Sunday, March 16, 2014

Closings of Note: Outliers Become the Norm

Prices for finished products and even fixer uppers are nipping at $2M on a handful of homes in Crown Heights, Bed-Stuy, and Lefferts Garden.  4-story townhomes with curb appeal and original details that traded as low as $500K on market just a few years ago now command almost 4 times that if you do it right.  1234 Dean Street shocked everyone with its $2.2M asking price, stunned everyone with its renovation & restoration, then just closed for $1.85M cash.  The seller tells us it might've even gotten $2M as a 2-Family.  You can think of this home as the outlier, until you consider nearby 627 St. Marks Avenue just closing for $1.9M, 1 Arlington Place closing for over $1.9M, and 196 Hancock Street already with offers over asking price of $1.85M.  Yes, soon the outliers become the trend, then the trend will become the norm.  To think it was breaking records to sell a 4-story finished product in Bed-Stuy for $1.34M a year and a half ago, now fixer-uppers can sell for $500K more than that with ease.


Speaking of $500K swings, just because 844 Union Street sold for $495K below its original asking price, doesn't mean that prices are "falling" in Park Slope.  This 21' x 50' 3-Family just off the park in prime Park Slope lasted on the market for some time between $3.595M and $3.25M last year and closed for $3.1M last month.  Then the $6,000+/month duplex rental market easily took care of the rest within a week.  Even at half a million off of asking price, this sale price is still over a million dollars higher than this place sold for in 2006 during "the peak".  Remember?  Back when rates were 6%, much higher than the 4-5% they still are today.  Why do people still think this is a bubble, and go around Chicken Littleling about "rates are going up"?  Beats us.  Wake us up when rates go north of 6% again and Brooklyn's prices reach half that of Manhattan's in pound-for-pound product.

We were a little surprised to see Platinum Members pass on 242 Lefferts Avenue at its asking price of $999K.  Now that the NYTimes has put Lefferts "on the map" for a few years in a row, it's becoming easy to see why these small little places on nice blocks are getting well over a million these days.  This house sold for $1.093M last month to a buyer coming from just one block away.

Another Platinum Member pass in Lefferts Garden goes for 62% higher in just a few months.  Owners told us 78 Fenimore Street closed for $1,001 over asking price 2 weeks ago.

Speaking of small townhome arbitrage on the other side of Prospect Park, this nifty little house in Crown Heights south at 992 Carroll Street sold for $700K in August of 2013, listed for $1.35M after some quick, basic-but-effective renovation, and closed for $1.275M last month to a buyer from the Upper East Side.  Up 82% in 6 months.  If that doesn't tell the story of what's happening out here, we don't know what does.  Buyers from Brooklyn Heights are pulling off a similar flip in the area as we speak.

Speaking of flips on the other side of the park, Crown Heights' 795 Lincoln Place went for just $380K in October, relisted for $1.05M in December "Looking ONLY For A Cash Buyer", and closed for $950K on Valentine's Day.  150% return in under 6 months ain't bad.

This 17' wide 3-story deep in Bed-Stuy took a little longer to flip, but the return was even higher.  652 Halsey Street came out asking $1.2M and closed for $1.07M - over 5 times what it sold for last May.  If barely-marketed product this small and east can get almost $1.1M, it makes well-marketed, renovated homes on the west side of Bed-Stuy look even better...

They asked us if Bed-Stuy's 262 Monroe Street was a $1.2M house.  We said yes, but it's the market that tells the story.  Asking $1.25M, this 3-story closed for $1.21M last month.  The number doesn't look big on paper, but if these 4-stories start trading at this home's over $500/sqft pricing, you'll start to see a lot more houses with a 2 in front of the price in Bed-Stuy.

$898 square foot for a condo in not-even-that-prime Prospect Heights?  Welcome to this converted firehouse where a 1BR at 735 Dean Street, #3B  listed for $675K and just closed for $640K.  Staged pretty nicely...

Regardless of price per square foot, there's not a lot you can get for under $700K anywhere near here, so these will continue to trade at this level or higher.

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