Tuesday, May 6, 2014

Crown Heights 3-Story Pricing: 934 Pacific Street

On Platinum Member radar months before it hit the market, 934 Pacific Street was an uninspiring 3-story on a so-so block in Crown Heights in our book.  The deal was first shopped to us pre-market at $1.1M over the summer.  No takers.  Then, after the owners closed for $900K, we got the call around Thanksgiving that developers were already offering $1.3M cash.  "If investors would pay $1.3M cash, there's gotta be an end-user who would pay $1.5M-$1.6M," the owner told us.  We weren't buying it.  But, lo & behold, after listing for $1.59M in December, they raised the asking price to $1.69M in January, and a buyer from lower Manhattan swooped it up for $1.625M last month.

Is it surprising to see the underwhelming 3-story fixer-upper over $1.5M poking its way into Crown Heights on a not-impressive block?  Sure, for this same price or less we'd rather have 460 Carlton Avenue, 255 New York Avenue, or 795 Bergen Street.  Handfuls of people would be hard-pressed to bid over $1.2M on this house were it available now to do all over again, but all it takes is one buyer to snatch it up.  934 Pacific Street makes 85 Hall Street look like a masterpiece!  Heck, we'd even do 18 Brevoort Place before this one.  But it does go to show that sellers who have access to the retail market may shop their property around, but won't be low-balled if they don't have to be.  Sometimes there's a chance to intercept properties before they even hit the market, but this one was an easy pass and a relatively astonishing number on the retail side for Crown Heights.

This makes even record-breakers like 1234 Dean Street look like a deal, and puts the at-the-time shocking 1062 Dean Street in perspective.  $1.625M is a surprising price for a mediocre 3-story on a mediocre block, but it's another sign of the times in this market.  Can you even remember the days of the next-door neighbor 936 Pacific Street struggling to get $899K?  Can we attribute this pricing to the "any house around $1.5M in Brooklyn still beats a condo in Manhattan for some buyers" effect??

Pro's:  Prospect Heights side of Crown Heights, delivered vacant, a real listing, 20' wide

Con's:  listing price went up, high price for a 3-story in this shape, block is nothing special, lots of more grand alternatives for this price in the neighb', work to be done

Ideally:  an amazing low maintenance flip.  All it took was one buyer to prove us wrong.

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