Sale at 427 East 85th Street

Probably the same reason than 1 BR's in this building are selling for 1/2 million instead of close to double that:
http://streeteasy.com/building/415-east-85-street-new_york

I like the mural wallpaper at 427, but I'd nervous about that elevator that moves at 100 fps. (not seeing the reason for things on 85th languishing though - I don't know that neighborhood).

TeamM, How many sq ft do you get? I see 8000 sq ft at most including exterior walls. Reno is not very current taste. Most people will redo significantly besides the structural elements.

Also, for some locations people just would not pay 10mm. I do not know whether this is that location.

300 - I agree that the SQ FT looks aggressive, but I see some very nice features:
1) 25 FT wide is pretty rare in Manhattan. That offers a lot of options. I would have thought that alone would make this desirable.
2) I strongly suspect that the bones of this house have been made rock solid during the previous renovation given the size and gym on the top, so even if you are going to upgrade it is probably largely cosmetic/finishes.
3) The style may not be current, but it looks to be a nicely done house with some really neat features - how many houses in Manhattan allow you to shoot hoops inside?

For a lot of the townhouses languishing on the market, I think the sellers are out of touch with the market, but for this one I would have thought that some buyer would be enticed by now.

If I were to be buying in that range, it would cost me $1mm to change the finishes/bathrooms/kitchen cabinets and trouble - and I would not feel good destroying perfectly nice finishes. I would rather get a townhouse with 5000-6000k sq ft of space (ex basement; this is 8k sq ft ex basement) and pay $2k per sq ft fully finished closer to the park on a nicer block. And the taxes are not in the listing as they at 80k per year which is on the high side for this location (much better location may be $40-80k range). This is likely due to the fact that this townhouse was converted from 5 units to 1. If the location works for someone, the price is very good at $1250 per sq ft. When you go from Prada to J Crew, the price falls dramatically. The same is true location wise.

Can not believe the broker is touting 2nd avenue subway for a $10mm property. Subway is unlikely to matter to a $10mm+ buyer.

300 - interesting perspective. My gut is that someone will buy this up near their new current price, but I could be wrong. What's your guess on where it lands?

If the location is really the hold-up that has causes this property to languish, then I would think that this is a tough dose of reality for other folks trying to sell other townhouses in that neighborhood because on a relative basis it says a lot about their prospects.

It could clear at 12mm which is 1500 per sq ft for 8k sq ft. It is hard to say as the market at this price level is way oversupplied. My guess is a little lower but more than 10mm as the buyer would want further discount.

Btw, a 4000 sq ft townhouse in the same location will clear at higher price per sq ft as total price point is more within reach.

I think 30 nailed it.

I agree with your sentiment that part of the issue may be that there are simply too many options in this price range. I think that a lot of townhouses are suffering from this issue, and I think this issue will grow for townhouses that are in need of meaningful work unless someone drops the price way down to entice the buyer to do a gut renovation and customization, or the house is in a really prime location (such as the houses that have sold right off Fifth Ave). Why pay a high price for a property with all of those headaches when there are so many nice and new alternatives?

I view this house a bit differently than many of them on the market because it is so large (and wide), it may be far east but it isn't in a fringe neighborhood by my standards and if you have a family then it offers a very livable experience to my eyes. I'm obviously wrong thus far. We will have to wait and see.

There's an old Real Estate saying that you don't want to buy either the worst or the best house on the block.

30 - that makes a lot of sense, and perhaps that's part of the dynamics on this one too. The price has been massively cut as compared to their original ask. Will be interested in seeing the landing spot. The townhouse market seems to be overflowing with houses that are lingering.

Cleared at $8.7mm vs what I thought could be $10mm. Original price $20mm. Perfect example of how initial over-pricing can seriously hurt the property sale.

location, location, location

What's interesting about this property is that I think it would sell for even less today. Owner was smart to cut bait.

I think there are several townhouses on the market in a similar situation right now. They're just going to linger until they cut the price by several million.

In a declining market the "winners" are those that get out in front of the situation and drop their price to "below market" to steal the wind from other's sails. Especially in the corners of the market where the buyer pool is thinnest.

How many townhouses have we seen recently which have sold after huge price cuts, and how many more have we seen which still have not sold after huge price cuts? That's why I was surprised that East 7th St house sold for $15 million - if they put it back on the market today I wonder what would happen? But also whoever would have guessed East Village houses would be trading for almost double Upper East Side houses?

The UES townhouse market has been beaten up pretty badly, and I think it's going to get worse. There are a bunch that are just lingering on the market at several million above where I think they will sell and I don't see a strategy for them to actually move. I wonder whether the brokers are educating the owners about the market dynamics or if the brokers even know the market dynamics, particularly on the UES. Some of them sit for years, occasionally cutting their prices by modest amounts, when they really need to cut in 20% increments (or more).

There has been a group of houses on 95th between 2nd and Park that various people have tried to sell in the past year, and I think that only two have because they priced realistically and this is before the further tax penalty. Several others have been pulled from the market or continue to linger. There are two on 95th right now between Lex and Park that are priced for millions above where they would reasonably sell, presumably because the owners or brokers are overvaluing renovations and not realizing the competition through other townhouses + large apartments. There's been a similarly wacky dynamic on 61st/62nd between 2nd and 3rd in which is seems that dozens of houses have been on the market and they are selling after either massive price cuts or they are lingering.

TeamM, Appreciate a couple of examples and roughly where do you think it could reasonably sell today.

Do you mean a couple of examples on 95 or 61/62 that are current listed and where I think they would sell today? Or do you mean previous sales on UES and where I think they might sell today?

Former please.

Some examples - I am just going off the listing - haven't seen these in person. I don't know where the floor is on these.

95th (several have been pulled off market):

https://streeteasy.com/sale/1406805: Clean renovation but a thin house and a block where I don't think houses will sell that high. Poor elevator placement. Seems to have the plus of having dug out the basement. Too many alternatives nearby on Park Avenue for large apartments that offer better living. Tough to price, but I would be shocked to see this sell in the 7s or even the high 6s.

https://streeteasy.com/sale/1400619: Similar to the one above but wider and better elevator placement, but without a proper basement (it appears). Looks like they cut the rooms on the top few levels a bit too small in order to try to have the rooms in the middle of the house and the kitchen looks poorly done. Will also suffer from this block. Similar to the above, there are too many alternatives on Park. I am guessing this lands in the low to mid 7s but I could see it going lower as time goes on.

61/62: There are so many that it is really tough to figure out how low they go. They've been on and off the market for years and those that are selling are generally doing so after very large discounts. For example:

https://streeteasy.com/sale/1400619: I think this goes for low 7s or high 6s.

Thanks for the insight though I think your last link example of a discount at 61/62 was a mistake.

I used to live in one of the townhouses on 61. That area is a tough sell in my opinion as it's not a nice quiet neighborhood block. Lots of car/truck/bus traffic off the Queensboro bridge and 2nd Ave. Super convenient transportation options though.

Thank you. While I like the second one, the location on 95th is tricky. So something in the sevens is possible and seems fair.

I probably should have put this in another thread because others might have interesting input. Maybe I will do that later.

300 - with the necessary caveats of "it only takes one" I think that's probably right. I could imagine it being a bit lower too. It seems that the owner/broker really likes their own house and is trying to sell the renovation, but I think there are just too many alternatives in better locations nearby (such as large family apartments on Park Ave) to warrant anything even close to the current asking price. Given how far above reality that one is listed, I could see it sitting for a very long time unless the owner gets good advice from someone.

Rock28 - you are correct - I meant to link this one: https://streeteasy.com/building/234-east-61-street-new_york/house

It seems like tons of people are trying to sell townhouses on 61. Lots of nice houses, but I suspect that they share your view on the area and that it drives them away after experiencing the reality of it.

It's not just bridge traffic, lots coming off/towards FDR as well.