Sunday, October 5, 2014

Topics: Reminder

'All buyers with Alzheimer's, line up please...'  We've got it if you need it, a reminder.  Before any one data point in NYC real estate blows your mind, let's remember what city we're dealing with here in Brooklyn in the first place.  This week we're reminded how baller this city really is, as NYC tops the Forbes list with over 50 billionaires.  It's not like this is anything new.  And don't forget this city's got 7,000+ folks with $30M+ net worth.  "Men lie, women lie, numbers don't..."  So do we still get to pretend like historic townhomes in Bed-Stuy setting records above $2M are a surprise?  NYTimes says Manhattan luxury condos are "dialing it down" with fewer $10M+ condos hitting the market.  And you're still surprised that Fort Greene townhomes are $3M+ now instead of $2M+?

Well, one Fort Greene resident who claims to be hip to the market certainly is surprised.  They texted us out of the blue yesterday looking for a move-in ready town home in Fort Greene with a rental for ~$2M.  That type of deal hasn't happened consistently on the market for over a year, and just this week Platinum Members were excited to have an accepted offer on an off-market fixer-upper in Fort Greene for over 25% more than that.  The would-be buyer complained to us, "Yes, developers and corporations are not making it easy for families that want to stay in the neighborhood."  Which is a great sound bite that gets the empathetic & populist juices flowing, but when you work as a 'Global Business Development Manager' for a $69 Billion multi-national corporation, and you are among the upper 1% of wealth in the richest country in the world... pleas for what is and isn't "easy for families" might fall on deaf ears.

You can't play cut-throat, 'big bank take little bank' capitalism by day and then come home looking for sympathy and special treatment "for families" by night; as poet, activist, and all-around bad-ass Grace Paley pointed out in her poem, "The Hard-Hearted Rich"...

As we all know, there are certainly many families that the economic realities in places like Fort Greene are much harder on than the plight of the upper 1%.  We've documented what $2M gets you in & around town, and it is oh-so-rarely a move-in ready house in Fort Greene with 20% downpayment.  And if one such property were to hit the open market, it could easily be bid up higher than $3M by dozens of buyers.  Just ask the owners (or the dozen plus losing bidders) on 252 Carlton Avenue.  It's cute to say you're trying to make it easy on families when what you're really trying to do is buy someone else's $3M asset for just $2M.  Who wins there?  And it's cute to pay lip service to romanticized notions of "staying in the neighborhood", but when you buy someone else's house from them, it necessarily creates someone who now doesn't get to stay in the neighborhood anymore.  So, as they say, it is what it is.  And as we've said before, if you don't like the prices at the $12 cocktail bar, then kindly exit the $12 cocktail bar.  But let's not forget what a rarefied place the $12 cocktail bar is in the first place.  We're living in a city with "the only mayonnaise store on the PLANET!!!"...

We're living in a city where just a few blocks up from that very mayonnaise store, parents with 8-figure bank accounts are buying starter apartments for their kids for over half a millie all cash.  We're living in a city where real estate brokers who have sold hundreds of millions of dollars worth of real estate still miraculously don't know what 2BR apartments rent or sell for.  We're living in a city where computer programmers with 6-figure salaries get 7-figure bonuses from their hedge-funds and buy fixer-upper houses for well over $1M cash.  We're living in a city where some hedge-funds won't even take a meeting with you about managing your money unless you're bringing $25M+ worth of assets under management over to them.  We're living in a city where clowns routinely pay more for bottle service in one night at a club than most American families earn in a month or two.  We're living in a city where celebs with $2M+ cash ask us to help them knock the price of their home inspection down a few hundred dollars on a $3M off-market purchase.  We're living in a city where millionaire movie producers and their big brokers beg us for an off-market showing for weeks, then cancel the showing at the last-minute claiming their "work dictates their schedule."  As we told them, indeed, work dictates the schedule of you and the other 7 billion of us here on mother Earth.  Sometimes these people need a reminder.  Whether they are the hard-hearted rich, the broke-ass rich, the 'think I must be the only person in town who's' rich, or whatever variety of rich in which they may appear.

When Starbucks comes to one of the busiest intersections in Crown Heights, it reaffirms some provincial "there goes the neighborhood" sense that Crown Heights isn't just a neighborhood, it's a movement.  But it's not a movement, it's just another dang coffee shop next to another coffee shop.  There's a Starbucks on a picturesque stretch of Bay Ridge (which looks like the West Village compared to Franklin Avenue) and you don't see anybody losing their minds over that.  It's just a $5 coffee, in case you needed a reminder.  Lines of people at Ample Hills (across from the mayonnaise store) would have you thinking that they invented the ice creamBerg'n in Crown Heights is great & all, but some people have complained to us that it's just a stylized square box that serves beer and has 4 food places already frequented in truck form, not some "food incubator" that fell from the creative heavens.  But others saw us eating Mighty Quinn's wings there and said, "I want to move to this neighborhood just for the wings."  Brooklynites are simultaneously so starved for certain amenities that even the simplest pleasures (available in suburban locales nationwide) are treated like God's gift to artisanal inventiveness, and yet so myopic they think they can curate everything down to what precise block is suitable for them and decide what price they and only they should be expected to pay for it.  Another case of NYC having its head in its own sand.

Yes, Brooklyn exceptionalism runs rampant in this town.  People "priced out" of the Upper West Side sell their $4M condo and flee to the relatively friendlier confines of Fort Greene.  If they want a house in Fort Greene and can afford to pay more than $2M, then those houses will cost more than $2M.  And they've got families too, in case you needed a reminder.  What most people pay for rent on one place in Fort Greene is the mortgage on handfuls of homes combined where we come from, in case you needed a reminder.  So it's all relative.  People pay more for homes in Bed-Stuy than other people think they're worth, while the latter complain about "the schools!"  Those buyers have kids and care about their schools too, in case you needed a reminder.  And the same way buyers want to get as much as they can, so do sellers, and so do brokers, and so do "investors".  So just remember you're not the only one who likes good food, good schools, light & air, safety, access to transportation, parks, etc. who finds yourself navigating a treacherous urban & economic jungle here in New York.  It's hard out here, even for the millionaires.

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