Sale at 162 Columbia Heights #4

Brooklyn Heights was more or less unscathed by the downturn. No idea why they paid over ask - multiple bid situation, possibly.

That place is directly on the promenade, with a terrace that overlooks the river and Manhattan. That's quite rare, and not really comparable to any other type of apartment in BH. Most of the buildings with that kind of view are private houses, not coops. Rare=expensive.
What's really puzzling is that average apartments in BH, even those without a view, are often as expensive as similar ones in Manhattan.

And dumpy. As something of a connoisseur of BH apartments over the past couple of years, it's fairly shocking how cramped they are and how often they need significant updating, even at those prices.

And I agree on the terrace/promenade rarity being a big factor in the final price, for what it's worth. I loved that apartment, though it was way out of my price range.

there are people waiting years to get one of those. it's no surprise that people are willing to pay top dollar to get the view and a rather large terrace.

Multiple bids and an all-cash offer. The buyers are not clueless, they just had the money to get just what they wanted. All things considered, $865,000 for a small 2 bedroom apartment with outdoor space is a small premium for the location and view.

But it's a walk-up, needs to be renovated, and the "second bedroom" is about 70 square feet. Further, the BQE is in the backyard. I agree, that the view is worth something, but this seems excessive. There was a 1 BR on Willow with a great view of Manhattan that went into contract last month and also needed to be renovated for $550K, and it was larger. Granted, no brownstone charm and no outdoor space, but better layout and elevator building with a doorman. Seems a little silly to pay that $865. And for what it's worth, views in Brooklyn Heights are more common than you think.

To some it's a walk-up on the BQE, to others it's the top floor of a 25ft-wide house on the promenade. Anyway, it's a strong price, but I wouldn't call the buyers idiots. Someone who overpays for a dime-a-dozen apartment is an idiot, but this place is very rare. They could afford to overpay by 5-10%, that makes them rich, not stupid.

How do you know they can afford it?

The speed of the transaction tells me it was an all-cash purchase.

They financed it with Chase.

The reality is that there are other apartments in brownstones with outdoor space in similar condition that have closed for that amount or less and are much bigger.

But not with the view. Again, BH has not suffered in the downturn the way other areas have - much to my chagrin. A unique property came on the market and it received multiple bids. Maybe you wouldn't have paid that much, but there were clearly several people who thought it worth more than the as and were willing to pay.

OK, if you don't believe me, check this out: http://streeteasy.com/nyc/closing/906405. This apartment was nicer than the Columbia Heights one and sold for $100K + less. Just b/c someone overpaid for the Columbia Heights one, doesn't mean that what they paid was reasonable based on mkt comps, which is what you seem to infer.

The Columbia Heights apt definitely has superior views than the Willow Street apt. And that stretch of Colubmia Heights is defnitely a premier block. May be other differences in the buildings such as better common spaces, etc. But the biggest difference is that Willow apt closed in a year ago when the market was esentially not moving. This sale shows the reflation of the market.

Actually, they are both brownstones and there was no noticeable difference in commons spaces (which in the brownstone is the entranceway). The stretch of Willow is just as nice, if not nicer. View was slightly better in Columbia apartment, but not by much. Further, outdoor deck on Willow was huge. And if you look at BH prices, there wasn't much deflation nor has there been much reflation. I think they just paid a silly amount, but there are always people out there who are so obsessed with owning an apartment that they pay more than comps dictate.

There are always people that are just clueless about RE. Acouple of very successful friends were very happy about renting an apartment for around 30% more than they should have. They are just not into the sector but work in their own professions with total dedication and huge success.

Obviously they regreted afterwards when they got to know how much less others were paying. Even very smart people can be dumb with their money from time to time.

BrooklynHeights - I don't know how much mortgage they took out (NWT?) but the bank's appraiser must have thought the comps worked.