Co-op of the Day: 123 Henry Street
Three things this one-bedroom co-op at 123 Henry Street has going for it: (1) Good location; (2) Nice casement windows; (3) Decent floorplan. Negatives: (1) Zero architectural detail; (2) Home Depot-esque kitchen. Oh, the kitchen. Why do people persist in pursuing these short-sighted attempts at money-saving renovation? A little imagination and creativity go a long…
Three things this one-bedroom co-op at 123 Henry Street has going for it: (1) Good location; (2) Nice casement windows; (3) Decent floorplan. Negatives: (1) Zero architectural detail; (2) Home Depot-esque kitchen. Oh, the kitchen. Why do people persist in pursuing these short-sighted attempts at money-saving renovation? A little imagination and creativity go a long way. In this case, if the kitchen were compelling, it would help downplay the basic-ness of the rest of the apartment. The way it is now, the kitchen only serves to underscore the lack of charm. Not to be all negative: As we said upfront, this place has some good things going for it, enough probably to fetch pretty close to the asking price of $449,000.
123 Henry Street [Corcoran] GMAP P*Shark
Exterior photo by Scott Bintner for PropertyShark
30 year fixed mortgage at Manhattan Mortgage (no points) today is 6.5%.
Just checked.
Also, 11217, it isn’t reasonable to treat your downpayment as free. It costs money too.
Are there 90% LTV mortgages available at 6.5%? If you’ve got one, I’d say grab it fast. With Freddie Mac paying 4.71% for five year money, rates like that aren’t going to last.
What happens to prices if rates go up? Will the hit be taken by buyers paying more or sellers getting less?
Yeah, east river, I suspect you’re right.
And while that sucks for contractors, it will be kind of refreshing to see some kitchens with original features left the hell alone, as well as what is acceptable taste stretch to include options that don’t include stainless steel, granite, and those cutesy cabinets with glass that look like they’re from ikea even though they’re actually from somewhere more high end.
Not that there’s anything wrong with stainless and granite… just — I still have scars from my father’s remodel of a perfectly nice custom galley 60’s kitchen with built-ins into an “island”.
FinanceGuy:
Your figures are off
With 10% down, the mortgage and maintenance is $3,326.00 with a 6.5% interest rate.
NOT 3800.
Add the interest deduction and I’m not sure you’re that far off what it would cost to rent a 1 bedroom of this size in Brooklyn Heights. I know more than 1 person who pays around 2500 for a 1 bedroom in the Heights.
Very good point, Heather. I find it much more fun and creatively challenging to use what I’ve got. Love the word “repurpose.” But I imagine we’ll be seeing less of take-no-prisoners house gutting in the future with the credit crunch on.
Mortgage interest on borrowed part plus opportunity cost on downpayment @ 8% = 2993 , plus 772 maintenance = 3765.
I didn’t check current mortgage rates, so if 8% is too high or too low, just plug in the number you think is better. I doubt that any realistic mortgage number will get you below current market rents, but maybe rents are higher than I think.
I ignored the equity part of the mortgage, since you are paying that to yourself.
An owner should expect to make more on the downpayment than the bank expects on the mortgage, since the owner is bearing more risk. For convenience, I just used the same interest rate for both, although that understates costs to the owner somewhat.
I ignored the costs of repairs that a coop leaseholder but not a renter would have to pay and, conversely, I didn’t monetize the privilege of renovating that the cooperator but not the renter has.
If I were about to buy in this market, I’d also want to be paid for the risk that we are at the tail end of an historic bubble and prices are likely to drop dramatically in the near and not so near term. And the risk that, as Wall Street implodes, Brooklyn Heights rents are more likely to drop than increase in the next several years. Both these mean that the true opportunity cost of the downpayment is quite a bit more than 8%; my own guess is that the likelihood of being able to recover a 10% downpayment in the next several years approaches zero. For prices to return to long-term trend, even adjusting for the increased attractiveness of NYC relative to, e.g., SF, they need to drop (in real terms) by a third, and probably that will happen by a prolonged period of flat or slightly down nominal prices. Unless the city or its economy goes downhill as a result of the finance industry reorganization, in which case prices could head for 1990 instead of 2002.
So, I wouldn’t buy now unless the ownership cost was LESS, not more, than the rental cost. That, of course, was usually the case in NYC from at least the 1940s until the last few years.
I’ve seen crappier condos listing at that price in Bed Stuy… so not sure what’s wrong with the price. However, the fact that the market for one-bedrooms is at an almost flat price point no matter what part of Brooklyn you’re looking in… should tell a prospective buyer something. This location is prime. Because of that, this is a good deal.
And kitchen looks fine to me. I wonder sometimes how people reconcile the trendy green movement with their penchant for ripping out perfectly functional kitchens to create ones.
FinaceGuy – Good point. Brooklyn buyers need to take all these things into consideration.