Douglass Street Doubleshot Auction
Two troubled houses on Douglass Street in Carroll Gardens are hitting the auction block on Monday. Number 78, which was a House of the Day in June of last year, has a minimum bid of $945,000 and Number 47 starts at $700,000. Who’s in?
Two troubled houses on Douglass Street in Carroll Gardens are hitting the auction block on Monday. Number 78, which was a House of the Day in June of last year, has a minimum bid of $945,000 and Number 47 starts at $700,000. Who’s in?
I think it really is as simple that, BHO: folks who disagree with you (myself included) don’t think prices are too high. Prices are in the ballbark of correct, and poised to appreciate over a 5+ yr holding period.
To oversimplify a bit (but the point still remains), we’re talking about real assets of a limited quantity. There are only so many townhouses/brownstones in desirable neighborhoods. Folks seem to want them, and I’m sure you know what happens when demand is high and supply is limited.
Folks go on about low rates because low rates entice the marginal buyer and increase demand even more. Yes, to some extent higher rates will deter the marginal buyer, but (to those who disagree with you) that effect is outweighted by the much greater base demand for these properties (at ANY _reasonable_ rate) simply because NYC is growing, Brooklyn is in a secular uptrend, and you simply can’t create more Cobble Hill brownstones from whole cloth.
Your average rent comparisons based on national data or outdated Brooklyn comps (from when Brooklyn — and NYC, really — was a very different place) are meaningless. Of course prices _can_ fall further from this point, but that would require another severe downturn in NYC, something that reverses the secular trend in, for lack of a better word, Brooklyn becoming “hip”, or some other demand shock much more severe than interest rates drifting up…
“BHO is correct that there should be a substantial risk discount.”
I was referring to risk with respect to mortgage rates. Fed/Gov are keeping them down through MBS purchases but that can’t last forever. Burden on private market will come back but at higher risk and therfore higher rates.
To your point, outsiders pay retail at auctions. I’m an outsider – that’s why I don’t go goo goo gah gah over foreclosures. You end up paying market rate for either a move-in (rare, usually absorbed by shortsales) or having to fix up a total wreck that the insiders know not to touch after it gets bid up.
***Bid half off peak comps***
Paul Volker tackled stagflation, not growth. And no, home prices were not sky high in the late 70’s. Food and energy prices were. Agreed, we don’t have stagflation now, just deflation. If we get hyperinflation, the same thing’ll happen – spiking food/energy prices (possibly even bartered if dollar collapses) but stagnant or falling home prices (no hitter). You stated that “8% mortgage rates could only happen in a very different and much stronger environment” so I used the Volker era to refute you.
Adam – Again, economy wasn’t rocking under Volker’s tenure (stagflation as in high prices but no growth and therefore high unemployment). Your theory fails retroactively. Aside from that, Bond Market 101: if it collapses, rates spike (risk, remember?)
“I believe now is the time while rates are low and uncertainly is still reigning.”
Rates are low…rates are low…rates are low…
What about prices? Are they low? Hell no! You’re smarter than that, Adam. Are you not saving? You can outsave interest rate hikes. More money down on a cheaper house. Same monthly payment or less but upside on resale.
Why do you people persist to scream low rates but be quiet as kept on high prices? (oh, that’s right, you don’t think they’re high) It’s better to buy at higher rates (prices eventually but automatically correct lower) so you can refinance to lower ones? Low rates are what made these astronomic prices possible.
***Bid half off peak comps***
also interesting that the mortgage was a 15% , interest only loan. Whole thing sounds like screwballs. And that is why never entered into sales contracts.
just guessing. The mortgage on props is very low compared to value. Could take a court order to dispose of property in hostile partner breakup situation or maybe even divorce settlement.
Petebklyn, I am going to check both out. Cant tell much about either.
This seems to be a bankruptcy court sale – not a foreclosure. Where you are getting the family feud idea?
Not sure what the tenant situation is, but if there are tenants, I wont touch it.
If the open houses are well attended, I probably wont bother bidding. Also, BHO is correct that there should be a substantial risk discount. Anyone who pays retail at an auction is foolish.
It’s econ 101 BHO. The economy would have to be rocking to produce 8% rates.
10 years is a long time. I don’t see rates moving much higher until the economy strengthens and when the economy is strong there will be more demand for premium homes. We very well may see 8% or even higher but not until a full recovery.
I’m saving every penny I have right now to get into a townhouse over the next year because I believe now is the time while rates are low and uncertainly is still reigning.
which one or both interests you, DCB?
From what I surmise, the props were inherited. And owner had lived, maybe still does, at #47. Took out some loan, maybe a partnership and worked on #78. There has to be some big family problem going on and someone refused to sell. As said before, I didn’t see any foreclosure..just tax liens. I can’t make sense of it.
BHO, I think house prices might go down, so you and I are sort of in agreement on that.
The rest of what you are saying I cant figure out at all.
Paul Volker is known for tackling huge inflation. House prices were sky high as were all real assets.
We are nowhere in the same universe as that now, but if one was to buy a house today, take out a mortgage, and then inflation re-emerged, you would be paying off an appreciated asset with depreciated dollars. GRAND SLAM!
I am not predicting anything like that, but it seems that you are.