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$360K for One Bedroom Worth the Price? - Page 2 — Brooklynian

$360K for One Bedroom Worth the Price?

2

Comments

  • express
    express
    Before buying, I recommend you google and read as many real estate market reports on Brooklyn as you can before closing on an apartment. All reports point to an increasing inventory of apartments in NYC (including Brooklyn) and, therefore, steep price declines are likely to persist for at least 6 months. The fundamentals (i.e. employment and increasing inventory) don’t support price increases.
  • lo kee
    lo kee
    The city’s downturn, which started later than the rest of the country’s, will be “sharper and will go further, ” said George Sweeting, deputy director of the NYC Independent Budget Office.

    From the BK Daily Eagle

    Think that might affect property values
  • lo kee
    lo kee
    http://www.brownstoner.com/brownstoner/archives/2009/02/checking_in_on_43.php#comments

    These will go to $250 to $300 psf before this is over. Prime Manhattan is now being auctioned (auctioned!) for $600 psf.
  • arches
    arches
    Let's think about that....for $250/sq ft

    1,104 sq foot, 2 bedroom, 2 bath penthouse apt w private terrace, washer/dryer, etc:
    http://www.ahbrooklyn.com/property.php?id=385&type=coop&displaytype=coop

    $276,000
    20% down
    Mortgage = $220,000

    Monthly Pay't @5.5% interest = $1250
    Foregone interest on down pay't @1.5% = $59
    Taxes= $71
    Common Charges= $488
    Tax benefit (assume 28% Fed bracket)= -$346

    Total monthly cost: $1522

    Let us know when you score that deal...champagne is on me!

    ETA: Forgot first time homebuyer credit of $7.5k. Amortize that over the 6 years you're going to live there...true monthly cost is $1397. Goodbye rent control!
  • lo kee
    lo kee
    Mark my words.

    "This period of denial — the market-will-get-better mentality — is coming to a close,” Jonathan Miller, NY Times 2/25/2009.

    But... these remaining units on Sterling may go rental first. Woodrow Wilson on E Parkway, for example, is 40 percent owner occupied.
  • arches
    arches
    There's already one for rent, it seems (by an owner, though...not the same as "going rental").

    http://www.corcoran.com/property/listing.aspx?Region=NYC&listingid=1499107
  • whynot_31
    whynot_31
    I agree, I'm betting rental first too.

    ...hopefully the developer doesn't need $ so bad that they will take 50% off.

    However, if the developer borrowed tons of $ to build it, and can't cover those payments with rent rolls....
  • arches
    arches
    Lo Kee wrote: Woodrow Wilson on E Parkway, for example, is 40 percent owner occupied.
    Woodrow Wilson is a different ballgame....wasn't it fully occupied before condo conversion? The 60% of renters are probably hold-outs paying stabilized rent. If so, the rental is not by developers choice.
  • whynot_31
    whynot_31
    ...and, according to the note that is at the end of this article, the sky may not have fallen yet. Properties are not (yet?) being auctioned for no reserve price in Manhattan.

    It brings to mind the "rumors of my death have been greatly exagerated" quote.

    http://curbed.com/archives/2009/02/26/coming_soon_new_york_city_condo_auctions.php
  • lo kee
    lo kee
    whynot_31 wrote:

    However, if the developer borrowed tons of $ to build it, and can't cover those payments with rent rolls....
    They will be doing this:

    http://dumbonyc.com/2009/02/25/133-water-street-files-for-bankruptcy/#comments

    Or this:

    http://blogs.villagevoice.com/runninscared/archives/2009/02/magic_johnsons.php

    Or even this and this!

    http://curbed.com/archives/2009/02/27/greenpoint_building_morphs_into_luxe_guesthouse_hostel.php#reader_comments

    http://www.gowanuslounge.com/wp-content/uploads/2009/02/greenpoint-lodge.jpg

    My only repsonse here is I really hope the OP didn't go into contract at $360.

    Strap in kids, this is going to get uuuuugly.
  • whynot_31
    whynot_31
    yea, HPD might end up in the landlord role again!

    ...just remember, the city is the last landlord you want to have.
  • lo kee
    lo kee
    My job has afforded me the occasion (or, acutally punished me with the task) of travelling all over this past year and if NY becomes anything near to what the shoutheast, midwest or west looks like in terms of the market, we are f'ed indeed.
  • whynot_31
    whynot_31
    I'm just hopeing that they don't all come here looking for work.

    ...I fear an invasion of fat mall-walking football culture
  • lo kee
    lo kee
    They don't have bus fare, let alone cross-coutnry-move-to-the-most-expensive-city fare.
  • lo kee
    lo kee
    4th consecutive quarter of price contraction in BKLYN.

    http://www.prudentialelliman.com/NYCPhotos/retail_reports/BMO_4Q08.pdf
  • arches
    arches
    "When parsing Brooklyn by property type, co-ops outperformed condos and 1-3 family properties with a 2.9% increase in median sales price compared to the prior year quarter"
  • whynot_31
    whynot_31
    lo kee: the sky is falling

    arches: actually, no it isn't.

    whynot: don't worry, the prices in brooklyn will come down. Doom will arrive.
  • lo kee
    lo kee
    The sky isn't falling, the market is fluctuating. It's a market. It goes up, it comes down.

    But what do I know.

    "A 50 percent reduction in bonuses would push down prices by about 24 percent from their peak through mid-2010, said Sam Chandan, chief economist at property research firm Real Estate Economics LLC in New York. That would mark the biggest slide since 1980 when appraiser Miller Samuel Inc. started tracking Manhattan prices.

    “This will probably be the worst price correction the city has seen,” said Marisa Di Natale, senior economist at Moody’s Economy.com in West Chester, Pennsylvania."

    http://www.bloomberg.com/apps/news?pid=20601206&sid=afditfRjlofE&refer=realestate
  • lo kee
    lo kee
    arches wrote: Let's think about that....for $250/sq ft

    1,104 sq foot, 2 bedroom, 2 bath penthouse apt w private terrace, washer/dryer, etc:
    http://www.ahbrooklyn.com/property.php?id=385&type=coop&displaytype=coop

    $276,000
    20% down
    Mortgage = $220,000

    Monthly Pay't @5.5% interest = $1250
    Foregone interest on down pay't @1.5% = $59
    Taxes= $71
    Common Charges= $488
    Tax benefit (assume 28% Fed bracket)= -$346

    Total monthly cost: $1522

    Let us know when you score that deal...champagne is on me!

    I prefer Moet.
  • arches
    arches
    I'm not saying the mkt isnt going down....but I call total b/s on that calculation. I do like that he made the drop 24% on 50% bonus decline....a 25% drop would sound like he totally pulled it out of a hat.

    I'm going to be more aggressive in my prognostication.

    "A 50 percent reduction in bonuses would push down Moet and other champagne prices by about 27 percent from their peak through mid-2010" said Arches, a contributor to the Brooklynian message board.
  • whynot_31
    whynot_31
    right, then in the References section it would read like this:

    Arches, A.G. "360k for One Bedroom worth the Price", Prospect Heights ed., Brooklyian, March 19, 2009.
  • lo kee
    lo kee
    Lo Kee wrote: [quote=Cool The Kid]I would wait, the place is and has been unoccupied for a while, and market conditions indicate a downward trend. I wouldn't pay more than 300K for that place.
    I agree with this 100 percent.

    I hope I am wrong, but I strongly think that will be the market value of those places (maybe even less) by September 2009.

    I travel quite a bit for work and I have seen what the first twelve months of the recession have done to vlaues in the rest of the country, and the downward cycle is only beginning now in New York.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a2dO3befwGqc

    So lets see 15 percent of $360,00 is $54,000 = $306,000.

    And I think that is on the optimistic side (by maybe 5 - 7 percent), for that location.
  • arches
    arches
    First you told the guy to buy it for $320k ($533/sq ft)
    Lo Kee wrote: I would try to negotiate that price down to $320 at least and you should be able to break even if/when you are looking to move.
    Then you sounded the alarm about prices in PH dropping to $250/sq ft.

    And now you think we're heading to $468-$510/sq ft?
    Lo Kee wrote: So lets see 15 percent of $360,00 is $54,000 = $306,000.

    And I think that is on the optimistic side (by maybe 5 - 7 percent), for that location.
    My head!! It spins!! :)
  • lo kee
    lo kee
    Maybe I am not following you but I was going on this:

    $276,000
    20% down
    Mortgage = $220,000

    Monthly Pay't @5.5% interest = $1250
    Foregone interest on down pay't @1.5% = $59
    Taxes= $71
    Common Charges= $488
    Tax benefit (assume 28% Fed bracket)= -$346

    Total monthly cost: $1522

    Let us know when you score that deal...champagne is on me!

    So:

    The intial price on the OP unit was $360,000

    Then at 1:20 today my math:

    15 percent of $360,00 is $54,000 = $306,000.

    Plus another seven percent decline (again at 1:20):

    22 percent of $360,000 is $79,000 (approx) = $281,000.

    How are we that far off?
  • lo kee
    lo kee
    Oh wait... I see the OP unit was 600 square feet.

    Which by my calcs above would be about $460.

    You cited a different listing.

    Sorry bout that. My bad. I went to Trump University.

    But, that having been said I still think things could go lower than people expect.

    Hope not.
  • lo kee
    lo kee
    New York Home Prices Forecast to Drop 40%

    http://www.time.com/time/business/article/0,8599,1905085,00.html?cnn=yes

    Perhaps even my most pessimistic predictions, above, were too sunny.
  • meredithb
    meredithb
    don't believe the hype.
  • cool the kid
    cool the kid
    Lo Kee wrote: New York Home Prices Forecast to Drop 40%

    http://www.time.com/time/business/article/0,8599,1905085,00.html?cnn=yes

    Perhaps even my most pessimistic predictions, above, were too sunny.
    That was probably the worst article ever.
  • lo kee
    lo kee
    Cool The Kid wrote: [quote=Lo Kee]New York Home Prices Forecast to Drop 40%

    http://www.time.com/time/business/article/0,8599,1905085,00.html?cnn=yes

    Perhaps even my most pessimistic predictions, above, were too sunny.
    That was probably the worst article ever.

    Article was indeed cursory at best.

    Underlying study, while more substantial, was opaque as to methodology.

    When it comes to this, I am always guided more by the ever-mercurial "hunch".
  • cool the kid
    cool the kid
    Lo Kee wrote: [quote=Cool The Kid][quote=Lo Kee]New York Home Prices Forecast to Drop 40%

    http://www.time.com/time/business/article/0,8599,1905085,00.html?cnn=yes

    Perhaps even my most pessimistic predictions, above, were too sunny.
    That was probably the worst article ever.

    Article was indeed cursory at best.

    Underlying study, while more substantial, was opaque as to methodology.

    When it comes to this, I am always guided more by the ever-mercurial "hunch".

    Word up

    Whatever black magic they used to come up with those #'s doesn't matter though. Interest rates are def. gonna rise. Ppl are gonna lose jobs + further depress prices. And prices are still too high, even if everything was healthy. Who wants to pay $300K + for a 600 sq ft apartment in Crown Heights? At about 225-250K I think that would begin to be a good deal. Don't forget about maintenance. IDK about buyin a condo/co-op, doesn't seem worth it.
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