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

Posted on August 23, 2011 by BeatingUpwind

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…

540 West 149 Sells for $609K – $183/sq. ft.

Posted on August 9, 2011 by BeatingUpwind

Yesterday I went over a low comp in Sugar Hill that sold for $79/sq. ft. But there was another sale recently – just 3 blocks south of the other one. 540 West 149th Street sold on 6/30/11 for $609K. The building is 16.67′ x 50′ x 4 stories – so 3,334 sq. ft. though officially it’s 3,400 sq. ft. At the lower square footage it nets out to $183/sq. ft. at the higher square footage it’s $179/sq. ft. So while the prices are just $119K apart, on a price per square foot basis the 149th Street property is more than twice as expensive.

So what do you get for the extra $120/sq. ft.? You get original details and a better location. This building still isn’t in the Sugar Hill historic district, and the buildings immediately west (542-548) are low-income housing. But unlike the 152nd Street property the block is predominantly brownstones / townhouses. The low-income housing next door is very nicely done (though they have the tell-tale wheelchair ramps you rarely find with owner-occupied houses). And the ever critical subway access is somewhat better than the 152nd Street property – just a 7 minute walk to the A/B/C/D express trains @ 145 and 5 minutes to the 1 train @ 145.

If I had to guess I would say original details probably made the biggest difference in the price. Mind you, the property still needs a complete gut renovation, but you’re not starting from scratch – you’ve got floors and walls, crown mouldings, fireplaces, doors, etc… Here are some pictures that show what I’m talking about…

That’s a very different renovation than the one that will be needed at 535 West 152. At 152 the new owner is probably starting from scratch (like we our with our place) – rebuilding all the floors, the walls, the roof, etc. With this place it’s more about restoration – repairing what’s there and adapting it for modern use. It will still need all new electrical and plumbing. There will be rotten floor joists that have to be replaced, etc.

The place on 152 is best suited for someone who wants a rental property – since it has more square footage than any homeowner would ever need and the block is predominately a rental block. This place would appeal more to a homeowner who wants a wonderful old place that needs TLC.

Very different places with very different prices.

A Sugar Hill Townhouse Shell For $78/Sq. Ft.

Posted on August 8, 2011 by BeatingUpwind

I think someone just got a pretty good deal on a Harlem townhouse shell… 535 West 152nd Street just sold for $490K. While the number may seem like it’s inline with other shell prices, apparently the place has 6,290 sq. ft. despite the fact that it’s just 16 2/3 feet wide and just 4 stories. That’s almost double the square footage of many Harlem townhouses. The place has an extension that stretches back 90 feet. So given the +/- 5 foot set back in the front – that’s nearly 100% lot coverage (though I’m sure there’s some sort of side yard).

At 6,290 sq. ft. the buyer bought the place at $78/sq. ft. – which is an incredible price. I’m not sure exactly what the condition was inside. The issue is that 6,290 is 566 sq. ft. over the max allowed square footage of 5,728. If it’s in really bad shape it’s possible that DOB might not allow the new owner to build back to restore the building to the original 6,290 sq. ft. Still, even at 5,728 sq. ft. they paid $86/sq. ft. – which is still very low.

The reason why this place went for such a reasonable price was because the seller was realistic about the place’s value. The seller was the same developer we purchased our townhouse from – TPE Townhouses Harlem (TPE is part of Tahl Propp – a big Harlem landlord). This was possibly the last of about a dozen townhouse shells they were selling. They weren’t giving away the townhouses, but they knew to sell a dozen shells you gotta take the best offer – even if it seems low.

Just to put this building in perspective… It’s outside the landmark district, and not all that close to subways – it’s a 6 minute walk to the 1 train at 157, 7 minutes to the C train at 155, and 8 minutes to the A/B/C/D trains at 145. The block it’s on is also mostly apartment buildings – not the charming tree-lined brownstone blocks you find elsewhere in Harlem. So it’s sorta lacking on location.

So there are great deals out there still. Now that I’ve got my real estate license and have access to all the listing databases it’s interesting to see what’s on the market. There are some interesting opportunities out there – but as always price continues to be an issue, as is matching the building to the particular needs of the buyer…

40 Story Buildings In Washington Heights?

Posted on July 31, 2011 by BeatingUpwind

Our contractor took the week off this week (long story), so I figure I’d do a blog post I’ve been meaning to do for a while now… Whether really tall buildings are appropriate uptown.

Back in early May Quadriad proposed a set of 40(ish) story buildings for our old neighborhood – around 190 and Broadway. They’d literally tower over all the buildings around them. Here’s what they were proposing… Phase 1 would be three towers built on top of the 191 Street IRT station (the 1 line)…

Phase 2 would knock down a funeral home across the street and put up a 4th building that’s shorter…

We got into a bit of a discussion with a friend of ours who lives quite near where these buildings will be built. She thinks they’re a horrible idea, but Dan and I sorta like them. Our friend’s argument is that they’re inappropriate for the neighborhood. Nothing in Washington Heights is 40 stories. I think the highest is 20-some stories. She prefers the “as-of-right” option the developers have proposed, which looks like this…

To which Dan and I say “eh…” It’s just boring architecture.

Our friend’s other argument is that luxury condos (or luxury rentals) are a bad idea – that Washington Heights should remain largely affordable housing. The irony is that she’s one of those rare Manhattan Republicans. How a Republican can be opposed to the interests of developers beyond me – I thought that was one of the defining characteristics of Republicans in New York. The other thing is that the capitalist (Republican?) argument should be that more supply => demand is accommodated => lower prices. In other words, if you want Manhattan to still have affordable housing you need more units on the market to meet the demand since the more there is of something, the lower its price will be. Clearly there’s not much vacant land in Manhattan – that means you need to build up.

Plus, all major development projects these days include affordable housing units. The bigger the project, the more affordable housing units you’ll get. So if you want affordable housing in Manhattan you should be in favor of projects like this one.

I’ve also heard people say tall buildings uptown will overburden the transportation infrastructure. But the Quadriad site is literally on top of a subway stop and less than a 5 minute walk to another subway stop. We’ve got pretty good subway access uptown that’s no where close to capacity. They could easily double the number of trains if they needed to, or extend the C train to 207. Transportation isn’t really an issue.

So what this boils down to is aesthetics and zoning and perhaps historic preservation. I had an architectural design professor in college who said “if you break the rules you need to do something really special”. Yes, the 40 story towers break zoning rules, but Dan and I think they’re good enough to warrant the rules being broken.

That isn’t always the case. For example Graceline Court (the silver and pink building in the picture below) stands out on the Harlem skyline, but it’s just incredibly boring…

Harlem is generally zoned lower than Washington Heights, so this is potentially a bigger issue in Harlem than it is in Washington Heights. I’m actually very much in favor of tall buildings going up in Harlem – but I want them to be interesting to look at, and I don’t want (too many) historically interesting buildings torn down in the process. Graceline Court is just dull – I want something better than that. I’d love it if they build a 40+ story building on the empty lot at 125 & Lenox where the rumor mill says a Hyatt (?) may be built.

So I say Go Tall Uptown (and make it interesting)… What does everyone else thing?

$2M Continues To Be Limit for Harlem Townhouses

Posted on July 25, 2011 by BeatingUpwind

A number of Harlem townhouses continue to flirt with the $2M mark, but few of them go over that amount. The latest to push $2M is 319 Convent Avenue – a single family house in Hamilton Heights which just sold for $1,971,830.

319 Convent is one of the grande dames of Harlem townhouses – 20 feet wide, 55 feet long, and 5 stories tall – so roughly 5,500 square feet, though officially the square footage is 3,596 which less than you’d expect if they didn’t count the basement. Still, a big grand ‘ol house.

While the location and scale of the house are exceptional, based on the available interior photos, the overall condition seems to be just fair to good. There are no kitchen and bathroom shots – which is always a bad sign, and in the photos they do show there’s peeling wallpaper and the floors clearly need to be refinished. I would also expect there to be 100 year old plumbing and electrical – so the buyer is looking at a minimum of $200,000+ to bring the house up to current standards – and I could totally see someone spending a half million or even more on renovations to really do a great job. It’s the type of house that deserves that level of money to be put into it.

Notice the peeling wallpaper over the door in the next photo…

All in all though – an incredible house that’s clearly been lovingly maintained in near-original condition. I think the new owners will have many happy memories in that house 🙂