Wednesday, November 6, 2013

It's Real in the Field: 88 Quincy Street, #3

On line at Barclays last night, we overheard someone saying, "I was looking for comps to justify my offer price..."  Because, while property prices are negotiated today, much of the data won't be out for months to come.  So how is one to stay ahead of the curve?  You can't play time traveler with the comps like many try to.  Heck, even appraisers calls us asking for the contract prices of houses that have yet to close, just to stay up to date for their appraisals.  But amidst the bullishness, many murmur the tide is shifting.  Have you heard owners and brokers all around town already saying that the buyer exuberance from the summer is cooling off?  As if the price increases were supposed to keep flying off into infinity, and every overpriced listing was supposed to fly off the shelves.  If your channel check data point for the cooling off in the red-hot Brooklyn real estate market is a dinky 3 story at Albany Avenue for $1.1M with little action at the open house, you may wanna take a step back and see how far we've come.  Pretty ridiculously high prices keep on coming in.  And there's no denying reality.  Kanye says, "You just look stupid to be ignorin' the DeLorean parked in front of Armani Emporium."


Let's let the market speak for itself.  A year ago it was hard to get over $700K for a poorly marketed fixer-upper gem in Bed-Stuy; now a "2 bedroom" condo on the border of Clinton Hill and Bed-Stuy can fetch almost $700K.  88 Quincy Street, #3 - with its 6.5' wide 2nd bedroom - was a floor through condo in a nice limestone townhouse.

This apartment closed at the end of September for $665K, above its asking price of $657K, to a buyer from a few blocks west in Clinton Hill.  If you're keeping score at home, that's $850/sqft for a "2 bedroom" in borderline Bed-Stuy.  And to think, people are still reluctant to spend $425/sqft for historic, turnkey townhomes over here!  Heck, even makes the "shocking number" at 1062 Dean Street look like a bargain at $425/sqft.  Another townhouse just off Franklin Avenue, the whole-dollar number on 1062 Dean at $1.7M looks super steep.  But when you back it into price per square foot, it's cheap.  Same applies for condos, sometimes in reverse.  $850/sqft sounds like an astronomical number for Bed-Stuy, but where's the next best $665K condo in town?

Raw price per square foot is only one way to slice up a sale, but even the best in the industry sometimes get too bogged down in it.  Buyers are running around looking to buy the best spaces they can afford in the best locations, not a prescribed price per square foot per neighborhood chart.  With tons of demand for even the dinkiest 2BR's in the $700K range, it's no wonder 88 Quincy can have that kind of price action.  And why we're surprised that developers are telling us they expect renovated railroad 2BR's a block from Barclays will only sell for $550K.  An apartment at nearby 1 Hanson Place, #18K closes for $1.4M+ this month, which is many months in a row now of $1,000+ sqft comps in that building.  Yet people assure us there's no market for a condo conversion at half that price.  Smh.

Pro's: nice floor thru "2BR" in a limestone, manageable pricepoint for lots of buyers, ever-more coveted location

Con's:  not the full-size 2nd bedroom many insist on, price per square foot will shock & awe, tweener location, many will point out this is what an entire house over here cost not long ago (but you'd have to ride the DeLorean back in time to get it!)

Ideally:  demonstrates that a presentable bite that's not too hard to chew for many buyers can trade at a premium

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