Saturday, June 2, 2012

Topics: New York Times' Million Dollar Typo

For many people, when it hits the New York Times, it's gospel. Yet even the cherished Times isn't infallible. In this weekend's Real Estate section headline, they've slapped a $1 Million dollar misprint on their online and printed cover article about - ironically - "Brooklyn's Gold Rush". You'd think in an article about rising prices, they'd take the time to get the price right... right?

We told you back in April that 124 Park Place listed for $2.7M and closed quickly for $2.91M. Yet the New York Times has the property listing for "$1,270,000" and closing for "$1,291,000". You'd think they'd have some kind of background check on this stuff before they ran such large numbers on the cover. Don't despair, though. BK to the Fullest always keeps it 100. While Corcoran's whisking multi-million dollar properties out the door for above ask, and the NYTimes is misprinting about it, Platinum Members had over 6 months to take a stab at a 5 story brownstone shell 1 block away for 20-30% less than its current list price.

This "Gold Rush" tale is nothing new. We told you back in November about another property the Times article also covers, Jenna Lyons' $4M sale that Cousin John renovated. They talk Park Slope jumping 20% to a median sales price of $1.45M, while back in January we diagrammed every single sale below $1.5M in Park Slope in the previous 6 months. The Times says, "The biggest price increases have been in Boerum Hill — up 60 percent, to $1.7 million from $1.1 million," while we asked almost a year ago, "$1.6M is the new $1.2M?" in Boerum Hill. Check out the price increases by neighborhood for yourself:

It's easy for people to forget back in the Spring of 2009 when the Dow was mid-7,000's and properties like 132 Underhill and 96 St. Marks would drop from their $1.8M list prices to sell below $1.2M and $1M, respectively. The lull carried into the Fall of 2010 and did a complete 180 after that. In 2009, the doom & gloom was so bad that buy & hold investors were asking us if the glut of new luxury condos in towers along Flatbush (like Oro and Toren) would put pressure on their $2,400/month 3BR apartment rentals in Clinton Hill. They quoted a Park Slope landlord whose 1BR rentals had dropped from $1,850/month to $1,500/month. Now the Times says, "In April, the average rent in Park Slope was up 33 percent from the previous spring." But was that surprising anyone either?

One of the best things the Times finally points out in today's piece, something we were clamoring for in April, is that this is a supply & demand story. "The spiraling prices are being driven, in part, by the lack of supply. Despite the rising demand, no one is building new brownstones." And we've been screaming for months that Park Slope isn't the only place where people built amazing townhouses ~100 years ago, but the Times quotes a Halstead sales director who says, "People have it in their head that they want a specific neighborhood." That's why there's such a feeding frenzy at any decent listing in a good neighborhood, and why so many keep striking out bidding low against the crowds.

In some ways, Brooklyn is no secret at all. And yet in other ways, isn't it a testament to how out-of-touch Manhattan and the greater market at large might still actually be, that a $1M typo can slide by on a cover story so concerned with price? They're trying to make a price $210K above asking seem like a shocker, and they got the price wrong by well over a million?? Just imagine what upside might still be left in prices if more and more of the multi-million dollar condo buyers in Manhattan (for whom 7 figures might just as easily be a rounding error as it was for the NYTimes) decided they'd opt for a townhouse in Brooklyn instead? The gentrification might not be televised, but don't say we didn't warn ya.

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