As Market Shifts, A Flight to Quality
Broad statistics sure aren’t painting a very clear picture of the market dynamics these days. A couple of recent examples illustrate the flight to quality that’s happening right now. Close readers of the comments may know already that 191 Washington Park, an Open House Pick on August 25th, went into contract within a matter of…
Broad statistics sure aren’t painting a very clear picture of the market dynamics these days. A couple of recent examples illustrate the flight to quality that’s happening right now. Close readers of the comments may know already that 191 Washington Park, an Open House Pick on August 25th, went into contract within a matter of days of its first showing at the asking price of $1.9 million. Other, more marginal properties, have been languishing for months. Take, for example, 52 Irving Place. Back when it was a House of the Day on March 6th, we were surprised to see a house in Clinton Hill for under a million bucks. It had recently been cut from $999,000 to $975,000. Clearly that didn’t do the trick and the owners are getting antsy. It resurfaced last week on Craigslist for $700,000. Now, we’ve seen some price cuts in our day, but this is one of the most drastic. Think it will move quickly at this price?
Open House Picks [Brownstoner]
HOTD: 52 Irving [Brownstoner]
Reduced: Clinton Hill One Family [Craigslist] GMAP P*Shark
exactly 5 years ago to the day, i stood on the roof of 56 lefferts place and watched the towers collapse. i paid $640 a month for my one-bedroom apartment in that building back then. granted, it wasn’t in a brownstone, but still. i can’t believe how expensive that neighborhood has gotten.
It moved quickly because the owner is smart enough to take the first sucker’s offer. In June 05, the neigboring house(190 Washington Pk) sold for $2,351,500.
What’s so different about these 2 properties to warrant a 20% discount?
How does a 20% YOY decline in value support your ‘flight to quality’ theory?
2160 is an especially small rowhouse/brownstone. Many in this area are twice that size.
Although property prices maybe a bit softer contruction costs are increasing.
So properties needing extensive renovation will need to priced at even greater discount to move-in props.
House is only 2160 sq ft but at $700K should sell. And probably would have sold if handled by more prominent real estate agency.
I think the thrust of your argument makes sense re quality houses still selling well, but the example of Irving is probably an example of an extreme. Irving had been on the market for about a year on and off before it became HOTD a few months back. Irving is also small and narrow (two windows wide and only 3 stories, including the ground floor) – plus it lacks historic details or decent finishes and the block is not the most desirable in the area. They were delusional with the price they asked originally and are feeling the pressure after more than a year on the market.
Another one of your HOTDs closed back in July. The FSBO at 15 Lefferts Place in Clinton Hill. I think it was your HOTD near the end of April. It was listed at 1.495 million and from the city records, went for 1.49 million. The owners never had an open house because they had an accepted offer pretty much at asking within a week or so of listing their place in the NYT. The offer had already been accepted before you put it up as the HOTD if I remember correctly. 15 Lefferts Place is a really nice house on a nice block, so I suppose it is another example of a good quality building still going quickly.
It should be for free in that drug dealing nabe
HOUSING MARKET DOWN IN
THE DUMPS
By TOM BAWDEN
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September 8, 2006 — The nation’s once rip-roaring housing market is facing a one-two punch of potentially rising interest rates and the first drop in home prices in 13 years.
“The outlook is extremely bad,” said Euro Pacific Capital Chief Executive Peter Schiff.
“House prices are going to experience an unprecedented collapse, falling by as much as 70 percent in some areas, erasing all of the gains in the last six or seven years.
“They can no more stay at their current levels than the Nasdaq could stay at 5,000.”
The fall in house prices could plunge the economy into a recession as the consumers who have fueled economic growth by borrowing against their properties attempt to build up their savings, Schiff said.
“Sales are slowing, homes are plentiful and sellers are negotiating,” said National Association of Realtors’ chief economist David Lereah. “Under these conditions, we’ll probably see prices dip temporarily below year-ago levels.”
Lereah’s statement came hard on the heels of profit warnings from Beazer Homes USA and KB Home. To compound the gloom, Federal Reserve Bank of San Francisco President Janet Yellen warned that inflation remains “uncomfortably high” and may prompt “further firming” of the federal funds rate.
The S&P 500 fell 6.24 points to close at 1,294.02 and the Dow Jones industrials sank 74.76 points to 11,331.44. The Nasdaq composite index declined 12.55 to 2,155.29.
The last time the median price for an existing home fell to below the year-earlier level was in February 1993, when prices dropped by 1.1 percent.
Yellen’s comments about inflation come just one day after rising prices returned to the economic agenda.
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I think it is an sro. When I looked at it it still had one tenant. Would have to change the c of o. Nice quiet street, ubfortunately marred by a few guys selling drugs across the street.
Isn’t that technically Bed-Stuy?