Bigger Manhattan price chops

We just received a change of address notification. New address is 837 Park, and, being the snoop I am, I had to look up the purchase. No appreciation in the unit at issue in the 10 years since it last traded. High end unit (upwards of $10M).

Moved to 837 Park? They've taken a suite at Lenox Hill? (shades of Huguette Clark!)

3/4A across the street is pretty swell though.

837 Park was hard to find on Streeteasy; not sure why. It is a pre-war condo.

Link please! I’m very confused…

I believe that the address is 737 Park ave. The building was completely redone from a rental to a condo ten years ago. The prices paid by the initial buyers reflected the premium for new condo construction high end interiors in a prewar building. It is typical for new construction to loose its price premium when it is ten years old.

Hard to find because it was a typo - oops: https://streeteasy.com/building/737-park-avenue-new_york

Yes, @value is correct; we must have been typing at the same time. You can figure out the unit I am talking about from recent sales. I don't get this purchase; I usually love the real estate these folks buy, but this one does nothing for me.

Thanks for the clarification. Not quite my taste, and the biggest drawback is that there are 5 bedrooms and only 1 'public' area (that hallway posing as a 'media room' doesn't count) -- Maybe the family that plays together stays together, but a variety of public spaces serving different purposes would be better (BR4 can pretend to be a library as it's off the LR, but it's really designed as a BR: little hallway, own bath). Nice to see rooms staged without TVs in them though.

where was 2014 when that unit traded relative to the market cycle?

@Rinette - no idea. That is more of an @inonada question.

@Aaron2 - These were (past tense for me because they were casualties of value differences that came to light in 2016) among both my and Mr. MCR's favorite people because they are at the intersection of both of our oldest friends (his from college and mine from other circles).

From my experience with them, the unit is not at all to their taste; if I could use one word to describe them, it would be "elegant," and this unit is not that.

Given the amount they spent and their resources, I would have put them as townhouse buyers on the UES way ahead of this unit.

With the above said, however, given their other cities (SF and London), and given the ages of their progeny (yuppie), I am speculating that they went condo in this location so they and their adult children can use the apartment as needed when needed for whomever needed without having to spend the time or money they would for the same purpose in a townhouse purchase. The multiple bedrooms with ensuite baths and no communal space that I had not noticed until you highlighted it for me is what leads me to that conclusion. Prior to your comment regarding the lack of any formal dining room or entertaining space, my only reaction was "Huh?"

So, while it is only speculation, I thank you for the clarification of what this unit is and how it might mesh with some people I used to know. I was happy to receive the change of address card because I do miss them. I hang on to the delusion that they sent it because one day they will say they regret the choices they continue to make.

>> That is more of an @inonada question.

SE index has current prices flat relative to mid-2014. They had already recovered their GFC losses by 2014 and went a tad higher in the subsequent couple of years before wobbling back down. So the flat outcome on this unit is typical of the market, based on the data, rather than representing any sort of “new condo premium degradation”.

The buyer/investor didn’t make out very well here. Basically put it on the market for rent soon after purchase. Based on listing history, it seemed occupied 65% of the time (presumably related to the premium rent they were trying to attain). On their cash purchase, I estimate a total return of ~5% after 11 years when all is said and done. So while not a nominal loss, pretty bad in real terms on a “safe” investment considering inflation has been 35%. SP did +290% over the same period, cash did +20%, so take your preferred mix from that range as the opportunity cost of what else the investor could have been been doing with the money with vanilla investment strategies.

As someone who has owned investment properties in several cities across the US, both coasts, by far I made the “least” money in NYC. Most profitable was Oakland by far. Don’t think this is too surprising.

Oakland is baffling to me given the prevalence of sketchy neighborhoods but I guess if you can afford the house you can afford private schools for the kiddos.

https://www.zillow.com/home-values/13072/oakland-ca/
If you were to believe this metric, flattish pre-covid despite huge boom in Silicon valley including prices.

Just south of Oakland.
https://www.zillow.com/home-values/18518/hayward-ca/

I remember being lost in Oakland in the early '90s, we were trying to find a venue. Stopped and asked a cop, and without missing a beat he said get on that road, make a right and just keep driving and get out of here : )

I bought and sold most of my Oakland investment properties prior to Covid and I was investing in those “sketchy” neighborhoods that are slowly gentrifying, in particular West and North Oakland. Their big advantage is you can get to downtown San Francisco very quickly via Bart. Last time I visited West Oakland, I saw a number of farmers markets that had started up and now a minor league baseball team plays in West Oakland so it’s continuing to improve. I think the public schools are not great, most of the buyers/sellers i interacted with were young couples and if they had children, they were very young and a couple years away from public school. There are very nice neighborhoods in Oakland. It has a historically bad reputation as the Marder capital of the US but it’s really changed if you have an open mind, and of course know what neighborhoods to avoid since there are still some really bad parts. I would argue Hayward is a completely different market.

Turbo,

I provided Hayward price comp as one would think economic forces driving the housing prices are somewhat similar in two areas. It shows the Oakland lagging in the last 5 years.

Clearly choice of area within a city matters a lot. For example, Brooklyn Prime and near Prime, have significantly outperformed Manhattan.

Median sale prices doubled or more in these 24 NYC neighborhoods: report https://share.google/0oRJFFXfbQffwJ9bL

What's also interesting, are the Manhattan neighborhoods that have been flat to negative over the last 10 years. I've had a handful of conversations this year with people that were just absolutely shocked that a home they bought 10 years ago was worth less than they paid for it in Manhattan today.

I never intended to make money on the apartment I chose in Manhattan, but I also did not expect to lose as much as we are likely to. I am dreading inonada's autopsy of our ownership if I able to even euthanize it.

You win some. You lose some...

@keith - My philosophy exactly. What has fascinated me about Mr. MCR is that he does not keep score and never has. My (very mean) elder sister dubbed me his "house cat" some 25 years ago. It is funny because it is disturbingly true. We lowered the price earlier this week and had zero showings at yesterday's OH; we are going to be perpetual owners of our cabin on The Titanic, and he could not care less. Not a choice I could
ever sustain on my own; hence, not a choice I can comprehend.

Win some, lose some is right. But when after 11 years:

- the income stream of an asset goes in an entirely predictable way (inflationary increases in this case)
- financing does the same (matching the forward rate curve at the time of purchase)
- demand for your product remains as strong as ever, if not strengthens (see NYC vacancy rate)

And you materially *underperform* inflation on an investment, my guess is that you will be more in the “lose some” bucket across life than you need be as an investor.

MCR, performing an autopsy on your apt’s corpse is weird. You entered this with the viewpoint of it being the equivalent of a shoe. “I won’t use it most of the time. Maybe I’ve got too many shoes in my closet, but whatever, I just like it to be there when I want it. And if anybody were to buy the shoe from me when it falls out of my taste, that’s found money!” By those standards, it’s going to be an absolute win!

Do I think your consumption habits are wasteful? Yes by my ethos, which is “wear your shoe every day down to the soles and then buy your next pair”. But I’m sure many people could look at me and consider my apt as wasteful, given its size for just 2 people, even though I consider it fine given that I use 90% of it on a regular basis (save the guest quarters).

It’s all different than a clear investor (who rents it out from day 1) or the buyer who is absolutely shocked that they “lost” money, whatever that means to them, on an entirely predictable outcome.

If Mamdani really is able to double down on LL 97, I suspect a lot of owners will find themselves even deeper underwater. This is the cost of so much unscientific climate porn published all over the place these days. (I know, I know: grampa!)

@mcr The current market in Manhattan has been absolutely abysmal for the last 2-3 months. I can't remember the last time I've seen the market come to such a severe slowdown during the summer. We even had a recent listing in Brooklyn, and it's decent enough location, and we had the same results at an open house, blanked! The buyer pool is very specific right now. We have another listing in Williamsburg that just came to market and we had an exceptionally crowded open house, fully booked for the first two! Still no takers, however, the activity has been very promising and to some degree it is a unique little triplex home. At least here we feel confident we are barking up the right tree with pricing, etc. And we'll be patient. If anyone is looking for a little Jewel box in Brooklyn, have a look, exceptionally low monthlies!

I'll just say it was an ideal time to spend a month in Europe! We are currently hunkering down and just riding this summer out, trying not to be stressed out about what would have simply been considered normal in July and August, 10+years ago.

We just put a two bedroom two bathroom into contract in Greenwich village. These were long-term renters, I had originally spoken with one of the buyers about 8 years ago. He has a very similar take on buying to inonada. However, with a couple of kids in the mix and the right deal came up, they pulled the trigger.

We have a couple of rental listings, 500 4th avenue in Brooklyn and 3 Sheridan square in Manhattan. With Sheridan, we now have a couple of applications that the owner is reviewing, and overall, we've been pretty swamped with requests to show. It's interesting though, renters move very quickly. Very quick to say send me an application and very quick to then tell you they've moved on to something else! That said, we had a couple of sales listings that wouldn't move, that we wound up renting and they were above 10K a month. All in all, the entire process at that price point is much smoother.

I just had a look at a one bedroom we had on the upper west side, and unfortunately had a board turn down. It was a cash deal with a younger, buyer moving back to New York from Europe. Her very successful father was providing the cash. Through the grapevine we heard that the board basically wants a shareholder that can stand on their own, very disappointing. Anyway, the seller who we remained friendly with as we've helped them with a few other purchases decided to list with another broker at a big firm. And I see that that listing is still available, 5 months later! It's a nice little one bedroom and a great Upper West side building for under 700k... Tis the market.

Keith
The Burkhardt Group

@keith - Thank you for the perspective.

@nada - All good points. While the apartment is consumption for both Mr. MCR and me, our consumption preference structures are very different (undoubtedly linked to our different earning potential).

I am the type of person who does not blink at the price of a pair of shoes that I love and know I will wear all the time, but I am not one to splurge on a pair of shoes that I will only wear once a year. Left to my own devices, I would have only one residence and would not think twice about anything I spent on it. I would also have one second home that I would view the same way. Anything beyond that is waste to me, though I fully concur that what is waste to me might be money well spent to another.

So, given that I am now firmly ensconced in a small condo in Nowhere, with a small second home in close proximity (located in Truly Nowhere - where I am delighted to be at this very moment, listening to the birds and watching the lake), I find the NY apartment truly wasteful consumption.

However, as noted, Mr. MCR is totally happy with it, as he also is with some other properties I would prefer to shed.

Mr. MCR's company is worth the tuml that is inherent in being his life partner, but I am now actively exploring new coping mechanisms. :)

I'm hoping this does not involve pharmaceuticals.

If the name isn't too triggering, I recommend Manhattans. On the other hand, maybe stick to drum circles.

Ha!

Re pharmaceuticals, I was back in DC a few weeks ago, and I was shocked that my wine circle there has moved on from wine and Xanax to psilocybin therapy (because the Parker Posey character in the most recent season of White Lotus hit too close to home) . I have never gone the Xanax route and don't intend to, but I was intrigued by the psilocybin discussion.

With respect to Manhattans, I have always been more of a wine drinker than a cocktail drinker, and while wine has historically been my coping mechanism of choice, I am looking for something healthier, so Manhattans are probably not the best choice.

So, with that background, the specific new coping mechanisms I was referring to above were/are different meditation techniques and yoga, but again, I am not ruling out the psilocybin. The friend who was touting it is not at all someone who I would have expected to be open to it, but the part that caught my attention is that she said it helped her dial down her need to be in control. Given that I will never be in control of Mr. MCR (though I do have fantasies of being Kathy Bates to his Richard Dreyfus in Misery), anything that could help me just make peace with that lack of control could only be a good thing.

Maybe read Autobiography of a yogi? George Harrison used to give these books out to friends that said they needed a reset. And each guest at Steve Jobs funeral received a new copy neatly packaged in a white box....

Certainly plenty of research on the mushroom compounds!

Cyclic sighing can bring down stress and you don't have to deal with substances.

>> though I do have fantasies of being Kathy Bates to his Richard Dreyfus in Misery

James Caan

>> I was shocked that my wine circle there has moved on from wine and Xanax to psilocybin therapy (because the Parker Posey character in the most recent season of White Lotus hit too close to home)

Instead of joining the Parker Posey crowd, I recommend you strike your own path by setting aside the therapy pretense and simply going full tilt on a proper hallucinogen like LSD. Or for the more sensible non-pharmaceutical route, I recommend you shovel shit daily like Arnold:

https://www.tiktok.com/@arnoldschnitzel/video/7242735388119502126

So, @MTH, I think the cyclical sighing falls into one of the meditation techniques I have been reading about;

@Keith - That rec sounds like a winner; it is now on my kindle app.

@nada - I am in Arnold's camp here. I spent some time at an Amish farm this afternoon (I was looking for furniture but got sidetracked by the animals), where all hands were called on deck because the goats had maneuvered their freedom. Between the dogs and the goats, I really did not want to leave, and I think that is where my zen energy is most likely to be found.

P.S. to nada - thank you for the actor correction. I haven't seen it in years, but if I recall, it has an unhappy ending with James Caan escaping.

People speak well of microdosing.

The crypto crew that I've referenced here before. They also all all microdose.... Fwiw

This apartment was a topic on the 1 Wall Street thread:
https://streeteasy.com/building/176-broadway-new_york/3c
closed in May 2023 for $1.1M and now delisted just less than 2 weeks ago last at $895K.

Ouch - short hold; significant loss. Looks like it is only temporarily off market?