What Things Are Selling For In “High Five”

Posted on September 20, 2011 by BeatingUpwind

It’s getting really hard to find $500,000 shells around Mount Morris Park. I have a couple of clients who would love one (even a more expensive one) but the shells are getting bought up quickly and the few remaining aren’t for sale (or have huge complicating factors).

So the question then becomes where else can one get an inexpensive shell that’s a good investment? There’s a quaint little neighborhood just north of 125 on either side of 5th Avenue. A few of the townhouses in the area are just stunning – far more interesting than what you see in other parts of Harlem…

Because it straddles the line between Central Harlem and East Harlem it’s a bit hard to describe the neighborhood – is it East Harlem or Central Harlem? Apparently some people call the area “High Five”. Think what you want of the label, but it’s clearly a distinct little neighborhood that needs a proper name.

To me the boundaries of the neighborhood are Lenox Avenue to the west (but not including Lenox), probably Madison to the East (both sides), 126th to the south, and 130th to the North.

The north and east boundaries are a little fuzzy though… To the east there are a few blocks between Madison and Park that might fall into High Five (since they’re generally consistent with the High Five aesthetic, and don’t fall into any other neighborhood). And to the north 130th is Astor Row which is a distinct area – it’s possibly part of High Five but also a distinct area of its own. By the time you get to 131 the blocks become dominated by apartment buildings – there are a few townhouses, but the core of the High Five character is lacking.

Unfortunately the area isn’t landmarked nor is it on the National Register of Historic places. The only townhouse that’s landmarked is the Langston Hughes House – 20 East 127 between 5th and Madison (see picture to the right). The Langston Hughes House is an incredible place that desperately needs an owner that will love it, care for it, and do a historically appropriate renovation (the original detail is incredible). Unfortunately it has a rather troubled past…

I went through a place close to there with a client the other day and afterwards I pulled comps and was rather shocked at how reasonable the prices are…

In the past year two SROs (class C5 buildings) sold in High Five… 1990 Madison was the most recent (4/8/11). We went through it twice when we were looking for a place – it took a long time to sell. It’s a big, wonderful ark of a house (see pic on right) that was in habitable but rough condition. It had high taxes, no certificate of no harassment and there was trouble with drug addicts in the house next door (which has since been resolved). It sold for $525K which works out to be $97/sq. ft.

[Notice the new owner of 1990 Madison is rebuilding the stoop with granite. Sure, it will last forever, but it’s a completely odd material to mix in with brownstone. Stopping choices like that is what landmarking is all about – but the area isn’t landmarked]

The other SRO that sold was 66 East 127 (see pic of red brick building to the right). It sold for $300K back in February which works out to be $83/sq. ft. It’s on the other side of Madison, across the street from a large school, outside of what I’d consider to be the core of High Five. I can’t find any evidence it was up for sale. There was a foreclosure AND a tax lien the year before and then what seems to be a pretty quiet sale this year. Still, it’s price per square foot is inline with the price paid for 1990 Madison, though this might be some sort of inside deal and not reflect market price. It is vacant, and the new owners apparently want to flip it (according to one of the guys on the street).

Even at the higher end – 8 West 127 (5 family) sold a month ago for $1.6M (see pic on right – the 5 story place with no cornice), which may seem like a good price but it’s got 7125 sq. ft. (19 x 75 x 5 story), so the price per square foot was just $225/sq. ft. – and that’s fully renovated – they even added a floor during the renovation.

I pulled a lot of other comps and all tell pretty much the same story. Even the luxury condo on 127 just off Lenox is only selling for $395/sq. ft. and condos typically sell for more than townhouses (on a $$/sq. ft. basis). So I view $400/sq. ft. as the ceiling in High Five, though I could see one of the fabulous ones on 5th Avenue selling for more.

The highest townhouse comp I could find was 2107 5th Ave (4 family, renovated – see pic of light colored townhouse to the right) which went for $1.15M (roughly $295/sq. ft. – it has an extension, so actual square footage is a bit fuzzy). A client of mine went through it and said some parts of the renovation seem really well done, other parts feel cheaply done. His guess was that the owners started a high end renovation and then ran out of money mid-way through at which point they started cutting corners.

11 E 127 (3 family, fully renovated) went for slightly more – $1.175M, but it’s price per sq. ft. was lower @ $268/sq. ft.

There were no sales of one and two family homes in High Five in the past year. (Well, there was one but it appears to be one owner buying out another owner – so it’s not a proper comp.) One and two family homes sell for more than 3 and 4 family homes, so it’s completely possible something will sell in the $400/sq. ft. range – it just hasn’t happened recently.

The comps all make sense… Renovated places are selling for $150-200/sq. ft. more than shells and renovating a shell costs about $150-200+/sq. ft. depending on the condition of the shell.

The neighborhood isn’t as established as places like Mount Morris Park, but with Red Rooster opening up at 126 & Lenox, and a nice grocery store going in at 129 & Lenox, and Wild Olive on 125 just east of Lenox – things are picking up. Personally I feel as though it’s a great long-term place to invest if you buy on the right block. But prices are likely to be more volatile than they would be in more established neighborhoods – so buyers need to be careful about when they buy and sell.

I should also mention the people in High Five are incredibly friendly. A friend/client of mine was sitting on a stoop over at Madison between 129 & 130 a week or so ago when a manhole blew directly in front of him. The fire department and ConEd were called and all the neighbors came out onto the street. He and I spent nearly 2 hours with them and I have to say everyone was warm, welcoming and pretty great. I’m sure your experience will vary block to block, but there are some great places to live in High Five.

When 1 Cent Makes A $10,000 Difference

Posted on September 5, 2011 by BeatingUpwind

I’m baffled… 116 West 131 sold a little over a month ago (7/20/11) and it sold for $1,000,000. I have no clue who the buyer’s real estate agent and lawyer were, but both of them should have their licenses revoked (IMHO). If they had negotiated a price one cent less it would have saved the buyer $10,000. How can two real estate professionals make a mistake like that? Seriously, I don’t get it.

The reason why one cent makes a $10,000 difference is because New York City has a 1% “mansion tax” on properties that sell for $1M or more. So if the sales price had been $999,999.99 the buyer wouldn’t have had to pay the mansion tax, but add a penny and they have to pay $10,000 in tax.

Enough about that… Let’s look at the property as a comp…

Fridge blocking stove in small kitchen

The sellers originally asked $1.495M back in May of 2009. Finally this year they dropped the price to $1.195M and it sold – but even then they had to come down nearly $200,000 – but honestly that’s pretty standard with Harlem townhouses – the asking prices are usually way over where they sell.

The building is 17′ x 48′ x 4 stories (though the lot is 16.67′ wide) so it has roughly 3,200 sq. ft. That means the cost was about $312/sq. ft. The building is a legal 3 family that was renovated in 2003 and got a new boiler in 2008. Overall, it seems to be in good condition.

Bars on windows on ground floor brownstone rental But the renovations are just “rental grade” – small, Home Depot-esque kitchens, etc. My favorite detail is the picture above showing the fridge blocking the stove – not exactly a marvel of architectural ingenuity…

I’m guessing there is a 2 or 3 bedroom duplex over two 1 bedroom (or studio) floor-thru apartments – at least that’s the configuration that would make the most sense. Then again with kitchen configurations like the one in the picture above, there’s a good chance they did a less efficient layout.

Taxes on the property are higher than average, but not outrageous – $5,517 this year and projected to go to $5,755 next year.

It’s a 5 minute walk to the 2/3 at 135th Street. A/B/C/D trains are a fairly long walk – 11 minutes – much of which involves walking past the St. Nicholas Houses.

Besides the lesson of never buying a property for exactly $1M, this sale shows that there are affordable properties out there that don’t require renovation. If your funds are limited now, but you want a property that you can improve later – a property like this is perfect. You live with rental grade details in the short term and when you have the funds you renovate and make things nicer.

Upper End Of Harlem Townhouse Market Is Doing Better

Posted on March 9, 2010 by BeatingUpwind

If you own a townhouse in Harlem you’ll be happy to hear that the market has hit bottom and is now starting to go back up. A few months ago I pulled a list of Harlem townhouses that had sold over $1M and the list was pretty short (only 5), the highest price was just under $1.7M and the price per square foot was pretty miserable. PRIME locations like Strivers’ Row were getting in the mid-$300s/sq. ft. and ones that needed significant TLC on decent blocks (like Hamilton Terrace) were selling for just under $300/sq. ft.

Well, if you bought at those prices I think you bought at the bottom of the market. Things are much better now. The number of sales over $1M has doubled to 10 for the past 6 months and at least one of the properties is back over $500/sq. ft.

And here they are…

262 W 139 St (Strivers’ Row) – $1.85M, 3,660 sq. ft., $505/sq. ft., two family with an owner’s triplex over a ground floor rental – This place is ABSOLUTELY IMMACULATE. It was an over the top renovation planned back when you couldn’t help but make money flipping townhouses in Harlem. Things didn’t go very well for the developer/seller, but the new owner has a stunning place to live (with a garage!)
14 W 120 St (Mt. Morris) – $1.385M, $3,37 sq. ft., $456/sq. ft. – 18′ 4 story brick townhouse literally across the street from Marcus Garvey Park. SRO restricted. HPD says it has one class A apartment and 9 class B rooms. For some reason DOB has it classified as 4 family, but is aware it’s SRO restricted.
116 W 120 St – $1.485M, 3,636 sq. ft., $408/sq. ft. – 20′ 4 story painted limestone townhouse. Surprisingly this is an SRO restricted old law tenement. HPD says there is one class A apartment and 6 class be “rooms”. DOB still classifies it as an old law tenement, but doesn’t realize it’s SRO restricted.
7 W 119 St (just outside the Mt. Morris Historic District) – $1.098M, 2,794 sq. ft., $393/sq. ft. – This was a shell and was recently gut renovated with an uneven mix of high end and low end finishes. We went through it. The building is one of the smallest townhouses you’ll see – 14′ x 47′. The rooms in it are TINY and the “back yard” is just a small deck. Our couch wouldn’t come close to fitting in the living room. It’s a technically a 2 family since there’s a VERY small studio apartment in the front half of the ground floor. I have no clue how they’ll rent such a small space. It should have been made into a single family. In my opinion the buyer over paid, but that’s a good sign as far as the market goes.
106 W 118 St – $1.275M, 3,400 sq. ft., $375/sq. ft. – 17′ x 49′ 4 story brownstone. It’s a legal 3 family, that was converted about 10 years ago.
15 W 122 St (Mt. Morris) – $1.375, 4,180 sq. ft., $328/sq. ft. – 18′ x 53′ 4 story brownstone. This is technically an SRO. HPD shows it having one class A apartment and 8 class B rooms. However, DOB shows it has being an SRO-restricted 2 family.
590 W 152 St – $1.2M, 3,744 sq. ft., $320/sq. ft. – 16′ x 52′ 4 story limestone townhouse with a C1 commercial overlay on it’s zoning. Like the last one, HPD shows it having one class A apartment and 8 class B rooms. However, DOB shows it has being an SRO-restricted 2 family.
76 Edgecombe Ave – $1.436M, 4,611 sq. ft., $311/sq. ft. – This is a lovely 19′ brick townhouse on a corner lot. There would be incredible light in the building since the long wall faces south (too much for my tastes, but I know others like southern exposures). It’s a completely legal 4 family with no SRO restrictions.
226 Lenox Ave (Mt. Morris) – $1.25M, 4,932 sq. ft., $253/sq. ft. – A very grand 20′ brick townhouse that was a former funeral parlor. Curiously this is technically a rooming house with no apparent SRO restrictions – somehow with the funeral parlor in there they avoided SRO status. In addition to the funeral parlor there are 2 class A apartments.
146 W 136 St – $1.1M, 4,590 sq. ft., $239/sq. ft. – 17′ x 56′ 4 story townhouse. It shows as 3 family, but DOB is still showing it as SRO-restricted (probably an error). The new C of O was just issued a year ago, so this is newly renovated. This was an incredible deal. The weird part is I can’t find any record of it having been for sale, so there has to be more to this than you can see at first glance.

So there you have it – the top sales for the past 6 months for Harlem townhouses. Considering that just about every week a townhouse will sell in Brooklyn for over $2M, that’s sorta a sad lot by comparison, but at least things are better than they were a few months ago.

Where things are selling…

It’s also interesting to note that none of the sales were in Hamilton Heights / Sugar Hill. 6 of the 10 were south of 125th in and around the Mt. Morris Historic District. Given that our place is in the same area the good news is that we’ll have no problem with the future value appraisal for our rehab loan. It would seem our place will be worth about $400/sq. ft. when it’s completed.

Prices on shells will go up too…

That brings up another point… The sum total of all of these numbers is that when the top end of the market goes up, everyone goes up. Let’s take our case. When we were bidding I was thinking our place would be worth maybe $325-350/sq. ft. when it was done. So if we put $150-200/sq. ft. into it I had to subtract that from the finished value for things to make sense. We bought at $122/sq. ft. so we’d be safe no matter how you looked at it (provided the market didn’t continue to go down). Now that the top number is $400/sq. ft. things are significantly better.

I still think the biggest risk are the ones in the middle that need more work than you might think. It’s still easy to over pay for those properties. The best bets are shells and ones that are recently renovated.

Buy now! Buy low!

Unless there’s more economic turbulence, I’m firmly convinced now is the time to buy a Harlem townhouse. The trick is finding one in a decent area, without SRO issues, where they’ll sell low.

259 West 139th Is An SRO, Not 2 Family…

Posted on November 18, 2009 by BeatingUpwind

I really don’t get real estate brokers sometimes. They get listings and just never try to understand them. In this case a broker for Sotheby’s is telling our broker that 259 West 139th Street (in Harlem’s prestigious Strivers’ Row) is a 2 family home when it’s actually an SRO (a Single Room Occupancy boarding house). In fact they even state the lie inaccurate information clearly on their own website (click the quote below to see an image of the full page it comes from)…

If you know anything about townhouses in New York that statement looks very suspicious… A two-family “currently configured as a rooming house”? Rooming houses are never “zoned” two family. And zoning has nothing to do with the number of families anyway – zoning has to do with the height, bulk and general use of the building.

So what exactly is 259 West 139th?

Let’s start with what the NYC Department of Buildings says… The DOB’s property profile for the building says it is “SRO Restricted”. If you follow the link on that page to see the certificate of occupancy for the building you see there is a C of O for the garage that was issued in January 1950, but no C of O for the main building (which is typical of older townhouses). There is one other C of O linked to that property, but it’s an error – a temporary C of O for a completely different building.

Next, let’s look at what the Department of Housing, Preservation and Development (HPD) says…

HPD's classification for 259 West 139th Street / Strivers' Row

The key thing to notice there is 0 “A Units”, 14 “B Units”. “A Units” are normal apartments, “B Units” are rooming house rooms. So 259 West 139th Street has no legal apartments and instead has 14 rooming house units. That means Sothebys is suggesting a illegal use of the space – you can’t rent an apartment that isn’t registered in some way with the City and DOB and HPD are the two ways to make an apartment legal.

So both DOB and HPD say the place is an SRO, ergo it’s an SRO.

When you head over to the Department of Finance you see a different story. There you see it’s building class C3 which stands for a 5-6 family home.

Department of Finance's classification of 259 W 139

Now, it’s typical for Department of Finance to get it wrong and in this particular situation it doesn’t make much of a difference since 5-6 family homes and SROs pay the same amount in taxes. But the point is if it were a 2 family home the owner would have it classified correctly with DOF since 4+ family homes pay 7 times the property tax as 1-3 family homes. That’s not an error you’d let slide for very long.

259 West 139 - Strivers' Row I am SO tired of real estate agents giving false and inaccurate information on their listings. It’s really not that hard to find out the truth. But it’s common for real estate agents to answer the question “Is there a certificate of no harassment in place?” with “the building can be delivered vacant”.

If you’re outside New York you’ll be excused for not knowing the absurdity of that answer but in the 1980s New York City went through a real estate boom and low income people were being evicted from their apartments and becoming homeless. Rooming houses are where the poorest people in New York live. If you lose your place at a rooming house there just aren’t any cheaper options and you wind up homeless. So in 1985 a moratorium was placed on conversions of rooming houses (SROs). A year or two later that was reworked so landlords who wanted to do an SRO conversion were required to get a “certificate of no harassment” where the City verified that the landlord didn’t force out or intimidate any tenants in the prior 3 years. You could also be turned down if there was an open violation for an illegal conversion.

Certificates of no harassment are vital for anyone buying an SRO and wanting to use it for something other than an SRO. It really doesn’t matter if it’s vacant and any licensed broker selling a townhouse should know that. And lying and saying it has a C of O that it clearly doesn’t have is completely inexcusable.

Thank god Property Shark and the City of New York put all the info online and make it easy to tell brokers they’re lying. It’s amazing how quickly their story changes when you say you’ve looked up the property up on Property Shark. Still, it’s a huge hassle that is completely avoidable. I feel sorry for the poor buyers who don’t understand how to find the information and learn the truth. If you don’t do your due diligence and you have a crappy lawyer who doesn’t do it either, it can devastate you financially.

What’s It Worth? 54 West 130th Street (Astor Row, Harlem)

Posted on September 23, 2009 by BeatingUpwind

Harlem townhouses are a very strange market right now and figuring out a proper bidding strategy can be tricky to say the least. I thought I’d step through our thinking on one place in particular where our bid was just rejected to bring out some of the issues.

The townhouse we were bidding on was 54 West 130th Street which is one of 28 townhouses known as Astor Row in Central Harlem. There’s a good Wikipedia article on Astor Row, and the New York Times did an article on it recently as well. Astor Row townhouses are definitely not typical Harlem townhouses. They are brick with wooden porches and are generally narrower than their lots so they appear to be in pairs.

Astor Row, Harlem

We had a really hard time coming up with a bid. At first glance, and on an emotional level, the place looks like it’s worth $800-850K, but the more thought we gave it, the lower our bid went…

Let’s start with what’s right with the place…

It has wonderful karma
Even though there are locks on all the bedroom doors (hinting it’s been used as a rooming house at some point), it appears otherwise to be an intact single family home, which is quite rare.
There are lots of original details and they’re in pretty good shape for a 126 year old house.
It appears to be in great shape overall.
It has a unique layout with three large bedrooms per floor – so you get the space of a 5 story townhouse without the extra flight of stairs.

Wonderful original detail in Astor Row townhouse

It’s rare to see things in that condition these days. You see shells, and you see things where the details have been ripped out, but that particular combination isn’t something you see very often so it’s hard to put a price on it.

But there are problems as well. I’ll go over them one at a time to prove my point…

Problem #1 – The next door neighbor

The house next door (#56) is quite dilapidated. When the Astor Foundation was giving away new porches and free façade restorations the owner at the time apparently said “no thanks”. It’s possibly the worst house on the block. Here are a couple pics…

56 West 130th Astor Row - front 56 West 130th Street Astor Row - rear

When you look at the front you think it’s just a run down eyesore. It’s not boarded up and we think we remember seeing someone go in the first time we were around there. But when we saw the back of the building we realized it’s essentially a shell that’s getting rain into it’s interior through all the broken windows. Given the condition that’s evident in the rear, it needs to be boarded up. Either the person in it is living in squalor or it’s being used for drug activity. In either case it would be too easy for it to catch fire and spread to the buildings next door, so living next to it is a scary prospect.

And it’s not just the next door neighbor….

The two at the end of the block are run down and owned by a Pentecostal church which is taking their sweet time renovating them.
In the other direction 2 doors down there’s another that’s a shell
Further down the block there are a few others that are run down SROs and/or shells.
Directly across the street there are a couple that are shell-like. One seems to have been gutted and then had all work stop.
There are a couple other run down SROs on the other side of the block.
The back yard is small (since so much room is given to the front yard) and there are rather rough rental buildings directly behind the townhouse. This is not like Hamilton Terrace where you have people on Convent Avenue looking at you. Go take a look at who’s hanging out in front of those buildings and you may not be so comfortable with them seeing everything you do in your back yard.

All in all you can’t use prime locations as comps for this townhouse. No matter who says it (including the NY Times), there are definitely more than “a couple” problem buildings on the block.

Problem #2 – Plumbing and Electrical

While pretty much everything appears to be in working order, when you look closely you see a different story and realize that it needs all of the plumbing and electrical replaced. There are maybe two outlets per room. Most rooms don’t even have light switches. And looking at the electrical panel I’d guess it has maybe 100 amps of power going into the house. I think we have 200 amps in our apartment.

As far as the plumbing – it’s not up to code – it’s been done with PVC which is illegal in NYC. Given that plumbers can probably lose their license for using PVC I doubt the a licensed plumber did the work.

PVC drain pipe

Now think about what it will take to replace all the plumbing and all the electrical in a house where you want to preserve the original details. The work is best described as “surgical”. If it were a gut renovation it would be so much easier, but this has to be done by highly skilled workmen and will wind up being quite expensive.

Problem #3 – Other Major Expenses

Given that all the plumbing has to be redone and the bathrooms are out of date (at best) that means all new bathrooms. Likewise the kitchens (there are two – the main one in the basement and a kitchenette on the top floor) both need complete overhauls. So you’re looking at 3 new bathrooms and two new kitchens – none of which come cheap.

Kitchen in need of renovation Dated bathroom

Add to that all new windows if not immediately, then pretty soon. The windows on the front can’t be done cheaply – they have to be approved by the Landmarks Commission. The one in the living room is nearly 5 feet wide and 7 feet tall – there’s no cheap way do a window like that and get it past Landmarks.

And if you’re going to spend that much on the place, then you’ll probably want to put in things like central air conditioning, etc… So the costs will keep adding up…

By the time you’ve finished work on that house you will have spent about the same as a low-end gut renovation. You’ll have a great place (except for the neighbor), but you’ve got to factor all those costs into your bid.

So how do you bid on a place like the Astor Row townhouse?

Take what I’m about to say with a grain of salt – our bid was not successful…

First, let’s look at the comps… There aren’t any perfect comps for this townhouse. There aren’t that many sales and none of what is selling is in a similar condition, in a similar location. So all you can look at is a range and then figure out where it falls in that range.

At the low end you have shells (or ones that are essentially shells). 6 West 128th Street (two blocks down) sold for $144/sq. ft. on 7/22/09 which is 25% below what it sold for 5 months earlier. Also close by is 46 East 126th Street which sold for $98/sq. ft. on May 14th, but that one is affected by the rezoning on 125th Street. There are a few other comps but the ones in the low end average around $120/sq. ft. and never really get much above $145/sq. ft.

At the high end you have renovated ones that literally need no work and are in mint condition. The best comps there are 63 West 127th Street which sold for $214/sq. ft. on August 17th, and 133 West 131st Street which sold for $284/sq. ft. on June 8th. I would say mint condition townhouses in that area average around $250/sq. ft. If after renovations you’ve spent much more than those, then you’ve over invested.

54 West 130th has 3,525 square feet (officially, not including the English basement – there is no cellar, so much of the basement is mechanical). So, if it were a shell it would sell for around $425K. If it were in mint condition it would sell for between $875K and $1M.

It’s hardly in mint condition and needs at least $350K in renovations – probably more like $400K. If you start with the high end of the mint comps and subtract the minimum you’d spend on renovations you come to $650,000. That’s actually what we bid, but it got rejected because “there was a substantially higher offer”. But looking at it that way is a recipe for overspending since renovations will probably cost more and the market might fall. But we loved the place and were willing to spend more than the comps warranted to get it. Honestly, I think the person who put in the “much higher offer” is insane. We’d never go “much higher” on that place – not with those neighbors and in that condition.

$650K is also exactly half way between $425K and $875K (the low and the high), and the house is somewhere between those two conceptually as well – definitely not a shell, and definitely not mint.

On a price per square foot basis we bid $184/sq. ft. and it needs about $100/sq. ft. in renovations. So our final investment would have been in the range of $285/sq. ft. – actually higher since $650K was just our initial offer and we were prepared to go up. There’s just not much selling around $300/sq. ft. so it would have been an iffy investment especially if real estate values continue to go down and even if they stay flat.

I think it’s instructive to look at the top end of the market, since after renovations that’s where you’d end up… Here are all of the Harlem townhouses that sold for more then $1M in the past 6 months…

235 W 132 – 7/8, $1.05M, $291/sq. ft, 3 family
I don’t understand this one – too close to projects, not close enough to subways
310 W 133 – 7/10, $1.06M, $212/sq. ft., 4 family
Odd little 2 story building sandwiched between two apartment buildings
236 W 138 – 7/20, $1.693M, $277/sq. ft., 2 family
Striver’s Row
[edit: On closer examination the square footage of this house seems misstated. It’s officially 6,060 sq. ft., but it’s twins on either side are in the neighborhood of 4,500 to 4,700 sq. ft. At that square footage it sold for more like $360/sq. ft. – but it’s a prime Striver’s Row townhouse with recent renovations so that actually isn’t all that surprising.]
48 Hamilton Terr – 7/27, $1.1M, $292/sq. ft., 2 family
The one we know well. Needs work, but very much livable.
883 St. Nicholas Ave – 7/29, $1.04, $235/sq. ft., 3 family
Recently renovated. Appears to be in great shape.

For being the high end of the market, that’s not all that impressive. Most of those are just over $1M and they averaged $261/sq. ft. Subtract $100/sq. ft. for the renovations needed to this townhouse and you have $160/sq. ft. or $564,000.

My other rule of thumb is that townhouses should be going for 40% of their 2007 comps – that’s just how much the market has come down. In 2007 a renovated Astor Row townhouse went for $1.875M and 40% of that number is $750K, but that was a renovated townhouse which only shows that one should use the lower end of the mint comps.

We put in what we thought was a very competitive offer and it was rejected. It will be interesting to see how their other offer progresses and what it eventually sells for. There is an emotional factor to buying real estate and this property definitely elicits that. I just hope the new owner doesn’t regret what they paid for it after it’s all said and done.

Postscript: As I was writing this our broker told us the selling broker told her that another offer had come in over the offer that was “much higher” than ours. So now there’s a bidding war. I just don’t get it…

UPDATE: It’s now early March and the top of the market is clearly going up. I’d now guess this place will be worth $375/sq. ft. after about a $100/sq. ft. renovation making it’s current value around $275/sq. ft. That means the value has gone up substantially – $950K is not unreasonable for this property now. You won’t be making money on it, but won’t lose your shirt either. Thing was, back when I initially wrote this the comps didn’t come close to supporting a number of $950K. After having our offer on this place rejected, we did finally buy a place and paid $122/sq. ft. for a total shell. After renovations we’ll have about $300/sq. ft. invested in our place and the current comps say it’ll be worth about $400/sq. ft. While I love the karma of the place on Astor Row, ultimately we were shopping for a deal and Astor Row wasn’t a deal… However, someone will be very happy living there and it looks like they won’t need to worry about having lost money on the deal, which means they’ll have no regrets.