remarkable drop in Harlem new development -- sign of things to come?

i wonder if that sale included the extra 600 sf?

Joe,

Still too high for Harlem. Things are becoming desperate and they will continue to spiral down. And not only in Harlem.

Joe, That's an apartment I had seriously considered a few months back (remember our poetry battle?) At its peak, the asking price was $2.4 million, so the one and a quarter million sale price represents quite a fall. It is a great apartment, but I agree with bronxboy that it is still overpriced, when you consider that there are no amenities whatsoever, and that the views they currently have are going to be cutoff when the building across the street is finished. I decided that for that money it was worth waiting a bit longer and buying a townhouse.

The great majority of my saved listings in Harlem failed to sell...

the fitzgerald is a fright show. sponsor has been offering financing for a couple of months with only 5% down and it still isn't moving.

any thoughts as to what a brownstone should go far below 125th in 6 months?
the 130s seem to be converging now to 1.0 million for renovated ones
below 125th - very few sales -- but with the new developments crashing like this one, I wonder if that will set a new price point

I think a new price point is inevitable. I think that in 6-12 months we will be at 1 million. Aren't you in contract, though, Joe?

And, still nothing happening at 5th on the Park. It's a ghost building.

yes --- in contract and shuddering -- priced in a 40% drop though
on the other hand if the fancy condos go to 800k for the kind of thing that sold for 1.25 and the brownstones that are currently 1.8-2 go to 1 then I am going to feel plenty stupid

right now it is still difficult to get someone to part with a shell for much below 800-900

cherrywood, where in Harlem are u looking at?

I'm open to anything below 128 and from 5th Avenue west.

bronxboy what do you think would be fair price for this apt -- 2166 or 2700 sq ft high end finishes on 124th?
i agree with you that the prices will get to whatever the equilibrium point is but not sure what that is

In 1999 they were selling complete townhomes above 125th for $500k. But most people bought a classic 7 in prime NYC for that much. So I think that ratio will still hold, what is a classic 7 in prime NYC in 2 yrs and there is where a full townhomes above 125t should go for.

My opinion has been and will continue to be 1998-2001 prices give inflation adjustment if your income is solid, if not 50/50 we get to those prices w/o inflation adjustment.

Ppl thought me crazed calling for $500psf and nycre bks, we are just starting our tsunami.

Joe,

I haven't seen the apartment. What are the amenities? Doorman? Parking? Gym?

above 125th.....
110 to 125th is a bit different story. the area 110 to 125 near Morningside Park is actually nicer than the 100-110 blocks east of Broadway

what is your projection for a classic 7 in the UWS? 500 psf so about $1 million for a brownstone above 125ht?
I'll buy that.
However, So Harlem is a visually different place and more attractive than many other areas.
Remains to be seen what that translates into.
The condos that were at or above 1000 psf in So Harlem seem to be headed for 600-700 psf right now.
So if we put that on par, then we are at a $1 million for a brownstone too

incidentally, the Kalahari has been selling briskly recently between 600-700 psf

Add a factor to Harlem buyer-seller big gap (the reason why very few properties are selling): the broker's vested interested in high prices. The guy that happens to have the biggest townhouse inventory for sale has 2 of his townhouses for sale by other broker. It is in his own interest to keep prices high. His prices are absurd. He sold only one townhouse and has a very small one in contract. Most of the south Harlem brokers I met, the vast majority, has huge mortgages in important properties in the area. I wonder what is the impact of this fact on prices...

don't think folks fully appreciate just how much prices are being held up by gov't. policies that are almost certain to expire in the coming months-- $8000 first-time buyer tax credit, Fed buying of GSE-backed MBS securities, artificially low interest rates-- and other policies that don't seem to be staving off market forces at all, like the foreclosure modification program, which has done nothing to stop the hemorrhaging that's going on with mortgage delinquencies, which are up for the 4th straight month. Low end sales are improving, but despite all these actions, the high end market is still extremely sticky. The bullish exuberance I see from some quarters on this board is blithely oblivious to these fundamentals. I don't know whether prices will go down to $500psf all over Manhattan, but it's magical thinking to believe we've hit the bottom of this market.

Bronxboy, there are no amenities-- no doorman (unless you consider a "virtual" doorman a doorman), no gym, no parking. Zip.

joe, i think the kalahari is rightly perceived as being much less risky. still, the discounts there have been substantial.

going forward with all the buildings that started closing later will be the real issue. and an interesting one.

but i agree, it's nice housing and could attract people to the area once the financial issues are dealt with. harlem has the room for retail experimentation when things get better as prices are so much lower.

cherrywood, i suspect the loan availability for conforming loans may freeze up once the FHA debacle becomes clear. that's not a manhattan issue, but it will affect manhattan loan availability nonetheless. the low end is showing increasing signs of stress, even with all these programs.

Mimi- actually it is to the broker's best interest to sell whatever they can sell. The difference in the sales price is usually not going to be the deal breaker for them. I think the broker is usually trying to get the deal done (and even sometimes telling the seller to bend a little more).

What has always been interesting to see, however, is that when a broker is selling their own property, they tend to hang tough with the price. In that case, it really IS their money, and then they don't make price cuts as easily as they try to convince their other seller clients to do so.

ph41, I guess that if you are an agent you want to make a sell. But what about having 2 houses for 2m that and selling a comparable for 1.2m? Would you do it? His price psychology is totally influenced by his ownership.

the sun has already started to set on what was a delightful economic Prague Spring...now, best get ready for a deleveraged reality where the cost of housing returns to traditional metrics of affordability... looking for renovated townhouses to trade between 1 - 1.5 million

brokers... better tell your sellers to man up to the new reality... or they'll find themselves highlighted on the price choppers thread and squashed by the economic equivalent of russian tanks

listening to the people on this board I focused on getting a place that prices at 13 to 14x current rents (which may collapse) and with a 4.5% 30 year loan
Even this looks in jeapordy..............listening to this conversation

jeopardy

I think the vast majority of the new condos in harlem were severely overpriced. As I've said before, it makes no sense to have these high-end units when the neighborhood's best supermarket is fine fare or Pathmark (no offense to them, but the produce is lacking sometimes). But I think its tough to draw conclusions from higher-end price cuts down to lower-end. But should 8K affect an 800K purchase? I really would hope not, and people who can afford those places probably do not qualify for the tax credit.

We're looking at a place that is <500K, about 20% below peak. Priced at 420/sq ft and it's near strivers row. Seems like a well-built condo and is still in excellent condition. I'll be pissed if prices drop 20% more, but ok if its only 10% more since we plan on being there as long as we can.

joe... the right way to play harlem is to purchase a 4 family using a FHA loan with only 3.5% down...purchase price could be as high as 1.5 and you can still borrow around 1.45. short of that I would stay away until the more significant price adjustments come around... I'm betting renovated 18 footers between 118 and 123 west of lenox will trade for 1.3 or less before memorial day

Aren't there severe income restrictions on FHA loans? Like 70K or something like that?

no

adamsmith
you are right
renovated 18 footers at 1.3 would be tempting
the fha will do what you say and indeed I am using it but at 10% -- restriction by the seller

joe - good for you... FHA loans are funded by the taxpayer... wouldn't be fair to exclude those paying the majority of the subsidy

oh I forgot, we are supposed to be in the age of willful redistribution (obama) at the expense of supply and demand (me)

what's the tax story on 2 3 and 4 family townhouses... can you approximate the additional tax burden of the incremental adjustments to the CoO?

dont know re the tax burden
I understand that 1-3 is one category and 4-6 moves to a higher (commercial) category
The bulding I am getting will have a 15 year J-51 exemption

good luck... by nearly maxing out your leverage and preserving your capital reserves you stand a chance... even as the market continues to spiral... if you love the place and it possess some unique feature then jump in... if you think an equivalent TH can be easily located then walk and wait... you'll be able to purchase the same product for at least 20% (and possibly 40% less).

i'm told the above advise also applies to women

It's available online nyc dept of finance. The trouble is that you run the risk of changing assessed value when you change C of O. Better (in general) to keep a higher tax rate, lower assessed value.

main unique feature is the location and that it is gut renovated
a better TH could be located but at a more interior location or a street that is not as nice.

joedavis, was your new house originally renovated and lottery-sold under one of the 1990s HPD programs -- I think HomeWorks or something like that?

yes

Excellent!!!

any reason to be concerned about houses renovated under this program?

I don't know all that much about the program, but nothing much to be concerned about. I'd expect minimal (but not substandard) construction quality -- soundproofing, joint taping, etc. Also bad taste on finishes (made no better by the fact that, for the earlier part of the program's run, they allowed buyer input on pre-renovation modifications).

I also assume (maybe not correctly) that the tax assessment is based on pre-boom prices, so when your abatement and/or exemption run out, your taxes should be nice. Heed nyc10023's warnings about triggering reassessments through remodels. I wonder if any "green" enhancements are enough to do so . . . ?

You've probably already answered this, but what's the configuration -- 2- or 3-family?

3

Rhapsody. I'd bet the purchaser of 4D is not so rhapsodic. closed for $950k 07/08.

http://www.streeteasy.com/nyc/sale/166893-condo-2056-fifth-avenue-central-harlem-new-york
11/20/2007 Previously Listed in StreetEasy by Rhapsody on Fifth at $1,100,000.
01/02/2008 Rhapsody on Fifth Listing is no longer available.
01/16/2008 Listed in StreetEasy by Corcoran at $1,100,000.
03/15/2008 Price decreased by 6% to $1,035,000.
07/16/2008 Price decreased by 5% to $980,000.
08/15/2008 Price decreased by 13% to $850,000.
02/08/2009 Price decreased by 12% to $749,000.
06/04/2009 Listing entered contract.
07/29/2009 Listing sold.
07/29/2009 Sale recorded for $690,000.

http://therealdeal.com/newyork/articles/cheaper-condos-moving-in-harlem

Says here that the Harlem comeback is here. So buy now or....

The PPSF is up because of the mix. Resale prices are not up. But in any event, like for like in most cases you'll pay 30-50% less PSF than you would below 96th. So the relative value has to be looked at geographically not just intertemporally.

I was in the childrens' playground at 116th and Morningside and Bier International today. There were a ton of people around. Also, lots of new faces relative to last year (when I was at this playground last). I suspect a lot of people moved in to all the new condos and apartments over the past year.

People are paying to much, there is a glut of foreclosures coming in new york as soon as the banks get their acts together, prices will drop again.

If Harlem gets too expensive please let me know.

I'm going to be giving a black-folk only discount on my apt. when I sell it. Seriously.
I want to integrate the building.

Citarella has a ton of tuna, what's this bullshit about our fish Eco system collapsing? Flmaoz

http://streeteasy.com/nyc/sale/584643-condo-304-west-115th-street-central-harlem-new-york

Keeps Dropping.

>Citarella has a ton of tuna, what's this bullshit about our fish Eco system collapsing? Flmaoz

Do apes feed tuna to their monkey children?

Having recently purchased in Harlem, some of the places are overpriced. And as is the case with everything some apartments are better than others so I wouldn't read too much into a few price drops on an otherwise hot area (west harlem). There are always going to be apartments where the seller is overreaching, where the apartment isn't as great as it sounds and where sellers are desperate. Many of the new buildings (Livmor, 88 Morningside, Apex, etc.) did and are doing quite well. Other "fringe" areas like LIC and Williamsburg are still moving as well.