Thursday, October 24, 2013

Look Who's Closing in Clinton Hill: 148 Gates Avenue

A totally legit 4-story fixer-upper in prime Clinton Hill closed yesterday for full asking price of $1.35M.  That's right, after some 6+ months in contract, 148 Gates Avenue closed yesterday.  While people were whiffing on handfuls of houses in Bed-Stuy, Crown Heights, and Prospect Lefferts Gardens at even higher prices this spring, summer, and fall - where were you when this house was available for all to see?  Were you sleeping on Clinton Hill like Rip Van Winkle?  Were you getting too cute about non-apples-to-apples price per square foot comparisons?  We were touring the house with the listing brokers at Cpex back around March when their previous contract had fallen through.  We were shocked to see a house in way better condition than we were expecting for the price.

These pictures don't even do it justice.  A few days of junk removal & some fancy pictures and you're looking at way more than 25% upside on this place without a real penny spent on it.  Though we think something much more lofty is in store.

Was it only a year ago that we had to hold your hand through the "shocker" that prime Bed-Stuy was surpassing the $1M mark and tell ya how comps are a severely lagging indicator?  To that second point, many will lose sight of the fact that this price on 148 Gates was negotiated and locked in just over 6 months ago.  Keep in mind that estate sales can sometimes take significantly longer to close than other more "ordinary" sales because some things require court approval.  That's even if the deal is all cash.  Often times, those delayed closings end up recording a purchase price that people are salivating over because the market has moved so much higher during all the time spent in contract.  Heck, just ask the owners of 22 Arlington Place, who got offers of $1M+ the week they closed in the $700K's, and who could easily drop the house on you now for over double what they paid for it.  And even $715K was a price that it was hard to find enough justifiable comps for most people just last year, if you can imagine!

And, yes, we still get e-mails from finance people who made their money in high-frequency equity trading, asking us for a unicorn like a turnkey house in Clinton Hill for under $1.4M that they can acquire with 20% down.  That's right, someone who'd laugh at you for trying to buy a rising stock at its price from 9 minutes ago gladly thinks some house is waiting for them at a price from over 9 months ago.  And the people watching day-to-day essentially-meaningless micro moves in interest rates on the loans may have overlooked the much more meaningful move that banks are back to wanting 25% down again (not 20%) on non-FHA loans.  But they don't hear us though.

While over 300 people lined up in the cold for a Corcoran open house just down the street back in January (which closed for $1.555M by March), the folks at Cpex were moving another less-publicized slam dunk out the door for less.  Don't call it a comp unless you know how and why and when this actually moved for the price that it did.  The Pro's and Con's haven't changed in almost 9 months, and neither has the purchase price on this house.  Only they all ring truer now...

Pro's:  curb appeal, next-best buys in the area, slightly under the radar, nice brownstone stock in a great neighb' at a value

Con's:  already gone, didn't last long, work to be done, not as touchy-feely as a Corcoran listing

Ideally:  even the "secret" stuff only lasts a few weeks, so you gotta keep yours ears open to pounce on these

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