Sale at 273 Lenox Avenue

Yes, there is clearly going to be some discount because of the property's previous use. I just hope that the sellers have taken pains to make the property as appealing as possible (e.g., eliminated chemical odors, morbid paraphanalia). The pictures, unfortunately, don't show much.

Owners took off the funeral sign. Not sure they called in the Ghost Busters, however...

Sorry PH I just saw this. I am not traditionally a house broker, and am only now - after having been an agent for a few years - starting to work with my first townhouse customers (in BK, not Harlem). I would guess, though, that the effect will be more on liquidity than on price. Buyers who are freaked out by the house's history won't touch it at any price... just like there are some buyers who won't look at a cemetery or be near a dry cleaners'. Others will not really demand a discount - though perhaps an inspection for chemical residue, so the sale process would take longer.
Does that help?

ali r.
DG Neary Realty

i would check levels of formal deyhide with an inspector. It is or was used by all funeral homes and it's toxic.

ali - is low liquidity typically associated with premium pricing? I would think in a market where there are multiple alternatives (THs for sale in the area), the seller would need to discount the property to get a sale done. For instance, the house across the street is for sale for approximately the same price. However, that house has a salon paying rent vs. a now-defunct funeral home. I guess it could work the other way if there was a huge demand for funeral parlors...

mimi - That is a great point! They have an embalming room in the back - It's possible there are chemicals in the place. I didn't even think of that.

PH, low liquidity isn't typically associated with "premium" pricing, but the point that I'm trying to make is that in a market where you only need one buyer, a "flaw" in a property often doesn't generate the discount that consumers who wouldn't accept that flaw think it does.

One example is Midtown East -- there are co-ops there that demand 50% down and high-post-closing liquidity, and on these boards, there's a crowd of detractors who say that should drive that submarket to a deeper discount than is current. But in reality (or in the reality of the past couple of years, anyway) that isn't what has happened. Instead, the sellers have seemed fairly willing, in the aggregate, to wait a year to sell their properties (as opposed to the New York market's more typical four to six months).

So what might happen in your submarket -- I'm just guessing here, because I don't work it -- is that the house across the street, without the "flaw" of having hosted a business that uses chemicals -- will sell, and then the funeral home townhouse will be the "only game in town" so to speak.

Then the framing of the sale isn't "compare me to the house across the street" (which is a game that, in your mind at least, they're losing) it becomes "compare me to the cost of renting a townhouse" -- and then that new framing becomes where the market sets the price.

ali

^^ "these boards" meaning here on SE

On the midtown condos with high requirements, I always thought the smaller places (sub-1200 sq ft) on Park in the 60s and 70s were priced low relative to both the larger places in those buildings and comparable placed that had fewer requirements. Most people with millions of liquid capital, want something bigger, forcing sellers (i.e., the market overall) to induce buyers to purchase through lower relative prices. I looked a few years back and this was the case - maybe things have changed.

Time will tell on the value of the funeral parlor. My sense is the value is around 15-20% less than a house in similar condition without the funeral parlor taint and other funeral parlor issues (chemicals, design, removal of embalming stations, etc.).

Even if there was no implicit discount for this building, any buyer who is acquiring an asset that may be difficult to sell in the future should demand to be compensated for this risk.