Friday, April 1, 2011

Prices on the Rise: 632 Baltic Street

"If at first you don't succeed, try, try again."

Some properties that find it hard to sell at one price do the logical thing and continue dropping their price until they can lure a buyer. Post-crash casualty 368 Park Place is a good example. This other place has been dropping $100K every week since it came out. Other properties flip the script and actually raise their prices in the face of not being able to sell. Now to the untrained eye, this isn't intuitive at all. It's like, "Oh, you don't wanna buy ice? Well, let's see if this Eskimo does..."

But it's actually a technique that one agent explained to me supposedly deters lowball offers and increases the sellers' chance of netting the real number they want. We've seen price raising employed so far on the immaculate 54 St. Felix and on the absurd 347 Greene. But today's entry 632 Baltic has raised its list price from $1.4M in November of 2010 to $1.51M on 3/7/11. Which is even sillier to trained shoppers like us, because during that exact same stretch, a much superior neighbor just a few doors up (and one of the best buys in Park Slope this year) listed for $1.499M, went into contract, and sold.

So who's going to pay more money for something that's not nearly as good? Sure, the garage might be a perk to someone. The 22' x 50' floorplate leaves enough room for some healthy 3BR rentals with pretty good income potential. The building was built in our lifetimes, unlike many of these old buildings with dated plumbing and electrical issues. The interior is very live-able, but dated:

But 645 Baltic was such a better play, it's hard just psychologically to get our heads around worse house for more money on the same street. This kind of property, while replete with certain upsides for some buyers, will never sell like a brick or brownstone. And you'd walk past a better buy everyday on your way to the train. Even if the numbers work investment-wise, who wants to make that glutton for punishment purchase?

Pro's: 3BR rentals, rental income, tucked into a quiet corner of Park Slope, close to trains, close enough/far enough from the arena, garage, newish construction, turnkey

Con's: curb appeal, price is going up, dated interior, best buy on that block already happened, can't sell like a brick or brownstone (not now, or for the future owner)

Ideally: you got 645 Baltic, or you're looking for more out of your $1.5M

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