Flipping – a concept gone by

18 Watchtower

18 Watchtower

Not long ago you could buy a tired old house, do a quick update and flip it for a tidy profit. Not now. This ranch was purchased for $1.2 million in October ’07, just as the air was leaking out of our market. The new owners added central a/c, a new kitchen, redid the baths and refinished the floors and perhaps added on 800 feet (can’t be positive from the listing). They put it back up for sale in April ’08 at $1.795 an aggressively high price, in my opinion, for the market that then existed, and couldn’t sell it. Today it’s come down to $1.395. If it keeps dropping, all of that work will have been for naught. Of course, that original $1.2 million purchase is probably worth something like $750,000 now so a loss was coming one way or the other, but the owners put in a lot of time and expense redoing this house without, it seems, getting much back for their effort.

3 Comments

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3 responses to “Flipping – a concept gone by

  1. Stanwich

    You really think they overpaid by 40% (or said differently, the market has fallen 40% since their purchase)?

    The house itself is not a good flip. It doesn’t have much curb appeal with all the different types of siding in the front with stone and clapboard going in multiple directions. As far as I am concerned, Havemeyer Park is a cute, family-friendly area but the housing stock in general is basic GI stuff they put up after WWII. Most homes in the area are only modifications of those basic structures with a small proportion being over-built stuff from this last cycle.

    I feel bad for the owners because they are in for a world of hurt unless they can rent it (which is coming under increasing price pressure).

    • christopherfountain

      I think it’s a combination, Stan, of overpaying in a falling market (maybe $950 might have been a better price) and watching the market tank since then. But yeah, my opinion of Havemeyer is that it’s always been a great family neighborhood for normal people (well, I lived there once, but you get the picture) of moderate means and starter homes. I think it will remain that for the forseeable future in which case we’re going to see houses there range from $650 -$950 and not much more.
      But what do I know? There’s a bunch of new construction over there priced from $1.495 -$2 million, and they can’t all be wrong, can they?

  2. Stanwich

    I have seen some of it and yes, they are wrong. For the price, there are better locations in town to live in similar sized homes. This is not the time to be pushing the envelope with high-end homes in pioneering locations.