Saturday, May 11, 2013

Next-Best Buy in All of Crown Heights: 845 Prospect Place

Platinum Members were in & out of this house at a lower asking price weeks before 845 Prospect Place switched up with this latest broker and hit StreetEasy for the easier-to-find masses to descend on it.  And why not?  This place is a gem that wasn't meant to be nit-picked or brow-beaten as "secret listings" so often are.  Now with multiple offers and back-ups on the table, good luck getting a showing on this 4-story limestone-looking townhouse whose modest asking price of $899K makes any condo in Manhattan (and most even just a few blocks west in Brooklyn) blush.  Yes, while cry-babies on the local forums spout impossible demands for a crime-free zone for a million dollars - and their consolers continue to erroneously claim that yours truly is a real estate agent in Brooklyn, and that we go around urging that "people should buy quickly" - sensible folks with less myopic views of the landscape and a healthier dose of actual facts are making the next-best moves in town.  We've covered the phenomenon of people who can't even afford Bed-Stuy, for example, magically deducing that they're too good for Bed-Stuy.  "But who would pay a million to live in a crime zone?" is a bold question to ask, as if crime doesn't also happen in more precious places like the Upper East Side, or Park Slope, or Brooklyn Heights, or Carroll Gardens, or Tribeca - you know, the richest zip codes in the country.

Or are they?  One reader and friend of the blog, who recently bounced from his ~$2,600/month 1BR rental in Brooklyn Heights because the management company was set to raise rates to $3,000/month or higher, told us that Brooklyn Heights isn't one of the richest zip codes in the country.   Hmmm, well if you look at merely "Income Per Return", it's true that Brooklyn Heights (zip code 11201) is rocking a comparatively-paltry ~$73K per year.  But that stat alone is a misnomer because old money doesn't need to make money.  Their money already makes money for them.  While their income averaged $73K, the "adjusted gross income" for over 21,000 tax returns filed in Brooklyn Heights is averaging over $1.5M per.   When folks have that kind of revenue coming in, we can imagine it's kinda hard for them to find the inspiration to get up in the morning and earn six figures or more when they have other assets throwing off ten times that.  (We tolja' the lion sleeps 'cause it can...)  All this is to say that, (1) no neighborhood, no matter how absurdly wealthy, is immune to crime, and (2) if an historic townhouse from 100 years ago can still be picked up in Crown Heights for 30% less than tens of thousands of people are making in passive income a year just 3.5 miles west, is the pricing in the "emerging neighborhoods" of Brooklyn really "man bites dog", or just another case of "dog bites man"?

Is a $12 cocktail "objectively worth" twelve dollars?  Of course not!  But that's the economics of the cocktail bar.  Either pick your drink, or get out of the over-priced cocktail bar.  But stop coming in and scoffing at the prices!  Jeez, and if you managed to find a cocktail for a fraction of that price and you STILL have something to complain about - then, boy, we really can't help ya!

One developer told us yesterday that $1,200/sqft is the baseline rate for finished product in Manhattan, and yet you can still rock a townhouse filled with original details for barely over $200/sqft in Brooklyn??  Heck, even Brownstoner said a study revealed the average cost of a renovation in this area is some $178/sqft, and we're talking about picking up a whole house for barely more than that??

All on a block with an amazing, unique variety of historic townhomes - both free-standing & rowhouses - in different styles...

Let us not forget that affluent people built Bed-Stuy and Crown Heights, then a moratorium on lending from freaked-out banks after The Great Depression (and other economic cycles & socio-economic factors) made affluent people leave those neighborhoods for dead for generations.  So, sorry if you're just re-awakening to these neighb's again and their stellar housing stock, and also finding that - ahem - great minds think alike and the affluent people are coming back.  Is the house in estate condition?  Totally.  Is it live-able?  Sure.  Does it reek of oil from a leaky tank & burner that needs to be changed to gas?  Yup, and that's way-affordable too, btws!  Is the kitchen floor on the garden apartment almost totally caving in?  Right again, but this all comes with the territory.  Show us the next-best house delivered vacant just off a thriving commercial strip, on a block with this much character for under $1M.

Don't get us wrong, $1M is a lot of money, but it doesn't make you bulletproof.  And, really, what is a million bucks anymore when anyone with even $50K down and a six-figure income can still leverage over 20-to-1 at interest rates in the mid-3%'s fixed for 30 years - a cost that pretty much keeps up with inflation anyways?  And this town is crawling with people who can easily swing loans like that.  So when even a few of them decide they'd like a townhome in Brooklyn, then that's what townhomes in Brooklyn start costing.  The same supply & demand story we've been screaming for well over a year now.  It's all about perspective.  Let's keep in mind what unique numbers we're dealing with in New York in the first place.  Half the world, over 3 billion people, still live on less than $2.50/day, the base fare for a one-way trip on the subway in our neck of the woods.  When you can still cop a house for a quarter of the price of homes 1 stop away on the A train, sure, there may be a few other trade-off's involved too.  But that doesn't mean it's not the next-best move in the local ecosystem of Brooklyn real estate.

Pro's:  curb appeal, great block, original details, delivered vacant, under $1M!

Con's:  didn't show well on first go around, updates to be made, smell from leaky oil tank is pervasive, estate sale may take time if it requires court approval, spectators will still throw rocks at the throne of the best buy in Crown Heights 

Ideally:  a top-notch purchase while many still don't know what they've got 'til it's gone


  1. closed for $955K in November 2013

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