 6:57 PM
Pretty scary stuff for the bagholders. Even scarier, this is just the very beginning.
Posted by: cornerbodega at February 6, 2009 8:45 PM
Where did the value of "my" million dollar home go? I put zero percent down but I still say "my". I thought I was so smart to buy at inflated prices and I even made fun of renters and how stupid they were to rent. I hope the government gives me some TARP money, it is not fair to me to lose "my" home.
Posted by: hannible at February 6, 2009 10:45 PM
You folks forget that brownstone living goes in and out of style. Thirty years ago in Greenwich Village nobody wanted to "walk up stairs" and you could pick them up for $40,000 or less.
Over the long term in NYC, I personally believe a Manhattan penthouse in a prime building will appreciate more than your average Park Slope brownstone.
Brownstones won't go to $40,000 again, but I wouldn't be surprised if general consensus changes and folks decide they didn't want to "sweep the stoop" or "repair the leaking roof" anymore.
Posted by: IronBalls at February 7, 2009 8:38 AM
Fashions do change, IronBalls, which is why ten years from now people will cringe at the thought of "luxury lofts." Then after people badly remodel them into something different and even worse, they will come back into fashion 40 years later and sell for a premium. If they haven't fallen apart, of course. (People said that about cast-iron buildings too, BTW -- that they would fall apart.)
Posted by: mopar at February 7, 2009 10:38 AM
You can get a two-bedroom lux condo in Tribeca for $2MM, so why would you buy one in Williamsburg? Granted, I am no fan of Tribeca, (like DUMBO, I don't understand how something so full of traffic can be considered luxury), but it seems like it would be the same demographic.
Posted by: Heather at February 7, 2009 1:08 PM
I live in Northside Piers and the reason why the last apartments are not moving is because these are the ones are either on lower floors or have obstructed views caused by the second building. The third building being planned isn't helping either so I hope that it never gets built. The best apartments in the building in my opinion are the D and E line which faces southeast with views that are breathless. The PH that are in these lines with the lower prices should get snap up pretty quick. If I was looking to buy now I would just buy into building two with beautiful sweeping views of the city. Just my opinion...
Posted by: Dboy at February 7, 2009 2:45 PM
Ironballs....
Here is a quote from the New York Times in 1982. It would not appear to me that a townhouse in the West Village could be bought for anything close to $40,000 in 1979...
NYTIMES
November 19, 1982
"In 1979 Mr. Katz purchased the 100,000-square-foot building. Built in 1930, it was used as a garage by the Hertz Corporation. Its 83 apartments, of which about 65 have been sold, will be ready for occupancy in January. The condominium units of studio to two-bedroom size are priced from $95,000 to $374,000. Monthly maintenance fees range from $135 to $382."
http://query.nytimes.com/gst/fullpage.html?res=9800EFDE1239F93AA25752C1A964948260
Posted by: 11217 at February 7, 2009 5:51 PM
Williamsburg is full of kids and families. I know I'm one of them. I do not understand why are so many 1bdrms and studios. Did developers not see the strollers? 3 bedroom units are kind of rare.
Posted by: bqe1970 at February 7, 2009 7:57 PM
Latest Restaurant Additions
-
Le Barricou
added November 20, 2009 12:00 PM in Williamsburg -
Der Schwarze Kölner
added November 19, 2009 12:00 PM in Fort Greene -
Oak Wine Bar & Café
added November 18, 2009 12:00 PM in Williamsburg -
Mr. Wonton
added November 17, 2009 12:00 PM in Park Slope -
Casa Rosa
added November 16, 2009 12:00 PM in Carroll Gardens -
Cousin John's Café & Bakery
added November 13, 2009 12:00 PM in Park Slope -
Elote
added November 12, 2009 12:00 PM in Williamsburg -
Miracle Grill
added November 11, 2009 12:00 PM in Park Slope -
Phoebe's Cafe
added November 10, 2009 12:00 PM in Williamsburg -
Ruthie's
added November 9, 2009 12:00 PM in Clinton Hill, Downtown Brooklyn
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