Tuesday, April 26, 2016

The madness of New York City housing prices

I found it hard to believe this report when I first read it - but it seems it's genuine.

The Brooklyn housing market is so hot, a slick realtor is asking half a million dollars for a glorified tool shed in Gravesend.

The faded yellow 1-bedroom “home” at 86 Bay 47th Street is a measly 12 by 26 feet and is built with aluminum siding, like some backyard sheds.

. . .

“It’s a legal, single-family home. It’s a teeny tiny house, the smallest one I’ve ever sold. There’s also partially finished basement, ” Mussolino of Ben Bay Realty told The Post.

He added, “It used to be a flop house for pets, mostly pit bulls. So it needs some work.”

The lot, which is 20 by 97 feet total, sits a couple blocks from Coney Island Creek, one of the Big Apple’s most polluted waterways.

There's more at the link, including a picture of the 'home' in question.

A 12'x26' house, on less than one-twentieth of an acre of land, for half a million dollars???  With a floor area of about 300 square feet, that's smaller than quite a few travel trailers I've seen on the roads!



Jim said...

I found the place on street view on Google Maps and I'm astounded that someone would have the nerve to ask that much for a shed in that setting. It's tucked into what looks like a narrow alley between two other buildings so you don't even get a view for your $499K.

Jonathan H said...

Is there something special about the location, or is this pretty much a stunt by the owner or listing agent to see if they can get it?
While I know that prices ARE ridiculous in NYC and other big American cities, this is overkill! No wonder jobs are leaving NYC for elsewhere!

Guffaw in AZ said...

Why would anyone want to live in the People's Democratic Republic of NYC?
I live near Phoenix, and pay under $700 to rent an 11 x 17 room from a friend!
Community pool privileges included, and covered parking (important in the 100+ degree Summers.)
And it's ARIZONA!


raven said...

Be careful. Half million dollar shacks, 50 million dollar collector cars, new homes popping up on every vacant lot, are not in sync with underlying economic conditions. This has all the warning signs of a huge bubble- exactly as we saw in 1999 and 2006.

Except this time we are, as the aviation folks like to say, "out of altitude, out of airspeed, and out of ideas". The "soft field landing" is going to be into a brick hanger wall. Peter has been trying to warn us....

Tal Hartsfeld said...

Capitalism is so subjective.
Tell me if anyone actually purchases that house at that price.

Old NFO said...

Nope, nope... No way in hell! That is just beyond stupid!

kamas716 said...

I don't really understand the allure of the 'tiny house' trend. I mean, it's a good idea if you have _nothing_ but not exactly appealing if you want to be able to stand up and stretch in the winter.

I love camping. As a child my parents took me lots of places with them in a camper, started in small ones and worked up to a very large one. My aunt married a guy who built and maintained power plant stacks and they lived in a trailer for years touring the country. These tiny houses are smaller than our campers were back in the 70's & 80's.

Erik said...

Stockholm in Sweden has a similar situation, but not quite those prices (yet anyway). The problem in Stockholm is that there are not enough places to live for all the people that have to live there to work, even if they're willing to commute for hours every day.
And for a lot of those people there are no jobs anywhere else, so they have to pay whatever is asked to live there, to be able to work.
But yeah, it's a bubble. When the economy goes down and the jobs start to disappear, people wont afford to live there and will leave, and the bubble will burst.

In this case it seems to me that the realtor really aim to sell it with the house next door, but put it on the market as a solo object to use as leverage and get a better price for the whole deal.

Anonymous said...

Hmm, the combined mortgage payments on TWO houses I own in Houston total $1300/month.

I left California, thinking I'd never own a house like the one I grew up in, and now I own two.

Choose wisely...


Javahead said...

Lots of variables here.

I just checked my grandparents' old neighborhood in small (rural California) city. They owned a small (~1300 square feet) ranch house on a 1/4 acre lot. Under 200K.

My dad lives in San Jose. His place is about the same size as theirs, similar sized lot. His house would sell for ~700K.

My place is similar to his or my grandparent's but a bit bigger. It would sell for ~250K at most in my grandparents' area, probably less. Here, it's inflated as much as my dad's house. We couldn't afford to buy it today. Not a mansion, just a 50 year old 4 bedroom ranch house in an OK neighborhood.

I'm not sure we have a problem with an overall housing bubble as much as a bubble in a few *horribly* inflated areas (SF Bay area, NYC, some parts of southern California).

Remember the old stock bit from Warner Bros. cartoons - "I am Elmer J. Fudd, millionaire. I own a mansion and a yacht."?

"Millionaire" is not really all that impressive a claim today: in the bubbliest areas, "millionaire" could describe anyone who owns a modest home and a rubber ducky. Measured by standard of living they fall far behind someone with half their theoretical net worth but living in a more reasonable part of the country. Like my brother, or quite a few of my cousins who live in small towns or less-trendy cities - they own nice places that would (still) sell for non-insane prices.