Over at the recently launched nrv lowdown blog they have a short article on the Sunset Park real estate market. And while the article takes note of the dismal situation in Mortgages as it notes; The neighborhood is also being hit hard by the sub-prime mortgage crisis, so real estate values there are changing quickly with the economy.
While it makes passing note of the Gentrification that is encroaching the neighborhood from both sides, North and South it paints a rather flowery picture that I think at this point in time is too optimistic. While no doubt there are investment opportunities to be had. The adds it links to on the bottom show a number of properties that by any standard are clearly over priced.The first offering is the 3 family brownstone on the right at 56th street. 2700 square feet on a 2000 square foot lot. It gives scant information or other details. The asking price? $990,000 . Now you might have gotten away with that a year ago. In today's market I don't think so. I suspect that house will be on the market for a long time until and if the owner takes a more realistic stock and lowers the price by about 200k.
Another offering by the same real estate agent is the modest townhouse below a wood frame house on 49th street for which they are asking $715,000. I think the people selling these properties are overly optimistic. While I agree that Sunset Park is improving I do not see it as being immune to the economic downturn in the real estate industry and until that is resolved at these prices investment opportunities they are not.
Why buy something at a high price when you know that prices are falling? Most homes are not investment opportunities. Usually the home you live in is a non-performing asset. Especially one family homes. When you take into account inflation and amortization costs most people just about break even.
So, do you think the city will lower our real estate taxes when it does the next round of appraisals? No, I don't think so.