Kalahari

OMG there are fifteen threads on this already - try the "search discussions" funtion. Look to your right. RIGHT HERE>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

jason, relax. there are a gazillion threads on rent/buy. be kind to the newcomers. just post the link to the thread, and if they want to start a new one, what does it truly matter? are you the continuity police? sometimes having new discussion can generate new ideas, when not constrained by the prior thoughts of others. either way, it's just a blog with thoughts, but to be helpful you might want to point those who do not know in the right direction without derision.

Agreed Aboutready.

I would vote for Rhapsody on Fifth. The street is nicer and the units feel more intimate. Plus, the sponsor will pay for the first six months of maintenance! (I live near that building and pass it every day on the way to work.)

marvyboy, i disagree. you'll be stuck with those high maintenance charges forever, and they'll likely only go up. too small a building for me to be comfortable in this market in this neighborhood. good for them, though, closing on more than 50%. i thought this one was doomed. amazing what conforming loan availability can do for a development. do you know how long the tax abatement runs? i looked at this development, but a couple of years ago.

i agree on the location and feel. although i think the kalahari has a vibrancy of its own.

sarah, the asking prices on the remaining kalahari units, particularly the larger ones, are likely very negotiable. they've covered their costs and now just want to get rid of the remaining units.

I like the Kalahari's location better. Yes the street is nicer for Rhapsody, but it's not as convenient to transportation or supermarkets.

here's a recent closing in Rhapsody.

http://www.streeteasy.com/nyc/sale/166898-condo-2056-fifth-avenue-central-harlem-new-york

11/19/2007 Previously Listed in StreetEasy by Rhapsody on Fifth at $945,000.
01/02/2008 Rhapsody on Fifth Listing is no longer available.
01/16/2008 Listed in StreetEasy by Corcoran at $945,000.
03/15/2008 Price decreased by 6% to $890,000.
04/12/2008 Price decreased by 3% to $865,000.
07/16/2008 Price decreased by 8% to $799,000.
08/15/2008 Price decreased by 6% to $750,000.
01/14/2009 Price decreased by 7% to $699,000.
02/08/2009 Price decreased by 7% to $649,000.
05/23/2009 Listing entered contract.
06/12/2009 Listing sold.
06/12/2009 Sale recorded for $550,000.

This is why I dont get why anyone would want to buy "affordable" housing in Harlem, when you can get nicer market rate stuff for tthe same price now.

That place is really nice, I'll give you that. But do they even sell affordable apartments for $550K? We're looking at an affordable unit which is smaller (about 900ft2) that is 2bed/2bath , is priced significantly less and it has a private terrace.

I saw an affordable one on 116th/lennox a 3/2 for $650k a year ago.

that's a ridiculous price, there's nothing affordable about that.

Jason, would this be the building, perhaps? in contract, 3/2 for $375k.

http://www.streeteasy.com/nyc/building/130-lenox-avenue-manhattan

Active Listings (4)
$458,000 130 Lenox Avenue #628 3 beds 1,200 ft²

$379,000 130 Lenox Avenue #229 2 beds

↓ $339,000 130 Lenox Avenue #318 2 beds 850 ft²

↑ $300,000 130 Lenox Avenue #225 2 beds 850 ft²

SAVE Listings in Contract (3)
↓ $375,000 130 Lenox Avenue #415 3 beds 1,225 ft²

$349,999 130 Lenox Avenue #712 2 beds 860 ft²

↓ $315,000 130 Lenox Avenue #611 2 beds

yes that very one. It was for $650k and your houshold income had to be 75k to 175k in 2007, which I thought all sounded insane (plus 20% down and its a coop.) Those seem like more reasonable prices now.

I wonder if an insider can shed light. But anyway I make slightly too much but I never understood how someone who made 75k could afford that.

Even during the boom years they only sold one apartment for more than $325k in that building. Someone making $125k (about the limit for a couple, maybe, haven't looked it up) would have to have had a big piggy bank and have used it for years to have been able to afford the recent listing prices.

Thank you, everyone for your comments and guidance. I can tell you the developer at the Rhapsody is quite comfortable and not willing to make any deals. Oh well, good for them…it must be wonderful to be able to sit on a property for a long time and not lose money.

We would love to be able to move back to the area and are trusting the perfect property will find its way to us.

sarah, did you see the closed unit i posted for the Rhapsody? Originally listed at $945k and closed at $550k. I don't quite know how to respond to your post above.

Sarah,

Be assured, there is no possible way anyone is buying properties at the Rhapsody, Graceline Court, SoHa, etc, etc, for anything close to asking price in the next year or more. So you are right, they will be sitting on properties for a long, long time, losing money by the minute.

aboutready: Yes, I did see your post and had looked at other recent closings. Perhaps when they hit the magic 71% they became more firm at how far they are willing to negotiate. We all know there are some developers who are comfortable sitting properties.

I live in the Kalahari as a renter and I don't get it when people say it's 90% sold. The place doesn't seem fully occupied to me. I've only seen 2 other people on my floor and the laundry room is always empty (not that I'm complaining). I'm starting to love the place and thinking maybe we should buy...When people say 90% sold, does that just mean of the apts the developer has released (and maybe there are more that aren't on the market yet)?

As another renter I can safely say its because so many of the units are owned by investors...I have seen at least five empty ones that closed, but are vacant and for rent. Others are for re-sale already.

Is that a "bad" thing--units owned by investors? I am a new comer to the market place...be patient!

I don't think its bad for your living situation...it might be bad from an investment POV, since clearly speculators were artificially inflating the value of these units...let me tell you, the luxury condos for rent in harlem are renting for 30-50% less than there original asking rents and languishing for 6-12 months (really!) before being rented. That cannot be a good sign for your potential resale value. Not to mention you will be living with 50% low/mod income and another 20-30% renters? Plus units for re-sale are being priced 10-20% lower than sponsor units. And these units for rent or re-sale could mean finacially troubled owners who cant pay common fees. In fact, in at least one unit the broker told me the owner lost his job and was desperate to rent it.

So yeah.

the low/mod income tenants' subsidy doesn't change because of the economic downturn - when I looked at the Kalahari I took it as a plus that a large # of units were awarded at lottery to area residents - if the @#)$ hits the fan, a subsidy is a subsidy, and those people are not going to be forced into foreclosure - still, I thought the prices were risky, might crash, and it was too much for me - if the planets align in the future, I may be shopping the Kalahari again, but only in a worst-case scenario for the Kalahari

Lowery,you are singling out the Kalahari. Is there a new development in Harlem that has come to grips with reality. In other words, lowered prices to where they should be right now? Where are there better deals in Harlem?

no, I'd be interested in worst-case-scenario deals, should they pop up in the next 5 years - I don't expect Doomsday pricings within the next year or two - if they never do occur, that's okay as well - I like the Kalahari, did not view the constructed units, but liked the look and feel of the whole place - what I am saying is that the fact that a big block were reserved for subsidized housing was a plus to me, not a minus - if a high-priced condo with temporary tax abatements in Harlem had no affordable units, I would suspect that an Armageddon scenario would hit it harder

i think the Kalahari is one of the few to adjust in a timely fashion to reality. but i think it was able to do so partly due to timing, and partly due to the fact that the developer got the land for next to nothing and very wisely decided not to go too high end on the finishes and amenities. probably did so because of the subsidy issue, but in the end it worked fairly well.

i'm overwhelmingly grateful i did not buy here, although it would have been a long-term purchase so it would not have been catastrophic. but it must really suck to pull up the development and see that the developer is selling your unit for 25-30% (in some instances) of the price you bought at. still, most likely this development will remain solvent, with just some natural turmoil caused by the general state of the economy, rather than exploding magnificently due to an inability to sell and rising taxes.

"i'm overwhelmingly grateful i did not buy here"

Sorry if I've forgotten, but do you mean Manhattan, or Harlem, or the Kalahari?

I think some of those new developments might implode financially, and being an owner there could be nervewracking. I don't think Kalahari will find itself in a situation where it can't pay its necessary costs like taxes, payroll, utilities, etc., because of the subsidy. It's a paradox I think people of a certain elitist mindset might overlook, but elitists wouldn't buy in Harlem right now anyway. I have no idea where the Harlem market will land, but my hunch is that that is where the biggest profits will be made on the other side of this trough.

"Lowery,you are singling out the Kalahari. Is there a new development in Harlem that has come to grips with reality. In other words, lowered prices to where they should be right now? Where are there better deals in Harlem?"

i've been out of SE for a while, any update on pricing of new developments? it would be nice to know what leverage these developers are carrying. that way we could see whether discounting prices is even an option to these guys.

being this ny... it will take YEARS for a failed building to go through the whole process (ie, it might not necessarily impact prices in the area as one would expect). imho the pricing adjustments are gonna come from small-time wanna be RE investors (overextended guys with a small multifamily that don't even have a cushion for 1 non paying tenant).

btw AR, i'm shocked somehow to see that you considered buying in the kalahari. really? don't get the appeal at all.

admin, a moment of insanity? sort of. actually, at the height they were offering a pre-release unit at about what it wound up going for recently. very early pricing, three bedroom duplex + den + 500 sf terrace. 25 year tax abatement. long-term (to be gifted to daughter) purchase. but then i had the epiphany, and decided renting really isn't that bad.

i like harlem, and the idea of a mixed-income building appealed to me. i revisted the units recently, am glad i didn't go ahead, rooms seemed very small. lowery, i agree (many months later). this building seems fairly stable, compared to many of the others. i'm glad i didn't buy at all, anywhere, and here, in particular.

a duplex might be a nice deal (very useful when having teenagers) as it gives you the space/dynamism but doesn't burden you with the maintenance of a brownstone. anyway, i'm surprised you've never considered buying a shell in harlem and do a gut reno.

i wouldn't be surprised if those ones end up having the most dramatic haircuts. actually, maybe it's better to wait till prime REOs are said and done, by then the "dream of homeownership" will be more of a nightmare (ie: much less competition for those shells) and renters would be envied. there are plenty of shells to go around as it is in harlem. but that is a serious adventure (to make a shell a livable place). i'd go for that versus buying a condo/coop, as it gives one more of a canvass. maybe i have too much free time!!! lol

admin, i considered it in 2004. would have been a very good decision then. chose to rent and have the country house instead. maybe after i renovate that house my thoughts will turn elsewhere. but a big house can keep one occupied for YEARS, so maybe my thoughts will remain fixated.

i wish the retail and services had progressed a bit further prior to the downturn. i still see tremendous potential, but it will likely take a few years longer than i had originally anticipated.

"it will likely take a few years longer than i had originally anticipated."

i'm more pesimistic than most i guess about that potential given that there are total eye sores that weren't solved during the mother of all RE bubbles in one of the epicenters... it will take another big bubble for those to improve imho. will it even be a big bubble soon enough to matter?

if high unemployment, higher vacancies and more evictions are part of the landscape during the next few years, it will go backwards big time. it remains a fragile poor neighborhood, regardless of the fact that people priced out from other areas moved in. the "priced out" effect will not be there imho once more middle class neighborhoods become more affordable.

interesting to read this thread again after a hiatus - if it's true most units were sold to investors and that going rents are nowhere near asks, there could be some people in trouble there - but I still say the units set aside for the lottery will probably carry the place thru rough times - it's a paradox I remember discussing at length with relatives, that people assume the high-income units "carry" the lower-income units when in fact it may wind up the opposite - to be clear, what I referred to as Armageddon pricing many months ago would be prices 50% or less of the developer's asking prices

lowery, by carry you mean that lottery units will not fall into foreclosure as easily as mkt rate ones?

regarding carrying costs, assuming that mkt rate owners subsidize lottery owners is correct (maintenance on lottery owners is a pittance and cannot be subject to assessments). in a building where 50% of the units went to lottery owners, each mkt rate unit that falls delinquent on common costs have double negative effect than normal.

This might interest you:

No Longer Majority Black, Harlem Is in Transition

http://www.nytimes.com/2010/01/06/nyregion/06harlem.html

admin, I'm not sure of how the financial structure of the carrying costs are at Kalahari. I think many people assume that the maint costs are higher for the market rate people to "carry" the non-market-rate. But isn't it possible that other subsidies are supporting the non-market-rate aparments? That's always been my hunch.

jason, yes, I've seen these changes in real life, and the NYT article is true.

just a comment guys
i am a physician , but won a high floor 2br2ba aptmt@kalahari 2 y ago , when my income was in low 60s during my residency ,
the price was 300K with 8K rebate towards closing from chase and 8K from govmnt.Maint fee is 356 $ .
Is it too bad? i dont think so .. garage for 200/mo and lots of parking around ,gym ,and very clean with "good smell" building ,very well maintained. 50 % are young professionals .You will never say that some units in this building are affordable housing/lottery apts. 5 blocks to central park...Madison , restaraunts , subway 300 ft from the main entrance,,, what else do you need ??? can u find better deal in manhattan for this money? very happy now....BUT looking to buy one of the PH duplex now as an investement @ kalahari , they have only 7 aptmnts left , may be they will be more flexible now , price cut is already 200k , and it was in september .Most recent, units being sold for an other 15-20 % off.Where can you get PH , duplex with prvt terrace for 4300 total payment a month with RE tax , maint and mrtge payments???

What do you think this should go for?

http://streeteasy.com/nyc/sale/518171-condo-40-west-116th-street-central-harlem-new-york

Close, but probably closer to $600K. It needs to get under $700 psf.

$375K.

It's HARLEM, for God's sake.

And just wait until the tax abatement expires. You'll see the common charges skyrocket.

That is what you would pay, but clearly the trulia et al data shows that $600-700 PSF is what doorman harlem condos sell for. So its worth what the market says its worth.

Ah yes....the Kalahari
Been a while since I've braved the dangerous savanah we call east 116TH street.
Not all dangers are precieved...some are real.

$575 psf

^^^That is in line with recent sales. And thus more realistic than $375k.

But it has a terrace so...it should priced at like its 1090 SF (assuming the outdoor space formulas hold true...)

Terrace @ half of 575psf. Should sell at no more than 560K. Thoughts?

any thoughts on new dev across the street? 23 W 116th?

What is so dangerous about east 116th street (as compared to anywhere else in the general area)?