380 Degraw In Contract, Blue Rooms and All
We gave the owners of 380 Degraw Street in Cobble Hill a lot of grief for their choice in paint color, but it looks like it didn’t stand in the way of finding a buyer: According to the BHS website, the $2,645,000 listing is now in contract. Any little birdies out there know the final…
We gave the owners of 380 Degraw Street in Cobble Hill a lot of grief for their choice in paint color, but it looks like it didn’t stand in the way of finding a buyer: According to the BHS website, the $2,645,000 listing is now in contract. Any little birdies out there know the final price? (BTW, the photo above predates the new cornice that the owner added before putting the house on the market.)
380 Degraw Street [Brown Harris Stevens] GMAP P*Shark
House of the Day: 380 Degraw Street [Brownstoner]
Photo by Kate Leonova for Property Shark
I am glad that 9:37 agrees with me because sometimes I feel like Alice in Wonderland, completely bedazzled and befuddled by the prices and the economics. The strange thing is that if the new prices DO make sense, rents will have to rise to reflect the new “numbers” of brownstone ownership and it will inevitably change the cool neighborhoods which we love so much.
I also agree with 9:37 in that the new flood of apartments, whether condo or rentals will compete with brownstone living and will inevitably depress prices. There is a lot of wonderful things about owning a brownstone, but when your monthly costs for a duplex top 6 or 7,000, complete with the problems of owning a 120+ year old house, huge bright condos will start looking better. Someone used the NASDAQ analogy and it is interesting. I think of the world commodity markets – the growth of India and China surprised the world in terms of massive consumption of basic commodities changing the dynamics of all those markets from crude oil to metals, lumber and foods. Hedge funds rush in to invest while the world reacts to high prices by looking for alternative fuels, planting more corn, sugar, trees, and the massive price spikes of recent years are moderating and will likely go down. Markets respond to price, that is all of NYC is a gigantic construction site and we will see a lot more housing choices in a couple of years. For what it is worth.
But there’s never a shortage of very wealthy people buying properties in Manhattan, 10:45. Even in tough times. So why would it happen here, now that it’s acceptable if not becoming preferable for celebrities and the very wealthy to live in Brooklyn?
This kind of price inflation will absolutely not continue at this rate, because we’re in a unique time when previously undervalued neighborhoods and borough that were blighted in the 60’s and 70’s, are climbing back into being the upper and upper middle class places they used to be. It’s not like properties will appreciate at this rate every year from now on. Of course not. But it doesn’t mean they’ll “crash” either, simply because of the fast appreciation in recent years.
What you are describing, Anon 10:25, are a subcategory of very rich people who buy $3 million homes. Sorry, this is a very limited pool. Perhaps you are right, that they will continue to buy in Brooklyn, but this is about people with unlimited amounts of money to whom an extra million or two is meaningless.
That doesn’t mean this kind of purchase is a guaranteed good investment, however. The problem isn’t that prices are going up — yes, Carroll Gardens should have increased in value — it’s about the rate of that increase. That’s what the Nasdaq did — jump way too high too fast, with no reflection of what a stock was intrinsically worth. The investment was a bet that everyone else would continue to bet that the stock would continue to go up. Once people stopped believing that, the whole thing collapsed.
I just hate to see people buying because they think this kind of price inflation will continue. I’m happy for people for whom $3 million is a drop in the bucket to buy a brownstone just like they might a painting. It just seems silly for people who are betting their life savings to buy at these prices.
It’s a mistake to apply all the old rules over and over like people do here. Remember the new brownstone buyer spending $3 million or more, is not someone who wants or needs tenants.
They have to spend $7 million + for a house in Manhattan. For $3 million they get a condo in Manhattan that isn’t even that big really, or an entire house in Brooklyn, which is a place seeing huge appreciations in values. Which would you choose if you had the dough? More importantly, where do you think their financial advisors would tell them to buy? Even Trump is developing a property in Brooklyn – how seriously do you think he or any of the luxury developers took Brooklyn seriously even 5 years ago? They all have a different attitude about Brooklyn, and we see the results in sales like this.
As for huge apartments being half the price of a $3 million house, 9:37am, which huge apartment is that, I’d love to see it! I saw the Vermeil 3BR condo priced at $1.65 million and it was tiny.
I agree 100% with donatella. By the way, we’ve been renting to tenants in the neighborhood for 6 years, and maybe (in the last 2 years) can get a bit more of each apartment, but even if we got $1,000 more per month, that would barely touch the mortgage on the extra 1.2 million we would now need to buy the same brownstone.
Despite what some people here think, there is not an unlimited supply of buyers who can afford $3 million homes, or even $2 million (and frankly, for most of the people I know in NYC , $1 million homes are way out of range.) Yes, there’s a limited supply of brownstones, but at some point, with alot of new construction, a $3 million brownstone may be competing with a giant apartment for half the price. The value of that brownstone is only what someone is willing to pay for it (kind of like that Jackson Pollack painting). People are betting that others will consistently see some higher value in owning a brownstone, but if fashions change, that won’t be the case.
I agree completely with the one poster who said that Brooklyn is this decade’s NASDAQ. But I have to say that I am a little stunned by the price action here and I ask the question about what is fully priced. Buying brownstones now at these prices doesn’t make sense to me anymore – just like some of the markets, it seems that funny money is moving things now. I don’t see the rents going up much, (or am I missing something). On the Fort Greene place (1.699) featured on brownstoner open house picks this past weekend, the house is a 20′ 4 family, according to the broker sheet, income 4,000 dollars on 3 apartments leaving about 5,000 dollars for the owner to pay for his duplex, This assumes 20% down. This duplex I might add has bad floors, 100 coats of paint on moldings, Adams family hall decor complete with linoleum, a 40 year old kitchen with old linoleum, discolored exterior from bad patching, i.e. it has been maintained mechanically but nothing has been done to this house for 40 years and it didn’t look good in 1967. This is the CHEAP brownstone that people were whispering about. Not even touching the apartments or changing the configuration, just renovating the duplex and fixing the halls and the exterior would cost at best 300,000 dollars plus 1-2 years of life disruption and what do you have – a 2 million Fort Greene brownstone. How much will you pay to have 2 floors in a brownstone? Or you may decide that this is the new Brooklyn and new real estate economics and decide to ask tenants for a raise in rent to cover your improvements and repairs, will you get it? I don’t know. In the end, to sustain current price rises in brownstone Brooklyn, rents will have increase. How long can this last? Don’t know
Someone just paid 70 million dollars at auction for a Jackson Pollok painting. Is that a good investment?
Who knows? you just don’t want to be the last man, y’know?
one more thing. There’s a guy I know who, with a reasonable cost of living, bought a townhouse on 95th and Madison in 1979 for $70,000. He sold it to someone for 100 times more last year, to someone with a reasonable cost of living — for manhattan.
What do you expect? There’s nothing wrong with brooklyn “these days”. If you learn some history about your borough, you’ll know this is where the wealthiest new yorkers historically called home. HOME. (Hence the masses of beautiful buildings). This is NOT some quaint little Catskill town. Much as I hate all these dollar signs, you wouldn’t have your Humble Heath moments in the ‘hood if the man wasn’t a friggin millionaire.
YEah, we would also have to rate Whoa him/herself, as he/she rates his neighbors.
I agree with Whoa’s point that it is homes we should be buying, not investments. And guess what, that’s exactly why most people are on Brownstoner to begin with– we are all in LOVE with the idea of a home, an ideal of a home. Most people, of course, not all. But if you look at the forums, and you look at the general responses people have, these are EMOTIONAL responses. We do care where we live, and how the neighborhoods are changing.
Many people on this site are about to invest in their first property (Brownstoner helped me through buying my first home). It is a nervewracking process; no matter how much money you earn, inevitably you will always find a home that is barely affordable to you and you make the stretch/leap of faith. And therefore, people tend to obsess about whether the value is there; because they’re banking their entire livelihoods on it, dumping all their money (plus a lot more) into something that may become a bottomless money pit. Give us a break.
Whoa, you sound to me like a complacent, self-satisfied resenter of the “new people” coming into your neighborhood. This is NYC. It is based on change, expansion, growth, immigration, emmigration and evolution. Relax and appreciate it. Or move to Long Island where you will find more people like yourselves gating their communities.