Overpricing Not Working in Carroll Gardens
“What the heck is going on in Carroll Gardens?” we asked back in January. Our question was prompted by a rash of ridiculously priced townhouses in the area. Well, since then, three out of the four houses we looked at that day woke up to reality and one is still clinging to its delusions of…
“What the heck is going on in Carroll Gardens?” we asked back in January. Our question was prompted by a rash of ridiculously priced townhouses in the area. Well, since then, three out of the four houses we looked at that day woke up to reality and one is still clinging to its delusions of grandeur. 329 President has since been reduced by $605,000 and 78 3rd Place by $795,000; 44 1st Place, the nicest and biggest of the batch, appears to be off the market.
What the Heck Is Going On in CG? [Brownstoner] GMAP
HOTD: 40 2nd Place [Brownstoner]
HOTD: 78 3rd Place [Brownstoner]
HOTD: 44 1st Place [Brownstoner]
Here is what Buffet and Munger were saying about real estate back in 2005 (when it was obvious to most smart people that a bubble was in full swing)
On real estate
Buffett: “A lot of the psychological well being of the American public comes from how well they’ve done with their house over the years. If indeed there’s been a bubble, and it’s pricked at some point, the net effect on Berkshire might well be positive [because the company’s financial strength would allow it to buy real-estate-related businesses at bargain prices]….
“Certainly at the high end of the real estate market in some areas, you’ve seen extraordinary movement…. People go crazy in economics periodically, in all kinds of ways. Residential housing has different behavioral characteristics, simply because people live there. But when you get prices increasing faster than the underlying costs, sometimes there can be pretty serious consequences.”
Munger: “You have a real asset-price bubble in places like parts of California and the suburbs of Washington, D.C.”
Buffett: “I recently sold a house in Laguna for $3.5 million. It was on about 2,000 square feet of land, maybe a twentieth of an acre, and the house might cost about $500,000 if you wanted to replace it. So the land sold for something like $60 million an acre.”
Munger: “I know someone who lives next door to what you would actually call a fairly modest house that just sold for $17 million. There are some very extreme housing price bubbles going on.”
11:43 Warrent Buffet – Net Worth $62 Billion. – lives in the same house in the central Dundee neighborhood of Omaha that he bought in 1958 for $31,500, today valued at around $700,000. How the hell is he worth $62 Billion if his house is only $700,000? I thought buying a house was the only way to amass wealth? WTF???? Get a clue!
9.07 – sorry to irk you so much, but having others live in your house for financial reasons is declasse.
11:43 Excellent point! All the wealthy people in the world are only wealthy because of the house they own! Brilliant insight and analysis! You are an idiot. Go get a government loan so you can get some education.
8:47 stfu about what you do with your 1 story stable conversion. you shouldn’t play both sides.
7.33 – thats seedy. yuck.
other people living in your house..
You do that because you need to, not because you want to.
Heath Ledger rented. And look what happened to HIM!
He DIED!
If you rent, you DIE!
Heath Ledger rented and he was rich. So do zillions of other rich folks.
One of two things are going to happen soon.
1) Townhouse prices in Brooklyn tank.
or
2) Rents in Brooklyn skyrocket
Either way, despite current economic maladies, eventually the price/rent ratio will even out — economics 101, baby!
Question the CG Cornice Snatcher. Perhaps he/she/it also took the grocery store.