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April 26, 2009
What's Fair Value in Bk now?
So real estate has come off, developers and resellers now understand this and have cut prices.. so that leaves me with the question.. what is a fair price currently for the following so people can get an idea what to expect to pay and for what, and in what neighborhoods (w'burg, park slope, downtown bk, etc.)
New development: 1BR (avg 750 sqft), 2BR (avg 1100 sqft), PH (avg 1400 sqft + terraces)?
Resale condo?
3-4 story house?
Multi-family house?
Comments
That is an impossible generalization.
A multi family house in Brooklyn Heights is going to have a completely different metric than one in Bushwick. Hell, 2 BH brownstones will have different metrics based on C of O and structural condition, rent control/rent stabilized tenants,
For condos, different developers have different reputations as to quality of build. 50% sold/occupied? 60%? Location?
You can only compare specific properties (hence the concept of "comps").
You may be able to narrow down neighborhoods but a lot still comes down to specific properties. Does the PS multi-family have updated electrics? How is the roof?
In my opinion you can't give any sort of bonafide answer to such a general question. There is also the everlasting unquantifiable.... what is it worth to the person willing to buy it for whatever reason they want it?
Posted by: christopher at April 26, 2009 7:24 PM
ok so limit these to properties 5 or less years old, walking distance to manhattan-bound subway lines, and forget multifamily.
Basically I am looking to buy but I have no idea what fair values are anymore as things indeed seem to be in a bit of dissarray.. looking at the new constructions in W'burg you'd think the developers have been in a 6 month coma with the prices they are offering (even after "cuts")..
I think now is a great time for me to buy a place (to live in and grow a family, not to flip or rent out), but I don't want to pick myself off for being un-informed.
Posted by: hazenyc at April 26, 2009 7:34 PM
Find out what the going price in 1997 was and that is today's fair market value
Posted by: hannible at April 26, 2009 9:10 PM
This board is pretty much an all-day everyday argument about "fair" value. There is no consensus.
Your best bet is to do your own research - find properties similar to those you're interested in and see what they are both asking and selling for via streeteasy, property shark, or other sites people use to find comps.
Posted by: squaredrive at April 26, 2009 9:43 PM
with 70 square miles of land and 2.5million inhabitants... its impossible to answer... more details please :)
Posted by: guikazoid at April 26, 2009 11:07 PM
"ok so limit these to properties 5 or less years old, walking distance to manhattan-bound subway lines, and forget multifamily."
-Posted by: hazenyc at April 26, 2009 7:34 PM
Still to general. Like squaredirve said, do your own research. The concept of "fair value" is a constant debate with no real answer.
You say you want to buy and live and grow a family, but you ask for "fair value" of a 1 bed. Is a 1 bed a place you can grow a family with?
You need to do your own research and legwork. Find a few places that look like the size and location you want. Check the current asking prices against what they've sold for in the past as well as what similar places in different developments are selling for.
What you decide is "fair value" might not be anyone else's. I recently bought a property. I offered less than asking because that is what I felt was "fair". The seller adjusted their idea of "Fair" and accepted my offer. Mine was the second offer. the first offer was lower than mine, so obviously that person placed a different "fair value" on the property.
Do your own legwork and research, can't stress that enough. Before too long you're realize for yourself what is "fair"
Posted by: christopher at April 26, 2009 11:37 PM
i've been thinking about methods of valuation lately. the best method i've thought of is an "affordability analysis". First, you need a baseline for affordability by neighborhood. In 1950, 1960, 1970, 1980, 1990, 2000, who could afford to live in given neighborhoods? Lawyers, doctors, teachers, working poor, artists, etc..
The truly subjective area is to compare neighborhoods then and now. Upper east side then = upper west side now. bed stuy then = East NY or Brownsville more or less...
it requires more knowledge of ny than i have but i think the theory is sound although it works better for some neighborhoods than others. it also relies on the mta continuing to do what it does....
Posted by: slick at April 27, 2009 3:20 AM
Find comps from 2007. Subtract 25% to 40%. I think that will give you a number where you can expect something to actually sell at this point.
Posted by: lechacal at April 27, 2009 8:29 AM
Read my tagline. Pay anything more and that would be unfair to yourself. Prices have not fallEN. They are fallING. Why catch a falling knife? Buy like a quarterback. "Throw the ball" where the "receiver" will be, not where "he" is right now. Otherwise, you will miss the market bottom threshold (NY Case-Shiller index approaches zero change from previous year). Banks say 3X income. That means prices have to fall in half. But, like greed, fear may make things "worse" (for sellers). The previous sentence is unthinkable but so was +200% appreciation.
On the other hand, maybe you're wealthy and can be a philanthropist and help stimulate the economy.
***Bid half off peak comps***
Posted by: Brownstones Half Off at April 27, 2009 9:59 AM
Yes that 2 bedroom 1000 sq foot in park slope that went for $625K in 2007 is now getting $375K.
That's definately what I am seeing...
Posted by: newsouthsloper at April 27, 2009 5:11 PM
375K is still too much. That price neets to come down to 199k-249k to seem reasonalbe
Posted by: hannible at April 27, 2009 5:53 PM
hannible- You never fail to make me laugh.
You and the what should get a sitcom together.
Posted by: Adam Dahill at April 27, 2009 7:16 PM
I am amazed with all the ideas about Fair Value. On the stock market Fair Value is the current price of this or similar contract. So the only way to determine fair value is to look at the comparable. Unfortunately you can find out about comparable only for closed deals, which will give you a 3 months delay. In other words closed comparables represent the fair value of the house 3 months ago.
As for all these "too high" and "wait until market unwinds" - they guys want prices to fall. Same guys fill the financial forums screaming about falling prices of GS and such. They are short sellers and try to manipulate market by baseless statements. Future of the market is unpredictable. Tomorrow treasure can decide to print gabs of dollars and inflation will make houses cost twice more for example or flu pandemic will wipe out whole NY and prices will fall to 0. You never know.
Posted by: bobjohn at April 27, 2009 8:20 PM
Alright so despite not getting much of an answer here I did look at comps (streeteasy, propertyshark, trulia, etc.) and had a price accepted on a great boutique penthouse (the only one in the bldg) 3 stops in to 11211 .. top top of the line appliances, 3BR 2 bath tons of outdoor space, views, skylight, the works. The price we met at was $650 sq/ft.. which is probably too high except this is a one of a kind not a cookie cutter in my opinion.
Of course I didn't pick the bottom.. but I certainly was able to afford a place that I would've been priced out of not 6 months ago! This will be a place i can live for years and start a family.. I am not interested in flipping or becoming a landlord in it.
As for the inflationary scenario, it certainly will happen (2010? 2011?) as the gov't prints more and more dollars and the fed monetizes debt.. So now is a great time to take a loan at 4.85%! Rates can't go much lower but can and will certainly go higher to counteract inflation.
One thing though, Do Not Mistake Declining Living Standards for Deflation!
Posted by: hazenyc at April 27, 2009 9:07 PM
Congrats. Enjoy your home.
Posted by: Adam Dahill at April 28, 2009 9:18 AM
Good Dahill but while I am out working making cash to buy my home I see that you are busy sitting at your desk trying to sell real estate. Give it up we will buying real estate on ebay soon and will not need brokers who sit on their fanny all day.
Posted by: hannible at April 28, 2009 9:28 PM
Hannible - Do you even have the slightest clue of anything? Where do you come up with these totally innacurate statements. Anyone with the ability to pay attention for 3 seconds knows Adam is not a real estate broker.
Jeez, what a mook.
Posted by: newsouthsloper at April 29, 2009 7:59 AM
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