Tuesday, August 29, 2006

Realty roulette

For sale: quarter-acre of land near downtown Saratoga Springs with quaint, rustic fixer-upper home; a real diamond in the rough.

Perhaps that’s what some jack-ass real state mogul might say about the rotting flop house on badly blighted property near Van Dam, which just a month ago was being marketed for more than $161,000. There are no walls. There is no floor upstairs. There is no way to know what is presently living in the house because it’s been unlocked and open to the elements for the past six months. And that’s just the beginning.

Not long ago, a thick tree was splintered during a thunder storm, crashing through the home’s front porch and badly damaging the roof. Travel to the backyard and you’ll find a dwelling that would only be suitable for serial killers or heroine addicts. The home’s brick chimney is falling in on itself, much like the rest of the moss-covered roof. The list goes on.

About a mile a way on State Street, there’s a similar overpriced piece of property, albeit in better condition. While the brick ranch-style home appears livable, it’s pretty clear from a cursory look that it would take an investment of several grand from the get-go. Asking price: $325,000.

Here’s the sleazy realtor pitch: the brick home is located on just less than a third of an acre. That means it could be subdivided and developed –or sold –as two separate lots. Lo and behold, one lot has a home on it, so buy the home, subdivide with the city and sell the other lot for a cool $150,000. Or just level the property and build a McMansion, as so many with property near North Broadway are doing these days.

The point is the Spa City’s real estate is dramatically over-valued. There are examples of it on every street corner in every section of Saratoga. The gentrified west side that is broadly championed by many as an “art district” has seen the average home price soar from around $120,000 three years ago to nearly $250,000.

Last month, the Greater Capital Region Association of Realtors finally came out with the proclamation that everyone knew to be inevitable: the market is cooling. For Saratoga County –an area that many argue is the apex of its glory in July –did not appear to slow as pronounced as the 15 percent elsewhere. In fact, the realtors said the median price jumped by about $30,000.

Quite literally, there are signs of this market cooling in the city, although listed prices really haven’t reflected this very much. Almost every street has a realtor sign posted, many of which have remained in place for the entire year. These are signs often posted on properties listed at more than a half-million or more, which are the ones expected to take the biggest hit as interest rates increase and the market becomes more frigid.

One can only hope that some of the greediest of these realtors realizes the effect that they’ve had by this hyperinflation of the market and stops this game of realty roulette before one of these so-called down trends blasts back in their face. After all, if the bubble pops, Saratoga Springs will undoubtedly be one of the municipalities worse for the wear.

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