Tuesday, May 20, 2014

Stagflation Won't Make or Break Park Slope: 233 Garfield Place

In a highly-coveted no-brainer neighborhood like Park Slope, the fixer-uppers can easily go for more than $2M.  And that's not anything new, per se, either.  It's been going on for years on Garfield Place for homes that need a ton of work.  It's why Platinum Members were so psyched to check out a barely-marketed fixer-upper like 29 Lincoln Place, especially when it became available below $2M.  That's a relative steal in this market.  So just imagine how high the finished products can go in Park Slope.  It was a shock to everyone when Jenna Lyons' house (courtesy of Cousin John's renovation) at 178 Garfield Place soared over asking price to $4M just over 2 years ago...

A year later it was the much more generically renovated 174 Garfield Place, two doors down, that wanted the same kind of ~$4M pricing and pretty much got it...

Getting a totally finished product these days in Park Slope can mean going over the $4 million dollar mark.  In the case of 233 Garfield Place, it took a $2.5M downpayment.

Yeah, that's right.  233 Garfield Place closed this month for $4.25M, just under its latest reduced asking price.  And the downpayment alone was higher than the sellers paid for the entire house in 2012, and higher than many folks to this day think they need to spend in Park Slope.  We were shocked when this pink house dropped so close to $2M, down from it's $2.39M asking price in 2012.  It went the way of 27 7th Avenue, 181 Park Place, and 777 Carroll Street.

In a bar in Crown Heights last week, someone told us this is a bubble because wages have been stagnant for years, the demand will run out, and there will be a glut of supply.  Is that the Brooklyn you see when 100 people crowd an open house, dozens of offers come in, and prices soar to new highs?  Stagflation ain't got nothing to do with these kinds of houses at these pricepoints.  The story isn't being told here by people with stagnant wages; it's being told by folks from Manhattan who sold their company for $50M in a slowly recovering economy in 2011.  By folks "with a unique & deep domain expertise in the Millennial generation."  By folks who've seen "meh" condos asking more than this.  Stagnant wages are a bad thing, but the money certainly does go somewhere.

And who's selling these houses?  Well the Million Dollar Listing guys are happy to Instagram & Tweet when their ~$4M Brooklyn listings are in contract, like this one and 73 South Oxford...

And they're happy to brag about taking "over when the local brokers couldn't get it done."  Ouch!

The moral of the story is, don't sleep on houses that trade at relative values in top neighborhoods where the sky's the limit on end-user pricing.

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