Last Week's Biggest Sales
1. BROOKLYN HEIGHTS $3,895,000 80 State Street GMAP (left) This 4,550-sf, 2-family was first listed for $4,950,000 in late 2008, according to StreetEasy, and the price was cut a number of times until it was asking $3,895,000 last September. Ad said: “Rare opportunity to own a 25-foot-wide Gothic Revival 1850’s Brooklyn Heights townhouse with original…
1. BROOKLYN HEIGHTS $3,895,000
80 State Street GMAP (left)
This 4,550-sf, 2-family was first listed for $4,950,000 in late 2008, according to StreetEasy, and the price was cut a number of times until it was asking $3,895,000 last September. Ad said: “Rare opportunity to own a 25-foot-wide Gothic Revival 1850’s Brooklyn Heights townhouse with original details intact. Grand double parlor with exquisite moldings and original pocket doors, three wood-burning fireplaces, and rooms flooded with superb Southern-facing light…” Its seller bought it for $3,300,000 in 2005. Entered into contract on 10/1/09; closed on 1/5/10; deed recorded on 1/27/10.
2. COBBLE HILL $3,200,000
243 Kane Street GMAP (right)
As covered last week, this renovated townhouse was originally asking $2,950,000 in ’07, but the price was raised to $4,075,000 in mid-’08. As it lingered on the market, the price was reduced several times until it was last asking $3,500,000 as of mid-’09. Its seller bought it for $1,802,000 in 2007. Entered into contract on 1/15/10; closed on 1/15/10; deed recorded on 1/28/10.
3. BROOKLYN HEIGHTS $2,995,000
20 Grace Court Alley GMAP
As previously noted this 2,550-square-foot brick house was originally asking $3,300,000 and the widget appraisal came in at $2,766,135. Its sellers bought it for $2,675,000 in ’05. Entered into contract on 11/17/09; closed on 1/15/10; deed recorded on 1/28/10.
4. PARK SLOPE $2,125,000
524 2nd Street GMAP
When this 2-family was a House of the Day in October, it was listed for $2,375,000. The reader widget guess on it was $1,952,045. Entered into contract on 11/5/09; closed on 1/11/10; deed recorded on 1/26/10.
5. FORT GREENE $1,870,000
119 Fort Greene Place GMAP
When this brownstone was a House of the Day in November, it was listed for $1,995,000. The reader widget appraisal clocked in at $1,615,042. Entered into contract on 11/25/09; closed on 1/7/10; deed recorded on 1/27/10.
Photos from PropShark.
As usual lately I wonder who it is buying these places. Given the amount of time I spend in the Heights though, perhaps those answers are not long in coming.
I doubt whoever brought any of the above properties cares about buy/rent ratios. It’s not like they’re getting a mortgage based on the garden apartment’s monthly roll.
That being said there is a finite # of those people as well as finite number of props that fit the “gotta have it at all costs” mentality.
11217 the really delusional part is the idea that the sale price would fall to those levels and the rental price would stay the same……
No question sale prices exceeded rents on the way up so they should fall more but if the sale price of a PS condo falls to around $333 a sq ft (from around $800 peak, and around $650 today) then rents arent going to be in the $3.30 per sq ft/ per mo range either…..
“fsrq – Just because Knakal didn’t include brownstones in their samples, it’s different? Brownstones aren’t your typical singlefam bungalows you see spread out through the US.”
Yes its different because the owner is not going to LIVE in an investment grade property….when I buy a property for investment, I dont give a flying f if the stairs are too steep for my geriatric dog or if the bathroom tile is my wife’s taste – I just care what it will rent for and what my return will be after financing (and the financing amount will be based on the RR). When I am buying a brownstone to LIVE in (even if I am going to rent out part of it) I care about those things and ALOT more – what school, is it near MY train, are the ceilings high enough for me and my tall family, etc, etc, etc….and when I find the brownstone I like best I am willing to pay MORE (depending on my income) because it FITS ME and I am likely to be unable to find a perfectly substitutable rental.
Its really not that hard to understand, and again I am not saying that their is no correlation between rents and purchase prices only that the correlation is often weak and no matter the multiple is almost ALWAYS higher for individual unit than investment property.
“You think they are going to be selling for 270-340K”
FSRG, I think they do think that. And that is truly the delusional part.
Totally agree with your post, 100%.
More4Less – I totally agree. And I also think the biggest discounts now can still be found in these less prime properties – whether something needs significant renovation, is on a less desirable block etc. But even for the more prime properties in good hoods, I think there is as much the possibility of continued price erosion as stabilization – no one really knows for sure, though the line on the graph continues to point down. The rare trophy property may be totally exempt, however – though those are by definition rare.
Sorry Peter didnt realize
Look BHO (and Col Steve) if you want to wait until individual units are priced at 10x rental equivelant – go for it, but in terms of condos/Coops you are talking far far more than 50% off in prime neighborhoods like PS BH etc….
Think about it – what does a 900 sq ft 2br condo rent for in PS 2,700-3,400? You think they are going to be selling for 270-340K – good luck on that – but they werent selling at that multiple 10 years ago (and then the rent was less and would be again if the sale price was that low)…..
There are metrics that can tell you long-term valuations but if you insist on using one that clearly has no historical validity (10X rental equivelant) than I am afraid you are going to be waiting a very long time until prices reflect your perception of fail value (maybe forever) – and I am no RE bull
Dave, what your current GRM and was your GRM when you purchased…. That’ll put you right back into the mix
Sorry I missed this so far. has my name been taken in vain yet???