The Real Deal: A Dose of Reality for Crown Heights Market
Citing some of the discussions on this blog, real estate mag The Real Deal puts the Crown Heights market in its place this month with an article entitled, “Sellers Swallowing Their Pride in Crown Heights.” While not dismissing the nabe’s merits, the basic thesis is that the market got ahead of itself and there’re are…
Citing some of the discussions on this blog, real estate mag The Real Deal puts the Crown Heights market in its place this month with an article entitled, “Sellers Swallowing Their Pride in Crown Heights.” While not dismissing the nabe’s merits, the basic thesis is that the market got ahead of itself and there’re are lots of homeowners with a deluded sense of what their places are worth. (Yesterday’s HOTD is further proof of that phenomenon.) Several brokers are surprisingly frank about clients who insisted on slapping ridiculous prices on their houses, only to have them languish on the market. Here’s a great anecdote:
Kevin McNeill, a senior vice president at Corcoran, is all too familiar with this phenomenon. He points to a three-story townhouse he helped put on the market for $1.2 million back in June. “It was overpriced, but her next-door neighbor had listed at $1.4 million,” says McNeill. “Hers was similar [to her neighbor’s], and when she saw $1.4 million it was hard to talk her off the ledge.” For two months the home languished. Then in August the seller agreed to drop the price by about $100,000, but still it sat. It wasn’t until McNeill convinced her to lower the price below $1 million that the house sold. “The minute we brought it to $995,000, we sold it within days,” says McNeill. “We closed at $960,000.”
The implicit conclusion of the article, which we’d agree with, seems to be that in the new, post-subprime paradigm, $1 million is a huge psychological barrier in Crown Heights, as it is for most of Bed Stuy. But as Corcoran’s McNeill says, “When people talk about price reductions in these neighborhoods, it’s not about the market, it’s about improper pricing.”
Sellers Swallowing Their Pride in Crown Heights [The Real Deal]
Photo by gkjarvis
McNeil is a ham. I’ve been following his listings for the better part of this year. I understand a 50k or 100k reduction like the one he described, as well as the reduction he orchestrated on the Carroll property he sold a couple months back but he’s also the genius that had a listing on President for 1.5 that he cut to a million….and you mean to tell me he didn’t have any say in listing a house 500k over market? He deflects blame well.
It’s pretty simple really. I don’t think it’s a “psychological barrier” but a real, practical, common sense barrier. The neighborhood may be nice and have its pros and cons, but just like in Bed Stuy, and other neighborhoods that are still in transition, you can’t justify paying those prices. It’s what the broker says: “But WHEN PRICES INCH UP, VALUE DISAPPEARS, and suddenly there’s NO DRAW.” (sorry for caps, but I think that hits the nail on the head)
Actually, this is what happened to me with Clinton Hill. I was originally looking in Clinton Hill because it was a beautiful, but cheaper, alternative to Park Slope, but not anymore. The market is out of whack, in my opinion, and there is no reason prices should be in line with Park Slope (amenities, schools, transportation, comparative crime stats). So screw it–I am no longer looking in Clinton Hill. This is not a judgment on the merits of the neighborhood, mind you, just an assessment of the value–what you get for your money compared to other places.
True, 9.99 vs. 10.00 makes a big mental difference, bu this also speaks to the rise in prices extending further out beyond PS, BH, CG, snd such pre-maturely leaving owners belieiving they were taking part in this real estate lottery when in fact they weren’t becuase it was crown heights. Beutifull houses. Sit one of those on the North Slope and you will pay 2-3M. 1.4 would seem cheap, woudln’t it? Location!
I don’t think that Crown Heights has arrived yet. As the article notes, the neighborhood lacks amenities, and the local schools are awful. Plus, you have a lot of low-income housing, which explains the area’s high crime rate. A beautiful brownstone is nice, but if there are no decent places to shop or have a sit-down meal, you’re likely to look elsewhere when making the biggest purchase of your life.
Until these matters are addressed, the neighborhood will continue to lag.
Downtown:
I’m guessing its folks like me, who hit the real estate lottery by being luck enough to purchase in BK when you could still get 2brs for $125k (which is now worth in excess of 7-800K). These folks may have kids and want more room and are looking to take their equity in their Park Slope, Boerum Hill, Brooklyn Heights and Cobble Hill apartments and buy something bigger.
I’ve also read stories, one in the NYTimes I recall, about a couple in Manhattan with a kid who purchased in Crown Heights (they were not Hasidic) in order to get more space for less money.
Oh God…here goes another dude bashing somebody’s neighborhood…ho hum hum.
Tired of all these armchair critics talking bout “every nabe that’s not theirs sucks” like we’re in the fuckin 5th grade again.
Get a life bitch.
The article is merely enlightening us by showing the psychological barriers buyers face with $1M vs the sellers playing chicken with their ask prices.
Got it punk?
I like those houses – are those single large bow-faced rooms upstairs?
For most people…1 million bucks is far from a losing proposition, 10:44.
Please come back to reality.
Most of these people bought their homes for PENNIES.
Lol. I’d have sympathy for them but come on. What did they expect? They should have known better than to buy in Crown Heights. Crown Heights always has been and always will be a losing proposition.