Thursday, January 19, 2012

Time to Ball: 596 3rd Street

The pent-up demand in Park Slope is making its presence felt. Out just two weeks ago, 596 3rd Street has already endured over 30 appointments, a bidding war, and is in contract above asking price. For our part, when we first saw this 18' x 38' single-family home with an exterior that looks like grampa's argyle socks, we weren't chomping at the bit or anything.

Then the interior wasn't quite calling our names either. The flagship interior photo was this one:

And then a bunch of so-so mantles:

Yet it's certainly on the block just off the park, in a stretch with stately neighbors asking almost $4M. Is this the 2,476 sqft Park Slope buyers had been waiting for? A tiny single-family shell for over $1.8M that needs at least $500K in work to get up to speed for most users in this genre? One reader told us they weren't interested in paying the "park block premium" on this one, and their point was well taken. Another reader wondered what we thought of the $750/sqft price tag. While the median price per square foot for homes sold in the past 6 months in Park Slope has been $622/sqft, this article demonstrates how getting bogged down in metrics sometimes can be deceiving when there are so many other intangibles to consider. And we tend to think that the type of buyers who could bear a ~$2M purchase and ~$500K-$1M renovation, the majority of which would have to be in cash, wouldn't necessarily quibble over a $100K or two.

Almost regardless of the state of the economy, the haves still have, and these purchases should be no surprise. Park Slope remains the flagship neighborhood in Brooklyn, and still costs a fraction of what townhouses in comparable residential parts of Manhattan cost. For people looking at $10M townhouses in the West Village, $1.86M or more still looks like a paltry price to pay. We don't think people with the kind of cash to make this happen are necessarily deterred by the macro-economics in the country at the moment. Especially if they find themselves bidding against each other. Indeed, Mitt Romney recently points out that the majority of his income in the past 10 years has come from capital gains from investments made long ago, and that his fresh income from speaker's fees is "not very much". One man's "not very much", totaling just under $375K in the past year in Romney's case, just so happens to be in the top 1% of income in the entire country.

Suffices to say, Park Slope buyers aren't living check to check.

Pro's: Prospect Park block, neighbors worth double, rare product

Con's: curb appeal, needs lots of work, small, original details are "meh", bidding against ballers

Ideally: simply not for us. If we could swing this purchase, we'd want a bigger, prettier shell to start with, or a finished product in a neighborhood with more value for the buck.

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