Last Week's Biggest Sales
Sweet premium on the Prospect Heights house. Aside from that, however, it was a pretty sluggish week, with no sales over $2 mil. 1. PROSPECT HEIGHTS $1,820,000 401 Park Place GMAP (left) Asking $1,695,000 when we had it as an open house pick in early March. 2,495-sf, 1-fam house. Deed recorded 6/19. 2. BOERUM HILL…
Sweet premium on the Prospect Heights house. Aside from that, however, it was a pretty sluggish week, with no sales over $2 mil.
1. PROSPECT HEIGHTS $1,820,000
401 Park Place GMAP (left)
Asking $1,695,000 when we had it as an open house pick in early March. 2,495-sf, 1-fam house. Deed recorded 6/19.
2. BOERUM HILL $1,725,000
233 Dean Street GMAP (right)
House originally listed in January for $1,750,000, according to Street Easy, and went into contract in mid-May. 3,780-sf, 4-fam. Deed recorded 6/18.
3. PARK SLOPE $1,485,000
172 Sterling Place, Unit 7 GMAP
3-bed, 3-bath last sold for $1,485,000 almost exactly a year ago, according to Street Easy. Deed recorded 6/17.
4. PARK SLOPE $1,400,000
70 8th Avenue, Unit 1 GMAP
3-bed, 2.5 bath originally listed for $1,595,000 last September, according to Street Easy. Deed recorded 6/20.
5. BOROUGH PARK $1,325,000
1552 55th Street GMAP
2,640-sf, 2-fam house. Deed recorded 6/20.
Photos from Property Shark.
Folks, Gabby misunderstood the ACRIS filing on the Sterling Place unit. There was not a recent sale. It sold last year at $1.485M. For whatever reason, the sale was only just recorded. Her description (“3-bed, 3-bath last sold for $1,485,000 almost exactly a year ago, according to Street Easy. Deed recorded 6/17.”) is correct EXCEPT for the word “last” – this was the only sale. Search block 1058, lot 1207 on acris and look at the actual deed – it’s dated 6/22/07 and was recorded 6/17/08. So the “last sale” that shows up on streeteasy for 6/22/07 is the same one that recently popped up on acris as recorded 6/17/08.
“bankers are getting over the crisis”
Now that’s a real ribtickler.
8:27 – we just sold our place and are renting while we look for a larger place, which means we have a lot of cash in bank. Almost every financial advisor I spoke to said a massive run on the banks was highly unlikely, but yes, if you’re worried, diversify at several FDIC insured banks and/or low risk investement funds (we’re doing that but not in an overly cumbersome way). The risks of your property losing some value from the frothy recent peaks is a much greater danger these days, so if you are planning on selling, you’d be wise to do so ASAP – the interest alone on your sale will probably be more than the potential lost value on your property. This is what we found for ourselves, since our place went over ask a few months ago and despite occasional bidding wars here and there, a much more common scenario these days is places going under ask, or having to cut price…
In the short run, it may be hard for an individual to find a townhouse to rent long term (although there are several for rent right now in prime neighborhoods for far less than purchase costs).
But in the long run, if single family homes sell for more than their rental value (split up or whole, whichever is higher), then investors will buy rental properties and convert them to single family homes.
At equilibrium, single family or owner occupied houses have to be relatively close in price to rental properties (within the cost of conversion), or conversions will continue until they are.
So, if you are trying to figure out which way prices are heading before you buy, you should assume that over the next few years rental value and purchase value will tend to converge. Obviously, it’s only a tendency; sales prices have gotten way ahead of rentals over the last several years, and they could overshoot the other direction as well.
Rents tend to be tightly connected to incomes, because renters are only paying for current services and normally won’t pay more now for promises later (contra the Mynt). Of course, it’s always possible that enough people will decide that NYC is so great that they are willing to pay an ever higher portion of their income to share with an ever larger number of roommates. But somewhere around 100% of income for a “hot bed” flat, some of them will start to see the virtues of LA or San Francisco.
Purchase prices are much more flexible, since sometimes (e.g., last year) banks are willing to help people buy things they really can’t afford on the assumption that they’ll catch up later, or to pay what they imagine will be next year’s price today, and sometimes (e.g., next year), buyers and banks are unwilling to pay even current value because they figure if they wait prices will come down even more.
But even with speculative unpredictability of prices, it’s pretty clear that when purchase prices are above rental value (in any configuration) and above replacement cost, developers are going to make more of the stuff to meet demand.
for 8:27: if you are that worried about safety, or if you are planning to buy relatively soon and will need cash for that, put your money in several banks, keeping under the FDIC limit, or buy T-bills. The only way you lose money doing that is (a) if the federal government goes bankrupt, in which case your problems are going to be much larger than financial losses, or (b) a massive inflation without a corresponding increase in interest rates.
But you’d probably do better with a diversified portfolio of index funds if you are not planning to buy in the next several years.
Actually, there are brownstones to rent – from people who can’t fob them off at the ridiculous prices they are asking. For example, anyone see 64 Prospect Place (see Corcoran site)? Case in point. Been lingering on the market, and now they are seeing if they can rent instead. Good luck to them – they should just cut the price (they jacked it up hugely in one year, which is ridiculous) and be done with it.
Well, we have a budget of up to 2mil to spend on a brownstone (w/a garden rental) but are fine camping out in an economical rental until we find the right one at the right price, rather than overpaying 100-200+K. I’m amazed at some of the crummy houses brokers are trying to sell these days, or the prices asked for mediocre houses. That said, I also know many people who have found perfectly good houses in this price range or far less within the last year, and we see plenty of places becoming more negotiable. I don’t love brownstones so much that I can’t wait a year to find the right one and avoid overpaying, and the market is working in our favor.
There are no brownstones to rent. Having the rent vs. own conversation with regard to that is ridiculous.
Some people love, want to own and live in brownstones.
End of story.
1:11 I agree there are a lot of rentals in the 3k-4k range, but I don’t see what that has to do with $2M houses. For people looking for 2000+ sq ft, outdoor space, and recently renovated kitchens/baths there isn’t much to rent at all.