Last Week's Biggest Sales
Fort Greene, South Slope dominating. 1. BOERUM HILL $3,175,000 209 Dean Street GMAP (left) This house last sold for $1,840,000 in mid-2005 and was asking $3,250,000 when we had it as an open house pick in February. 3-story, 1-family, 3,584 square feet in all. Deed recorded 6/23. 2. FORT GREENE $3,055,500 275 Adelphi Street GMAP…

Fort Greene, South Slope dominating.
1. BOERUM HILL $3,175,000
209 Dean Street GMAP (left)
This house last sold for $1,840,000 in mid-2005 and was asking $3,250,000 when we had it as an open house pick in February. 3-story, 1-family, 3,584 square feet in all. Deed recorded 6/23.
2. FORT GREENE $3,055,500
275 Adelphi Street GMAP (right)
Asking $2,995,000 when we had it as a House of the Day in January. It’s a five-story, three-family house that was purchased for $1,300,000 in 2003. Deed recorded 6/23.
3. SOUTH SLOPE $2,000,000
419 13th Street GMAP
This baby was asking $2,100,000 when it was listed in March, according to StreetEasy, and it went into contract in May. 3,000-square-foot single-family. Deed recorded 6/27.
4. SOUTH SLOPE $1,950,000
444 12th Street, Loft A GMAP
Deal here was for a loft condo plus parking space in the Ansonia Clock Works building. This unit is 2,035 square feet, according to Property Shark. Deed recorded 6/23.
5. FORT GREENE $1,900,000
136 Lafayette Avenue GMAP
Three-family, 3,528-square-foot house was originally listed for $2,350,000 last fall, according to StreetEasy. Deed recorded 6/24.
Photos from Property Shark.
The beauty of comparing rents to purchase prices is that rental values, in a fairly open market such as we have in (destabilized) NYC, will capture neighborhood changes, urbanization, crime decreases, job markets and so on — without the distortion of people overpaying because they think that prices are going up or underpaying because they think that prices are going down.
Renters pay for current value, not for guesses about the future (that’s what makes the “bitter renter” ranter so angry at them: he thinks that grasshoppers should always die and that ants are guaranteed survival just because they are less happy). So they are a good way of figuring out how much of the market is fluff/hysteria/”liberal media”/boosterism hype/etc and how much is really that NYC (or PS) has become a more attractive place for affluent people.
Even if some people will only buy houses or only live in doorman buildings, or some will only own and others only rent, so long as enough people will switch based on value or investors can convert one type of building into another, the market will eventually adjust towards equilibrium, in which values are roughly equivalent.
In my neighborhood, rental costs are half of purchase costs, even after adjusting for quality and especially at the higher end. Purchase to rent ratios are well over 25. If they are 11-15 in yours, buying is probably fairly safe, assuming you can sit out the Wall St bust, the credit crunch, and the possibility that the housing market will overshoot on the downside as those things work through.
Three million dollars to live next to all you Ass Hats. Damn Lew weaze.
These prices are making me almost crap my pants. It is disgusting. Those prices so, what you can live in NY. I just can’t believe it has come to this.
Time to move to Texas where I could buy fifteen huge houses for that money.
I know, good riddance to me. But who is buying these damn houses?
People – we are looking for a townhouse in Park Slope and have had numerous brokers tell us to make an offer, any offer on a number of houses that are clearly not going to get anywhere close to their asking prices. A quick glance at Corcoran will show that yes, even Corcoran has been caving in and lowering prices. So those who say it can’t happen in NYC are just plain wrong. Not saying the world will end or prices will plummet, but I think 10% decreases are easily forseeable, if not more. We sold our apt a few months ago so we are not “bitter renters” (in fact, we are very happily renting now while we look for a house, and content in the knowledge that when we find one, we won’t have the stress of *having* to sell in this market, since we know people in that position and they are having to accept less $ than hoped for). We’re not holding our breaths for a reversion to 2003 prices but we’re also seeing a lot of evidence that things can slide back quite a bit. And for those who say we’re at the bottom now, we really are not – if anything, the shift in the market is only starting. Prices have been astronomical up through this spring, and are still high, probably because now brokers/sellers are factoring in that buyers will not offer ask, but expect at least at 10% discount… But then properties linger and have to have a 10% price cut anyway, and then still linger…The sellers who will do well are the ones who realize that yes, demand is out there, and you can still make lots of money on your property (assuming you bought before 2005) if you price it realistically – heck, you may even get a bidding war, but the key really is a price point that makes sense and takes into consideration the weakening market…
“Well, obviously some houses are still selling at bubble prices”
Yup, it’s the same bubble you swore was gonna burst back in ’96 so you DIDN”T buy that PS brownstone for $250k. You’re a deluded BITTER RENTER and you always will be!
i’m not saying that brooklyn is cheap but compare it to cities like london, tokyo, or rome and you will find it not that crazy expensive, so if you don’t like the prices and you want to buy something maybe you should look somewhere else.
I said it before and I’ll say it again, the housing slump is indeed a problem, but it is not the entire US economy. What’s more, some locations will not be greatly influenced by the credit crunch/subprime meltdown. Much of this was overstated from the beginning, by a liberal media eager to finally see the Bush economy fail. And yet it hasn’t. To the utter anger and annoyance of those who want to blame Bush for everything from the black plague to the end of times. Bottom line is, there was a severe subprime mortgage meltdown which managed to slow the economy but not sink it. Much of the economic loss has been absorbed and discounted by Wall Street by now. Add to that mix, an overdemand for oil and raging liberals and you have the widespread media fed panic of a meltdown.
It doesn’t help that we have assclowns like the one who regularly posts here, stirring up more fear with their “sky is falling” mentality. Still, we are in the midst of a worldwide economic boom, and the US is a pretty large part of the world economy so we are not sunk. Still no recession and most economists including the fed say there will not be one. sorry libs (but that won’t stop them from saying we are doomed, anyway).
Add it all up and you see that housing prices are softening but not crashing, forclosures are up but not at mass exodus levels, rental markets are strong and prime housing areas of NYC remain prime.
As usual, the truth stands between both ends of the spectrum of lies that so typically characterize our economic and political discussions these days. Unfortunately, as long as most of the US only relies on the traditional liberal-slanted news sources, the disconnect between the hyperbole and the reality will continue, as will the growing resentment between those that own property and those that are resentful that they can’t own in prime areas.
Solution, read the Wall Street Journal AND The NY Times. If you want to own, consider a brownstone in softer areas like crown heights and bed-stuy. Fort Greene was considered “marginal” even 20 years ago, after all.
Well 6:15,
There will be lots of boohooing in Brownstone Brooklyn by all those who paid 15x and 20x annual rent if your predictions hold true… But it also seems there is a premium being paid for the privilege/status issue tagged to buying in Brownstone Brooklyn that needs to be factored in. Admittedly, the people who paid 650-950K for homes in parts of Queens and Staten Island (and admittedly parts of Brooklyn) are those who are suffering right now, esp. the new constructions. But you have to look at it neighborhood by neighborhood. Frankly, the rents are so high in parts of Brownstone Brooklyn, the prices to own are not too far off from the 11x and 15x figure. I just did the calculation for a number of houses in FG which I know well. I found the sale prices are not that far off from the rent rolls x 12 to 15.
Not all sale prices are very sane right now, no. Some houses went for vanity prices. If one can afford a 3m house in FG, enjoy. It’s definitely a status thing. Those homeowners will probably not be relying on the rental income.
Heck, personally, we are fine paying more than we might to rent. We are “chez nous†and like it that way. Maybe if you’re weighing renting a 2-bedroom to buying a 2-bedroom, renting would make more sense. I don’t know. But owning a brownstone/townhouse is something else. Frankly, it would be fascinating to do a study on people’s attitudes and their “consumer confidence†from group to group: renters and owners in all categories (studio renter to brownstone owner to absentee landlord, to new high-rise coop owner or renter)…sounds like a grant-writer’s special. Anyone out there who can write a wicked grant.proposal?
I would argue there is tighter market for rentals in NYC than in the other cities you mentioned. I don’t feel you are correct in your statement that “you can rent in every neighborhood and at every quality level.†But, I may be wrong. Maybe you can rent a brownstone if you nose around…somehow there just don’t seem to be that many available in BB or that many people even interested in renting a house. If someone wants to rent and not buy due to work/life/expected residency, most families who could afford to buy a brownstone might simply rent a big 3 or 4 bedroom apartment, though I hear those are hard to come by as well. Why would someone transferred to NYC for work with the clear possibility of moving in 5 years buy a brownstone? They’ll probably rent a large apartment and call it a day…and yes, rent in Park Slope (I know people in this category).
Also, another reason apartment-living is less desirable in NYC, it seems a majority of rentals in older housing stock is rather blechy and as a renter, you can’t do much about it. At the high end of the spectrum (say on the UES) if you want to rent a whole brownstone you pay a major premium. I believe it’s the same in Bklyn Heights. Also, in terms of renting, a lot of the apartments in Manhattan in desirable areas are coops with fairly stringent rental policies keeping those units out of the general pool.
Remember to keep in mind something else: you write, “at the peak of the last cycle, I paid 11 times annual rent…†I’m not sure what cycle you’re referring to, but think, for a moment, if you bought for 11x annual comparable rent for your home and if that cycle you’re referring to was the downturn in 1990, then, reflect that you’re well on the way to being done with a 30-year mortgage (if you have one), have a great equity stake, can do what you want to your home as the owner, may even have much lower carrying cost now than if you had been renting all along and had to keep paying rent increases year-over-year.
Listen, as more and more existing rentals in NYC are being “destabilized”, rents hitting new highs in Brownstone Brooklyn, etc. the cost of ownership with the added intangibles of status, perceived investment, etc., the pressure on the rental market will continue to put pressure on the real estate market in general. Plus, demographics has pushed the desirability and competition for Brownstone Brooklyn. The very last boomers (b.1962) in their mid-forties are actually vying with the immense wave of the 30-something boomletters (born in the 70’s to the earlier boomer born after WWII). The boomlet is just in full swing and the “stroller phenomenon†will go on for another good 5 to 10 years as the kids born in 1987 hit the housing market. The twenty-somethings have already made their presence felt and there plenty more in the pipeline behind them ready to fill their shoes/apartments.
Thanks for your thoughts. It made me do some thinking, as you note above. I don’t refute your premise that we may go back to historical levels but, that level in desirable areas may settle at the x15 mark and a city like NYC may have many real estate pressures not at play in the cities you mention above. Of course, people will point to the fact that NYC’s population has not grown very much but I have felt that those demographics figures are a bit incorrect, that many people go uncounted. And anyway, raw numbers do not usually take into account the sift in demographics which are at play causing neighborhood shifts.
FGG
Well 6:15,
There will be lots of boohooing in Brownstone Brooklyn by all those who paid 15x and 20x annual rent if your predictions hold true… But it also seems there is a premium being paid for the privilege/status issue tagged to buying in Brownstone Brooklyn that needs to be factored in. Admittedly, the people who paid 650-950K for homes in parts of Queens and Staten Island (and admittedly parts of Brooklyn) are those who are suffering right now, esp. the new constructions. But you have to look at it neighborhood by neighborhood. Frankly, the rents are so high in parts of Brownstone Brooklyn, the prices to own are not too far off from the 11x and 15x figure. I just did the calculation for a number of houses in FG which I know well. I found the sale prices are not that far off from the rent rolls x 12 to 15.
Not all sale prices are very sane right now, no. Some houses went for vanity prices. If one can afford a 3m house in FG, enjoy. It’s definitely a status thing. Those homeowners will probably not be relying on the rental income.
Heck, personally, we are fine paying more than we might to rent. We are “chez nous†and like it that way. Maybe if you’re weighing renting a 2-bedroom to buying a 2-bedroom, renting would make more sense. I don’t know. But owning a brownstone/townhouse is something else. Frankly, it would be fascinating to do a study on people’s attitudes and their “consumer confidence†from group to group: renters and owners in all categories (studio renter to brownstone owner to absentee landlord, to new high-rise coop owner or renter)…sounds like a grant-writer’s special. Anyone out there who can write a wicked grant.proposal?
I would argue there is tighter market for rentals in NYC than in the other cities you mentioned. I don’t feel you are correct in your statement that “you can rent in every neighborhood and at every quality level.†But, I may be wrong. Maybe you can rent a brownstone if you nose around…somehow there just don’t seem to be that many available in BB or that many people even interested in renting a house. If someone wants to rent and not buy due to work/life/expected residency, most families who could afford to buy a brownstone might simply rent a big 3 or 4 bedroom apartment, though I hear those are hard to come by as well. Why would someone transferred to NYC for work with the clear possibility of moving in 5 years buy a brownstone? They’ll probably rent a large apartment and call it a day…and yes, rent in Park Slope (I know people in this category).
Also, another reason apartment-living is less desirable in NYC, it seems a majority of rentals in older housing stock is rather blechy and as a renter, you can’t do much about it. At the high end of the spectrum (say on the UES) if you want to rent a whole brownstone you pay a major premium. I believe it’s the same in Bklyn Heights. Also, in terms of renting, a lot of the apartments in Manhattan in desirable areas are coops with fairly stringent rental policies keeping those units out of the general pool.
Remember to keep in mind something else: you write, “at the peak of the last cycle, I paid 11 times annual rent…†I’m not sure what cycle you’re referring to, but think, for a moment, if you bought for 11x annual comparable rent for your home and if that cycle you’re referring to was the downturn in 1990, then, reflect that you’re well on the way to being done with a 30-year mortgage (if you have one), have a great equity stake, can do what you want to your home as the owner, may even have much lower carrying cost now than if you had been renting all along and had to keep paying rent increases year-over-year.
Listen, as more and more existing rentals in NYC are being “destabilized”, rents hitting new highs in Brownstone Brooklyn, etc. the cost of ownership with the added intangibles of status, perceived investment, etc., the pressure on the rental market will continue to put pressure on the real estate market in general. Plus, demographics has pushed the desirability and competition for Brownstone Brooklyn. The very last boomers (b.1962) in their mid-forties are actually vying with the immense wave of the 30-something boomletters (born in the 70’s to the earlier boomer born after WWII). The boomlet is just in full swing and the “stroller phenomenon†will go on for another good 5 to 10 years as the kids born in 1987 hit the housing market. The twenty-somethings have already made their presence felt and there plenty more in the pipeline behind them ready to fill their shoes/apartments.
Thanks for your thoughts. It made me do some thinking, as you note above. I don’t refute your premise that we may go back to historical levels but, that level in desirable areas may settle at the x15 mark and a city like NYC may have many real estate pressures not at play in the cities you mention above. Of course, people will point to the fact that NYC’s population has not grown very much but I have felt that those demographics figures are a bit incorrect, that many people go uncounted. And anyway, raw numbers do not usually take into account the sift in demographics which are at play causing neighborhood shifts.
FGG