Not A Great Time For High-End Mount Morris Park Townhouses

57 West 119 - facade

57 West 119 - Top sale in Mount Morris Park

I was just pulling comps for the Mount Morris Park area and was shocked to see there have been very few high end sales in the past year. Of the 30+ sales in the past year…

Only 4 sales were $1.5M or more

  • 57 W 119 sold for $1.75M in September ’10
  • 195 Lenox sold for $1.525M in June, but it’s large building so the price per square foot was quite low (around $230 / sq. ft.)
  • 148 W 120 sold for $1.525M in January
  • 64 W 119 sold for $1.5M in January

Only 1 sale was over $450 per square foot

  • 57 West 119 sold for approximately $495/sq. ft.
  • Four others sold for between $400 and $450 per square foot

That means there was only one really good sale (57 W 119) and in a few weeks it will be more than a year old and off the radar. At that point the highest comp will be 148 W 120 which sold for $440 per square foot ($1.525M).

That’s sorta sad. As much as real estate agents like to get listings, I don’t know how much the agents with the high end listings are enjoying all the work and advertising expense right now when not much of anything is selling north of $1.5M.

The problem is when there aren’t many high-end comps the banks ay be reluctant to lend on high-end properties because there are no comps to support the price. But the comps aren’t just a problem for high-end properties. Rehab mortgages are based on estimated future value – which is based on high-end comps. So if you bought a shell for $180 / sq. ft. and you want to put $200 / sq. ft. into it, you have to hope the bank’s appraiser finds just the right comps. If they’re lazy and pick the wrong comps you could have a serious problem. (Hint: meet the appraiser in person and hand him/her a list of comps you think are appropriate – and don’t forget rental comps! so they appraise the rental value correctly as well).

What is selling pretty actively are low end properties that need rehab. Quite a few properties have sold in the $125 to $250 per square foot range. It’s great that people are interested in rehabbing blighted and derelict buildings. Ultimately that’s the best thing for the neighborhood – especially if they’re homeowners who have a sense of investment in the community. But we really could use some properties selling in the $1.8M to $2M+ range to anchor the high end…

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