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Buyer Beware: The Pitfalls of Buying Castles

1894-armory-amsterdam-ny-ext

We’ve written about this property several times, each time wondering about the backstory. What’s a renovated, 36,000 square foot armory like you doing on the market for so long? In fact, it was first listed at $2 mill, went down to $1.5 million, and then to one mill when we last wrote it up in January, and is now on sale for $895,000.

The NY Times recently wrote about the family that bought it. They expected that they’d be able to unload it, post-renovation, and make a profit, living every New Yorker’s dream.

“…they moved back to New York, bought a three-bedroom place in Park Slope, Brooklyn, for $565,000 and four years later, in 2005, sold it for $1 million.

“That’s when the Phemisters decided the time was right to buy a castle — a 36,000-square-footer in classic red brick, complete with 2 turrets and 134 windows — for sale at what appeared to be the low-low price of $800,000. They spent $400,000 on renovations, which won them a preservation award, and in 2007 put it back on the market at a price fit for a king, $2 million.”

And then…the crash. “Unfortunately, as is now widely known, that was when the American economy took a downward turn, and, as Ms. Phemister said, ‘The market for castles in upstate New York dried up completely.’

“In the five years since, the castle has been taken off the market and put back on several times — for $1.95 million, $1.25 million fully furnished (including a mounted bison head and 20 stuffed pheasants), $1 million and now, for $895,000.”

ThePhemisters still live there, hoping that soon someone else is ready to live like royalty in Amsterdam, NY.

“We love living here,” Ms. Phemister told the Times. “It’s just that it’s someone else’s turn to live in a castle.”

Category: Accommodations, Real Estate Market

By: lisa | 24 April 2013 02:00 PM | 2 Comments

2 Responses

  1. bryanx says:

    It would cost a King’s ransom to heat that place.

    But its beautiful.

  2. JerseyGuy says:

    This article could apply to any home you’re looking at to buy – especially upstate. When looking to buy a house, one of the things to consider is how it will appeal to the person who you will sell it to when the times comes. I’ve seen many homes upstate where people have remodeled $100,000 farmhouses into $400,000 properties. Or, people who build a $1M dollar house in a neighborhood of low-priced properties. The problem? If people really want to live in that neighborhood, they’ll buy the cheaper property. And, nobody wants to buy the million dollar house in the $100,000 neighborhood. These people should have said, “who will buy this when we want to sell?” How many other houses (or commercial properties being converted to residential homes) are in this neighborhood? You see it time and again – even in suburban neighborhoods in populated areas with employment. You live in a 3 bedroom rancher in a neighborhood of 3 bedroom ranchers. Your neighbor remodels his home into a 6 bedroom 2 story. He might sell eventually, but usually not at the same price appreciation as you will sell since most people moving into that neighborhood are looking for the 3 bedroom ranch. If they want the 6 bedroom house, they’ll go to those neighborhoods. Nobody wants to spend $2,000,000 on a large home in a lower priced neighborhood. They want their $2M home in the $2M neighborhood.

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