NYC Parking Spot Pricier Than Median Home
A: I couldn't resist. For anyone that wonders how the hell Manhattan real estate continues to just churn out dollar signs, just take a look at the latest market price for 1 parking spot; yes, just one! Nothing surprises me anymore in this incredible city.
Out of 5 parking spots that are being put up for sale in the basement of 246 West 17th street, a new condo development set to be completed next January, would be buyers are jumping onto waiting lists in the HOPES of paying only $225,000 to secure a spot!
Gotta love it. Or hate it. To put that into perspective, the NAR's latest data report puts the median price of a home in the US at $223,700! So, a Manhattan parking spot is now more expensive than half of the homes sold in the US last month!
According to CNN Money's article this morning:
Manhattan real estate agent Tom Postilio said there is a waiting list of seven or eight people hoping to pay $225,000 for one of five private parking spaces that has been approved in the basement of 246 West 17th Street...The trend of buying parking spots for individual investments and renting them out seems a bit far off to me given the numbers, but then again, in this city real estate is the key to building wealth. To me, here is how the numbers break down if one would put down 20% to finance a parking spot investment:
...The developer of that building is seeking permission to add another four spots, and Postilio said the addition spots are likely to cost even more than the current price, although he could not give an exact price.
"Supply and demand being what it is, there's probably going to be an increase," he told CNNMoney.com.
The paper says that property appraiser Miller Samuel estimates that the average parking space in the expensive neighborhoods of Manhattan now costs $165,019, or $1,100 per square foot. That compares to an average apartment price of $1,107 per square foot
PARKING SPOT PRICE ---> $225,000
DOWN PAYMENT ---> $45,000
LOAN AMOUNT ---> $180,000
INTEREST RATE --> 6.65% (non-jumbo loan gets slightly better rate)
Monthly Payment ---> 1,155.54 ($450 in interest is T/D)**
Going Rate For Spot Rental ---> $450 (or so)
**Update at 3:44PM - For investment interest, only the interest against the income produced is deductible. So, if you get $450/mth rental income, only that amount of interest is tax deductible for investment income producing property.
At this stage of the game, the investment side of buying a parking spot doesn't quite add up to me. However, if the price of a spot increases to say $300,000 in 5 years time, then of course the investor will make out pretty well, even with the negative cash flow. To be honest, I am not that educated on the state of the Manhattan parking spot market, nor am I in a position to forecast any future trends in this market. However, I will certainly buy into the argument that parking spaces for sale are very hard to come by and demand for parking is very high! Not a bad fundamental start to possibly a new trend.
Quick Tip - By the way, a GREAT site to search for local garages for buyers who need a space is NYCGarages.com. Type in neighborhood, narrow it down, and all the local garages and their #'s pop up on the map so you can sit at home and do your pricing and availability check!
Your thoughts? Is a NYC garage spot worth $225,000?