If discussions of the tightening housing market seem too abstract — dips in activity expressed in quarterly percentages — consider the specific case of 3424-3426 Guider Avenue, a new brick condominium in Brighton Beach, Brooklyn.
Although contracts were recently signed on two of the six apartments, no units have closed since the building hit the market almost two years ago. And these snags have occurred despite three major price reductions and incentive offerings.
Now, saddled with shaky market conditions, burdensome carrying costs and anxiety to kick off another project, developer Robert Bucellatto said he has been forced into what he considers an option of last resort for his first Brooklyn project: an auction.
On Saturday and Sunday, would-be buyers will file through the three-story building’s two- and three-bedroom apartments, ranging from 840 to 1,100 square feet, and submit a sealed bid for one of them if they like what they see; winners will be contacted on Sunday night.
Under even the most favorable terms, the project is guaranteed to be a money-loser, Bucellatto said. The bids will start out under $300 a square foot, or $250,000 to $350,000 per apartment. That’s considerably lower than the $400 a square foot he was seeking before.
“It’s been a rollercoaster ride, and at this point, I just want to get out and move on,” said Bucellatto, whose past projects have been single-family homes in Staten Island, where his company is based.
Bucellatto’s lack of success has a lot to do with excess inventory, speculated Delton Cheng, a broker with Century 21 Homefront of Marine Park, Brooklyn.
There are currently 120 units listed in Brighton Beach and Sheepshead Bay on the Brooklyn New York Multiple Listings Service, he said, but if you factor in for-sale-by-developer properties, that figure could double.
Cheng, who has successfully auctioned two Brooklyn singly-family homes in the past, is not leaving much to chance with this one. He’s plastered ads on telephone poles around the neighborhood and taken out notices in local Russian- and Chinese-language newspapers to widen the market for possible buyers.
Bucellatto, meanwhile, is itching for the process to be over so he can break ground on an eight-story, 39,000-square-foot project next-door, though that one may be a rental building.