Monday, December 8, 2014

Another Lefferts House Breaks $2M: 118 Rutland Road

If your panties were in a bunch over the past year when Prospect Lefferts Garden townhouse records were being broken at $1.825M on 36 Rutland Road and 55 Rutland Road, then brace yourself for flagships trading over $2M in this "emerging neighborhood" in brownstone Brooklyn.  It's happened before this year on Midwood Street, but that didn't stop the peanut gallery from snarking out on the original $2.995M asking price for 118 Rutland Road this year.

One astute observer pointed out, "The only way they get anywhere near that price is if they lift it up and drop it on to the other side of Prospect Park, say on a nice named street between 7th & 8th Avenue."

Hmmm... well, all "if grandma had balls, she'd be grampa" scenarios aside, the house dropped to $2.5M in a month and closed for $2.4M last month with some $500K down.  Sure, $3M was ambitious, but setting the debate that high (even momentarily) is one of the best ways to get people to bid higher.  Even if it's all smoke and mirrors.  But it isn't ALL smoke & mirrors.  Why does this house go for well over $2M these days?  Because if this house were on the other side of the park, it'd probably go for $4M or higher, not $3M.  Name a house as nice as 118 Rutland Road in Park Slope that a couple with $500K could've picked up for $2.4M or less this year.  Please note, this isn't "touting", these are just the facts.  Perhaps you missed the record breaking Park Slope closing for $10.8M last week, which certainly put more panties in bunches, even though $10M is a number that the Upper West Side can hit in its sleep.  As you may know, the same dudes who did Central Park did Prospect Park back in the day.  So does Park Slope really deserve to continue to trade at a fraction of the UWS forever?  Does Lefferts really deserve to trade at a fraction of Park Slope forever?  These prices don't happen in a vacuum, people.  Nor do they only happen in a bubble.  There's a whole food chain going on out there.

We're much too young to remember the day when Moses came down from the heavens with tablets from God that said Park Slope is the only place in Brooklyn worth living.

It is a divine law that lots of insanely affluent people still subscribe to.  But that law dwindles in the face of economics that push those ballers further and further east & south into Brooklyn for better product, as an even high level of baller supplants them in Park Slope.  All of which doesn't stop us from getting calls last week from folks with $700K in the bank and proposed purchase prices under $3M who swear Brooklyn Heights is the only place worth living for them.  Folks who say that they might consider settling for Park Slope, in the face of townhomes similar to or worse than 118 Rutland Road commanding $4M-$7M when located in Brooklyn Heights.  The economic persecution of the rich continues through the Pharaoh known as the market, and the peanut gallery is singing, "Let my people go."

The good news is, when you're breaking records for top dollar, at least you get best of breed top product.  118 Rutland Road is a 25' wide corner house with sick details and a private garage.  Albeit a single-fam with no rental income, it rented a few years ago with an asking price of over $6,000/month.  And yes, that's a 2.25% cap rate if you're keeping score at home, but nobody's buying these houses for a cap rate, they're buying them as their home.  And what a home it is!

There's two sides of every coin, and it's all a matter of context.  Is this a "soft market" 'cause a house went for 20% under its initial asking price?  Or is this a crazy market 'cause this house just broke a record?  It's about how you look at it.  Yes, sometimes you list for $3M and get $2.4M with $500K down, like 118 Rutland.  And other times you list for $2.65M and get $3M cash, like 242 Gates Avenue.  And all in neighborhoods that the majority of affluent folks consider "the hood".

And on 118 Rutland, even when they're asking $3M, the $6,000/month rental pictures were better...

Billed as an 8 bedroom, 2.5 bath mansion, over $600/sqft is almost unheard in this part of town.  But so is 25' wide and a driveway.  Special houses trade for special numbers, if you haven't noticed.  No wonder we flipped out and bent over backwards for a 30' wide house with a driveway and a carriage house in Crown Heights at 669 St. Marks Avenue for almost a million less than this.

And don't forget, a celeb's corner house with parking in Boerum Hill is currently in contract for over $7M, but less than $10M over there on Dean Street.

So try to keep this 118 Rutland Road closing in context a little, even though we know you won't.  Another house nearby with sick detail and a driveway is coming up for just under $2M soon.  But you don't know that 'cause it's not on the open market yet.  Patience, grasshopper...

Pro's:  25' wide corner mansion with a porch & parking, sick original details and some modern upgrades, would cost much more anywhere "better" than this, $500K down is getting people condos in other neighbs

Con's:  certainly ain't cheap, $6,000 rental pics did a better job than the $3M sales pics, broke a record, no rental income on a single fam, not where people think they wanna be or what they think they should be paying

Ideally:  another top notch house sells for a top notch price.  Whether you think it's just a market or it's a moral dilemma, it is what it is.  You wouldn't believe what's selling for this same price in an even better neighborhood, right under everyone's nose.

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