Sunday, February 16, 2014

Wishing on a Star in Lefferts: 272 Hawthorne Street

On Platinum Member radar for a month or two, 272 Hawthorne Street hits the market in Lefferts Garden this month with a price that's wishful thinking in our book.  This single-family house is billed as a "brand new DEVELOPMENT LOT in Lefferts Gardens! be a part of the building boom going on in this most sought after neighborhood."

Boy, real estate - even just as a concept - inspires all kinds of wishful thinking.  "If everyone's doing it, why can't we?"  Sure, condo developments are already underway on this block in Lefferts.  We hear that's what motivated the seller here at 272 Hawthorne to list for the aspirational asking price of $1.45M.

In the doldrums of 2010, this house had a hard time fetching $590K, now they want almost a million dollars more than that.  What's changed?

In an industry often fueled by comparative sales as the guiding indicator of value, there ends up being a "monkey see, monkey do" component to real estate pricing.  When Jenna Lyon's stunning house sold for $4M in Park Slope (along with the help of Cousin John's renovation), it cleared the way for 174 Garfield Place to go after the same price.  So, the owner of 272 Hawthorne Street isn't completely wrong.  Development lots on the same block have sold for $1.4M last year.  Next door, 274 and 276 Hawthorne Street sold for $1.4M in June of 2013.  That's right, $1.4M total, or $700K each.  When pricing this, merely a 40' x 106' lot, we think they forgot to factor in that there's only one of them, not two of them.  50% swings like that are going to affect your valuation.  All for a house that's probably worth $700K+ on its own, regardless of development.  But we don't see anyone in a rush to pay double what the neighbor paid just a few months ago.  If $150/sqft was deemed too pricey for 40K+ sqft in prime Prospect Heights/Crown Heights border at 500 Sterling Place, we don't see why $150/sqft is the price for 10,000 sqft in Lefferts at the moment.  Just because your neighbor sells two of something for one price, doesn't mean you get to sell one of them for the same price as two.

Pro's:  frame house on a huge lot, even 137 Adelphi eventually sold, might actually work as a single-family keeper for the right price

Con's:  totally mispriced open listing, seller is dreaming, can't believe how many brokers are falling for it

Ideally:  unless some realism sets it, it's on to the next

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