Bed-Stuy Beauty In Contract: 160 Hancock Street

When you want a straight-up castle in Bed-Stuy, you can drop $2.1M with Corcoran (errr, make that $2.2M on 254 Gates Avenue) or you can roll with a lesser-known broker for a more underground deal asking $1.1M for the gorgeous 160 Hancock Street.  On Platinum Member radar early on, this gem is on one of the top-notch blocks in all of Bed-Stuy.  102 Gates wasn't the first of its kind - hundreds piled into 261 Hancock Street with Corcoran too, and offers soared hundreds of thousands above asking price.  All just a few months after Platinum Members picked up a place off-market in even better shape at 153 Hancock Street.  Even the barely-marketed value plays are going for more than come-lately's think Bed-Stuy's worth to them.  But savvy buyers know the next-best looks and recognize a real don when they see one.

Half the people who tell us "Nostrand is too far" haven't even walked down this beautiful block.  And all the people who catch the A express at Nostrand will tell you how they whiz by all the folks waiting at the three C train local stops in Clinton Hill and Fort Greene, reaching downtown Manhattan in flash.  The buyer's market is gone and it takes digging a little deeper than Corcoran.com to get something for a quarter millie less than Corcoran would get for it if they had it.  People wonder, "Where have all the perfectly-renovated 3-Families under $1M with rents that pay for themselves gone?"  We've been screaming it for a while, that it's supply and demand.  Brokers shock themselves with rental listings in Crown Heights for $1,800/month that fetch $2,300/month.  It's across the board.  You can go further east and get ahead of the curve, or make other compromises on size, price, and condition.  But Brooklyn doesn't owe anybody anything.  When this boom's got ya down, just channel your inner JFK and, "Ask not what this market can do for you, but what you can do in this market."

Pro's:  curb appeal, block, original details, delivered vacant, next-best buy in the neighb'

Con's:  SRO, went in a flash, tricky to finance, work to be done

Ideally:  a decisive pick-up on some great product in a top-notch location

Scheduled Foreclosure Auction Today: 308 Clermont Avenue

[Update:  We're told foreclosure's been postponed]

Imagine our surprise when a renovated 3-Family that wanted over $1.6M in prime Fort Greene after the crash relisted last year for $1.39M as a short sale!  That's when some jokers proceeded to lowball the owner of 308 Clermont Avenue, then he wised up to the market value, and they increased their price.  Owner didn't know how much it was actually worth on the way down a few years ago or on the way up a few months ago, and it appears the music has stopped and it's now scheduled for foreclosure auction today with a lien of just over $933K... 

Steps from the Brooklyn Flea, steps from Fort Greene park, steps from "restaurant row" on Dekalb, and not too close to Barclay's... this is a slam dunk no-brainer that highlights the real estate bloopers that occur in Brooklyn.  Folks thought they could take this place down for less than condos trade for in this neighborhood!

This place has seen lurkers, low-ballers, investors, legitimate buyers, cash offers, shady attempts to avoid tax implications, Corcoran brokers and mom & pop brokers.  It's been called a short sale at $1.39M last year when it wasn't, then dared to ask as high as $1.9M after they realized they were much too low.  Can't wait to see what happens next...

Closings of Note: Closed in Crown Heights

The luxury of sleeping on Crown Heights is a rapidly diminishing one for anyone who loves great housing stock, train access, diverse (& yet upcoming) amenities, and doesn't have well over $1.5M to spend.  Why?  Well, when around the block from Biggie's block hundreds line up just to try and cop a spot that's $1.3M in Clinton Hill (and will ostensibly soar well above that price) just for a fixer-upper... the writing's (been) on the wall.  Yesterday, they lined up outside in the cold again for something way deeper in Crown Heights at a similar pricepoint.  Back in the spring of 2012 when a few dozen people seemed like a crowded open house, Corcoran brought you 10 St. Charles Place.  Local brokers told us the seller wanted $850K not long ago, but they couldn't bring it.  Corcoran listed at $920K and offers quickly reached $999K.  Listing agent Caterina Peters tells us that tenant issues made that deal fall apart, but 2 months after those were resolved, they re-listed for $999K at the end of the summer, and just closed for $1.06M.  This looks like a big leap on paper, and will inevitably cause some Chicken Little's to panic, but let's keep in mind that even $210K above the seller's original ask is another $1,000/month financed at prevailing rates - which isn't a deal-breaker for the even the modestly deep pockets who still want a townhome for what amounts to condo prices just a few blocks west.  We know every potential buyer likes to think they're a unique snowflake to whom the rules don't apply and that Brooklyn is their own private Discount Shoe Warehouse that owes them some great steal, but in this seller's market, "it's a thousand you's, it's only one of me."

By the time 10 St. Charles was back out, even at a higher asking price, buyers who'd seen this movie before at another one of Caterina's listings around the corner at 355 Eastern Parkway decided to adjust accordingly and take down a great property.

In addition to 660 St. Marks Avenue, Caterina also just moved another Crown Heights beauty at 1361 Union Street.

This lovely limestone in Crown Heights south was another condo alternative value play with killer original details inside...

They listed at $875K at the end of the summer and closed for $900K last week.  And, just a block away from 10 St. Charles, Platinum Members took down 583 Lincoln Place, one of the next-best plays in the neighborhood that didn't have Corcoran crowds at it, as it was moved basically off-market.

Next door to this property, the owner of the beloved Crown Heights destination Franklin Park moved 26 St. Francis for $810K cash.  Which is deceptively cheap until you factor in that the sale took about a year due to tenant issues, so this contract price was decided long before many were hip to the area, and wasn't marketed on your Corcoran.com's.

And if you dig even deeper, and you've got the cash, a limestone like 698 St. Marks Avenue can be swooped up for $515K, like it was on New Year's Eve.  964 St. Johns Place sold for $509K.  Even the odd, boxy, yellow 734 Nostrand Avenue one in from the corner sold for $900K on New Year's Eve.

Even dinky 3 story vinyl siding at 831 Dean Street got $800K.  The barely-marketed 827 Dean Street got $899K.  The 8-Fam at 158 Rogers Avenue got $1.85M.  Not even a year after people were too trigger shy to make a move on the 2-Family castle at 1142 Dean Street for under $1M, 1140 Dean Street (chopped into 8 units) closes around its auction for $1.035M.  Platinum Members had the early lead before this sale, now anybody who wants it has gotta pay the piper to the folks quick enough to move on it the first time around...

A little further east, another limestone gem at 1382 Dean Street sold for the amazing price of $600K!  With a handful of big brokers asking over $1M for Crown Heights now - prices already reached last year - where do you think this neighb's headed next?

Closings of Note: New Year's Babies Keep Coming

Real estate closings don't happen overnight.  Besides the time it takes for appraisal and commitment from a lender on financed deals, even cash deals can take as long as a year for all kinds of reasons.  People tend to forget that a price closed today isn't the measure of a property that was available yesterday, and therefore not a true measure of where the market's at in this moment.  Accordingly, we told you about the mad rush to close deals before 2013, and many of the closings are still rolling in over a month later.  We tracked 292 1st Street for ya not once, but twice.  In the spring of 2011, there was still room in Park Slope to get cute with your bids, and this listing flailed with Century 21.  By the time Corcoran got their hands on it for $1.6M last year, beggers couldn't be choosers anymore at these pricepoints in Park Slope, the place barely lasted a month, and it goes above asking price for $1.68M just before Christmas.

Also in Park Slope, 379 6th Street had unicorn potential written all over it with a snazzy list price of $1.495M.  At 3 stories and less than 17' wide, it lasted less than a month on the market and closed above asking price at $1.82M just before Christmas.

It took forever to close, but 1612 8th Avenue, a listing from what seems like yester-year in South Slope (2011) closed just before Christmas at $1.375M, a drop from $1.695M.

361 Bergen Street was a nifty little Park Slope gem we were all over as a FSBO.  Then Halstead wasted no time at all getting them their $1.8M cash just before Christmas.

When a fixer-upper in Park Slope by 4th Avenue is $1.8M cash in a flash, why are we still shocked to see a finished product go above asking price - but still under $2M - a few blocks away in Prospect Heights?  214A St. Marks Avenue is only 3 stories and less than 17' wide, but they cruised to $1.925M.  While some are still sleeping on Prospect Heights, we can't wait to see how nice they make 120 Brooklyn Ave in Crown Heights.

With the same rent roll as a 4-Family in Bed-Stuy currently asking $800K, 196 Sackett Street in Carroll Gardens was a 22' x 50' 7-Family begging to be repositioned with a list price of $1.4M.  We touted it to some amateurs and bearish buyers, but pro's with skills took it down for $1.2M, closing just before Christmas.  Less than $300/sqft in Carroll Gardens?  Yes, please!

147 Vanderbilt Avenue asked, "All cash offers please, property requires a full renovation."  On the northern edge of Clinton Hill with a huge floorplate, they listed for $1.3M and closed for $999K earlier this month.  AKA, the same price they listed at in 2009, people!

We were fans of 332 Macdonough Street both times around.  Many hemmed & hawed and sweat the details, while a $1.3M listing across the street at 333 Macdonough Street was clearly soaring above asking price and breaking Bed-Stuy records.  332 Macdonough closed for $999K before Christmas.

333 Macdonough's $1.34M record-breaking price for Bed-Stuy didn't last long, because 254 Gates Avenue sold for $2.2M.  Just to give you a sense of how fast the market moves before the comps can even keep up, both Curbed and Brownstoner erroneously attributed the previous record-holder in Bed-Stuy to 53 Monroe Street.  We already told you, "There goes the neighborhood" when Minsky brought $1.5M across Classon at the next-door 252 Gates Avenue, which not only sold for $1.45M, but is getting a ton of work done as we speak.  And now a finished beauty goes above $2M and above asking price.  Many are quick and apt to point out that calling this Bed-Stuy is a bit of a misnomer, because it's as Clinton Hill as Bed-Stuy gets.  So calling this Bed-Stuy's biggest sale is almost like saying "Mike Piazza's the greatest hitting catcher of all-time", because he was more of an A- hitter who happened to play catcher.

Fresh off an estate sale for $610K just before Christmas, 618 Lafayette Avenue's already up for rent with a 1BR asking $1,799/month.  Salivate over this pricepoint, but estate sales are hard to find and even trickier to navigate even once you have found them.  Oh yeah, and you're probably still not ready Bed-Stuy.  And you're probably not feeling the 18' x 36' floorplate.

Speaking of Bed-Stuy in the $600K's, 564 Hancock Street finally closed for $660K just before Christmas.

 
What's someone from Carroll Gardens doing in Bed-Stuy?  Buying a townhome!   383 Macon Street listed for $799K back in 2010, and sold for $740K before Christmas.

And in Brooklyn Heights, even a huge haircut is still a lofty price for mere mortals.  113 Willow Street listed for $4.5M, dropped to $3.9M, and closed for $2.9M on Christmas Eve.  Before you belly-ache about how that's well over $900/sqft, try seeing what that price gets you one stop across the river in Manhattan.

52 2nd Place in Carroll Gardens was a decked-out 16' wide home on an 80' lot asking $2.795M.  Nothing was stopping it from a contract in 3 weeks and closing before Christmas above asking price for $3.045M.


For more big-ticket townhomes, Carroll Gardens don't play...

377 Union Street got its asking price of $2.995M before New Year's.

356 Sackett Street got over $4M.

Park Slope cruises into the high $3M's...

307 Garfield Place listed for $3.85M and closed for $3.615M.

848 Carroll Street listed for $3.575M and got it, closing on New Year's Eve.

Even "a Farmhouse in Park Slope" at 303 13th Street got over $2M, along with 63 7th Avenue, 486 1st Street, and barely 374 Douglass.

Fort Greene is no slump either with $2M's and up...

51 South Oxford listed for $2.395M, had a contract in a month, and closed for $2.63M just before New Year's.

And there's plenty more to cover tomorrow...

In Contract in a Flash: 102 Gates Avenue

Why did a reported 375 people descend on an open house at 102 Gates Avenue this month and dump enough offers in their lap to get a contract signed in barely 2 weeks?  Where else can you find 4-stories this close to the train listed under $1.3M?  It wasn't like the superior house across the street was empty last year when 101 Gates Avenue listed with Corcoran for $1.5M.  Even back then it wasn't hard to map out where prices in Clinton Hill were headed, as we quickly sketched on paper last year...

And now we're curious to see how high above $1.5M this house at 102 Gates will land.  Does it need work?  Sure it does.

This listing agent knows her Gates Avenue.  She's seen this movie before, having 110 Gates Avenue drop all the way from $2.45M to close for $1.7M at the end of last year.  We guess she figured this time around to start the list price low and let the bidding war figure out where the number lands.  Novices will tell you 102 Gates should go much cheaper because 110 Gates was so nice and closed for "only" $1.7M a mere 3 months ago.  Ah, but like all comps, that contract price was negotiated many months prior to the closing, and - most importantly - 110 Gates is long gone.  So who is 102 Gates' competition then?  You can brow-beat any listing you see and gripe about how it only works for you at hundreds of thousands below asking price, but we told you it's supply & demand dictating this market.  This isn't day-trading with equities where you can ride cyclical waves of price action in & out of the same stock.  Real property is a high-stakes, winner-take-all industry.  And you don't have to go to a soothsayer or read tea leaves to know that a listing like this means 374 other people who didn't get the house are certainly crawling around Brooklyn looking for the next one.  Platinum Members are scoping out a handful of properties a few blocks from here that a fraction of the hundreds of people in this house even know about.  Inefficient markets create opportunity.  Corcoran listings create happy sellers.


Pro's:  20' wide, 4 stories, close to C train, historic neighb', original details

Con's:  no secret, gone already, needs tons of work, will go way above asking price

Ideally:  skip the lines and head to properties on fewer people's radar

Topics: Supply & Demand

On a 12 degree day in Brooklyn, sunny South Florida was all a flitter over encouraging housing data that show sales in 2012 eclipsing activity during the height of the housing bubble - for single-family homes in Palm Beach County.  Seeing this much activity can be good news, but it's important to note that supply & demand still dictate pricing.  Note that more homes may have sold in 2012 than 2005, but the median sales price has fallen over 43% during that period.  Prices are on the rise consistently for the first year since the crash, but you can still cop amazing 2BR's on South Beach for under $500K, while $700K becomes a tough price for even some of the dinkiest condos in the best parts of Brooklyn.  It remains a buyer's market in South Florida because of all the supply.  Yet in Brooklyn, townhome sales activity levels in Park Slope are completely stagnant compared to last year, yet prices are way up.  How does that work?

With more homes in South Florida than there were owners who intended on living in them, it was easy for things to come crashing down once the music stopped.  And it's taken a lot longer to recover than it did in Brooklyn.  Even Brooklyn wasn't immune to the crash in 2008, the credit crunch that stiffened (even froze) lending, or the stock market dip that cut net worths almost in half.  You could cop an amazing 4-story, freshly renovated brownstone on Underhill in Prospect Heights that fell from a list price of $1.8M to an amazing purchase at under $1.2M!  This is one of the King Kong best alternatives to unicorn-chasing $1.5M in Park Slope in the past 5 years.  But in the winter of 2009, you couldn't get 300 people into a barely-marketed house in Brooklyn.  It was even pulling teeth to get people into 3-Fam's in South Slope for over $1.2M.  Now, 4-stories on that same street in Prospect Heights, with a dinkier renovation, with a stumpier backyard, cruises to $1.75M with the big brokers, just under asking price.  And once that was gone, 3-stories in Prospect Heights - in a condition many wanted to update extensively - cruised over asking price to sell just above $1.7M.  Why?  Because lending is back (rates are lower than before or after the crash), the Dow is back, buyers are back, and all along Brooklyn never went anywhere.  Spare us this nonsense narrative about how "gentrification" is a white thing.  Brooklyn is a thriving international destination for people of all kinds of backgrounds.  Leading up to the crash, we too asked ourselves, "Where will all these millionaires come from?" when $500/sqft became the industry standard for new condos being built throughout Brooklyn.  Now those bad-boys fly off the shelves at $700/sqft & higher.  People take their sales proceeds on a gain like that (or equity loans) to get a townhouse, and the cycle continues.  Even through "the greatest recession in our lifetimes", in just a few years Brooklyn absorbed the thousands of condos they built in towers along Flatbush, that everyone condemned as generic and fretted over as a glut of inventory.  Yet, now they're "building four more new towers".

Another Corcoran broker called us to say that no one's selling, there's no product and tons of buyers, and to report the 375 person open house in Clinton Hill.  We pointed out earlier that morning that some people are selling, and that some of those same people are even buying too.  We agree, it's wild out there, but it's pure supply & demand driving this market.  We've been saying it for a while.  The average apartment in Brooklyn is still 34% cheaper than the average apartment in Manhattan, which the NY Times quotes at $3,973 now in an article that asks, "What is Middle Class in Manhattan?".  And sales comparisons to Manhattan can be even more favorable to Brooklyn than rentals.  So we're still surprised at all the surprise over rising prices in Brooklyn, when in perspective, there's still a ton of value here.  According to these figures, Manhattan rents are up 20% since last year, and people still need an explanation for Brooklyn?

If you don't like fixer-uppers that command $2M in your favorite Brooklyn neighborhoods, you really don't wanna see what fetches over $3M in Manhattan.  Just because Brooklyn isn't this bastion of bargain basement deals anymore, doesn't mean it's cooked either.  There are still great compromises on price, location, size, and condition worth making.  The glass is still half full in our book.  Don't get caught up in that Phil Mickelson swag.  He says he's gonna have to make some "drastic changes" in light of presuming his taxes are headed above 60%.

Poor guy made over $40M last year, but he says, "I've got to make some decisions on what I'm going to do."  Nobody we know would have a hard time settling with 40% of $40M, but...  guess you've gotta play the hand you're dealt.  Just so happens, the resounding reaction to his comments includes, "Move to Florida!"

Multifamily Package Sold in Bed-Stuy

Real estate investors love that 6%+ cap rate with upside that Brooklyn offers.  A package of 5 multifamily buildings in Bed-Stuy just sold for $7.6M, not far from the asking price of $7.95M.  And from what we can tell, it sure looks like a power move for anybody with the funds to pull it off.   When it comes to mixed-use & multi-family properties, listing broker Stephen Palmese is the master of the 6-cap, moving 10 buildings on Myrtle Ave in Clinton Hill in that range since 2010.  Last year, some people were sleepin' when he dropped an 8-Family on ya on Washington Avenue at the Crown Heights & Prospect Heights border at a nice cap rate too.

This 5 building package consists of a total 62 (or 63) apartments that rent for an average of $1,132/month per apartment.  Compare that to studios in the area averaging $1,400/month, 1BR's almost $1,700/month, and 2BR's over $2,000/month.  And over half of the units are "destabilized or registered with preferential rents."  This sales price is way less than $200/sqft and a solid 6.67% cap rate, that will be over 7% if the rents go up less than $50/month next year.  The buildings range from 8 units to a 21 unit property, for a total of over 45,000 sqft.  The sweetest one in our opinion is the 25' x 75' corner spot at 570 Jefferson Avenue...

Not only did Massey Knakal handle the sale, they rolled out some sweet financing on 75% of the debt at 3.25%!  We're no math wiz, but if you've got $5.7M borrowed at 3.25% on something making over 7% by next year... that's not a bad way to deploy $1.9M.  While 4,000 sqft. fixer-upper townhouses 2 miles west sell for $2M cash and up, it's interesting to see what else $2M can do.


Pro's:  performing asset, diverse package in upcoming area, almost a 7-cap with rents still way below market

Con's:  already sold, takes a hefty downpayment, overall property condition is unknown, must be a beast to manage

Ideally:  the sales price may seem lofty, but this is comparatively not that capital intensive for a purchase that makes so much sense on paper