Open House Picks

I went to the Crown Heights open house. Since the Corcoran site did not have interior pictures of the house, I wasn’t expecting much. I live a few blocks away and after seeing what you get for 925K, I thanked God we bought our house a couple of years ago. I cannot believe the prices, but I wouldn’t be extremely hurt if they sold it for asking. The house on New York Avenue looks very nice from the outside and could be really nice on the inside. If I were a buyer, I’d rip down the garage in the back and make a bigger backyard. We can all balk at the idea of paying 925K for this house, but someone will buy it (maybe not at asking) and restore it back to its original layout and it will be gorgeous! I think for the size, and the fact that it is on the corner, the price could be worse. I’ve seen worse houses in Crown Heights and they were still asking a lot of money. Once when we wanted to buy a house elsewhere in Brooklyn, we thought there would be too much renovation to do and we thought the price was too high. We passed on it and we were sorry when we actually got out there and saw that we would have to pay that amount in general. The people who bought the house renovated it and it looks great. I still regret it.

Regarding the PH house, it is funny to me how many properties in prospect heights, fort greene and clinton hill real estate is reaching the 1.7 to 1.9 million range. I compare them to similar properties in Carroll Gardens and I start to question how much the prices are really based on the neighborhoods amenities or on the momentum of the market. Just my opinion, but I think Carroll Gardens has a lot more to offer yet prices there are somewhat lower for comparable properties.

Re: 258 New York Avenue. I was surprised by the condition of this house, considering the asking price and the location. There was a lot of shoddy renovation done over the years. It seems there was no attempt even to dress up the place, short of a perfunctory clean-up. Interior decorating aside, I can’t imagine anyone buying this house and not wanting to remodel the kitchen and the bathrooms, at the very least. While it’s not falling apart, there are many rough edges. Furthermore, the agent volunteered that the boiler likely needs replacing. As far as the location is concerned, this area varies greatly from block to block. This address is on the corner of an interesection where two bus routes meet. Some may see it as convenient, others as a noisy nuisance. Indeed, this is not one of the nicer stretches of the ‘hood. but adjacent blocks are more appealing. The area is slow to gentrify, which may be an indication of stability. Please look at “A Jewel in the Crown” in My Brownstone to see what you can expect even just around the corner.

Linus, I agree that prices in certain neighborhoods often increase by much more than salaries and inflation as a neighborhood becomes “nicer,” or more gentrified. In my experience, inflation-adjusted values in Park Slope increased by 5x over the decade leading up to 1987 (love that http://www.bls.gov inflation calculator!). So that’s certainly more than the 3x inflation-adjusted increase in Prospect Heights, though over twice the amount of time.

During the slump in the late 80s/early 90s, the increase in values in the Slope dropped to about twice the inflation-adjusted initial investment. The increase didn’t reach 3x the inflation-adjusted initial investment until around 1997 or 1998.

To me, it seems like a 3x increase over 20 years is much more sustainable than the same type of increase over 5 years. I know Prospect Heights is now much “nicer,” but has the neighborhood really gentrified as much in 5 years as Park Slope did between the 70s and the 90s?

I’d guess values in the Slope have probably increased by 2x from 2000-05, which I suppose may be even less reasonable than the 3x increase in Prospect Height, as the Slope hasn’t really shown the same type of improvements as PH during that time.

Sorry to bring it all back to the Slope, it’s just my point of reference for retrospective brownstone values.

Thinking about the Prospect Height house for $1.7 million reminded me of the new condo construction in Park Slope, where there was a 3 bedroom on Seventh Street between Third and Fourth Avenues. Listed at $1.7 million in late July.

Guess what? Not only is it still on the market a month later, but it’s been knocked down to $1.3 million. That’s a 25 percent reduction in a month.

Of course, that was really delusional pricing — the Prospect Heights house seems much nicer all around. But I do think it’s a good indication that reach-for-the-sky prices aren’t working anymore.