House of the Day: 466 5th Street
We like the look and feel of 466 5th Street, a four-story house within a gurney’s-roll from New York Methodist hospital. Except for the kitchen, which we’re not loving (just say no to granite!), the house has all the look and feel of an old Italianate brownstone, from the marble mantles to the pocket shutters….
We like the look and feel of 466 5th Street, a four-story house within a gurney’s-roll from New York Methodist hospital. Except for the kitchen, which we’re not loving (just say no to granite!), the house has all the look and feel of an old Italianate brownstone, from the marble mantles to the pocket shutters. Currently configured as a lower owner’s duplex topped by two floor-through rentals, the house has been in the same family for at least 20 years. Now that it’s time to cash out, the owners are looking to get $2,200,000. Think they will?
466 5th Street [Orrichio & Anderson] GMAP P*Shark
Also, it would be rational to pay something for the OPTION of sending your kid to public school . Private schools often don’t work out for particular kids for reasons that are hard to predict in pre-school. And it is quite difficult to switch from one private school to another these days, so having a public school option is worth real money.
How much? That’s hard to say.
But in a bubble market where people think that future price increases are inevitable, they should be willing to pay a great deal, since, as noted in the last post, the option is effectively free so long as real estate prices go up at a rate higher than mortgage interest rates.
Aren’t bubbles wonderful? Once you accept the premise that prices are going to keep going up, it becomes rational (within the irrationality) to pay anything at all.
Actually, if you believe that the real estate market is rising, or at least not going to drop over the relevant 6 years, you could easily justify paying a premium of several hundred thousand dollars per child to live in a good public school district:
If you spend an extra 350k on a house, and expect to get it back when you sell, then the cost is the mortgage interest you pay each year until you sell. At 7%, that would be just about the same as private school tuition for one kid.
So a buyer who is reasonably optimistic about the medium term prospects of Park Slope real estate, and willing to plan to move after elementary school, should be willing to pay roughly 350k *per kid* more to live in PS than in a neighborhood where they would use private school.
Of course, if you think that you might not get back your full $350k, that would make this much more expensive. If you expect prices to drop 40% in real terms over the next 6 years — as many economists suggest is likely — then the cost of the premium doubles, and you should only be willing to pay an extra $175k or so per kid. (And that assumes that you have already decided to buy even though you are facing a huge capital loss).
Conversely, if you think that NY real estate is the best investment you could make, you should be willing to pay even more. Indeed, if you were certain it would go up at least 7% per year, it would be rational to pay as large a premium for PS 321 as the bank will lend you, since the premium won’t cost you anything.
Thus, a premium of half a million or more for a family-sized house in a good school district would not be unreasonable in a rising market. But in a falling market, the rational premium should quickly shrink.
It’s not that people think PS 321 SHOULD command that premium, 11:42. Where on earth did you get that idea? It’s that PS 321 DOES command that premium. Just look at a recent thread about a coop on 3rd Street asking $1.2 million because it’s in PS 321. It’s a fact the properties in PS 321 get more money than other school districts.
Sure, there’s no logical reason whatsoever to pay so so much more money for 5 years in a public school that’s never going to be as good as a private school. But well, that doesn’t seem to matter to some buyers. Go figure. We ourselves purchased more space in better condition for a lot less money in another neighborhood and plan to send our kid to private school. More people will make that choice the more expensive Park Slope PS 321 gets. When PS 321 was still relatively affordable to middle income young professionals, it made sense to pay a little more for a good public school. But it doesn’t make sense to take out a risky jumbo mortgage loan to do it.
Re: 2:59 saying that folks pay a premium of 600K-1million to be in 321 vs. the same house in teh different school district. Sorry, that’s just silly. Private school costs about $25K per year, and 321 (like all NYC elementary schools) offers 6 yrs max to kids – K-5th grade. So the max 321 is “worth” is $150K per kid. Granted, many people have 2 kids, so then *maybe* you can justify a premium of 300K. But that’s assuming a number of things: 1) folks actually think 321 is “worth” as much as private school (which I doubt since even it’s a wonderful school, it still is a crowded public school with a lot of kids for each teacher, struggle with resources etc. Private school’s a whole different story); 2) folks think other schools in the area are worth nothing, which isn’t the case. 39, 107, lottery schools in District 15, even PS 10, 295, etc. are all receiving a lot of positive attention and involvement from parents. So yes, 321 may command some kind or premium, but it is no way near 600K. I would say 100-200K max, depending on the property. I just had to set the record straight since these kind of ridiculous comments are just wrong and people reading this blog for factual information about Brooklyn real estate should disregard such exaggerated silliness.
That’s a bit too harsh, 10:28. The facade needs to be re-done, but so do those of many brownstones in Brooklyn. This house is a nice brownstone in a good neighborhood. But it needs a lot of work. The price is high for a total fixer-upper, even if it’s in Park Slope. Buyers are being more careful with how much money they spend on houses that need a total renovation.
I doubt very much that this will sell except as an income producing property. it is too ugly to live in. Look at that facade. the stones looks like they were the backsplash for a firing squad. The iron bars on every window hint at keeping people in more than keeping them out. The place is for the Adam’s family poor relations.
They’ll get their price. Fools are decreasing but still available.
snack foods are best when served on granite counters. I suspect that those that rail against granite can’t afford it. Granite surfaces are natural, beautiful and quite expensive. I installed granite in my kitchen two years ago and I still get a thrill every time I see it. It took millions of years to form under a mountain, the colors are gorgeous. It is spectacular. The look, the feel, the sheen. There is a reason people pay big bucks for it.
This house would rule if they served muffins and assorted snack foods.