Harlem - value converge with the rest of NYC?

The bubble has burst. The progress has stopped.

Progress? Bubble? Burst? - yet you're a borker still pumping nyc thinking you 'add' something.

2.2k open houses. Manhattan gotz a wayz to go. Harlem got that much and
More. Gonna be a long journey. Get comfortable shoes.

So, you think values in harlem will fall more than elsewhere in NYC?

w67th, weren't there 3.2k open houses last weekend? What happened?

last i looked, today is mother's day.

On shit Bjw, you forgot flowers for mama bj.

Something tells me cc didn't forget his mother today. :)

>last i looked, today is mother's day.

When did you look last?

Valuation follows the last in first out rule.
Harlem, which has come a long way is still priced as though it was sold off a map.
It's close, it's beautiful, it's a fraction of it's old bad-ass self, the fraction that's left is the fly in the ointment.
It's the home of the lefty yuppie visionary with an unlimited investment time horizon locked in mortal combat with the Harlem of yester-year. Someday...like a little Italy with no Italians, a lower east side with no Jews and a hells kitchen with no Irish...things change.
There was once a buyer who thought New Amsterdam was too........Dutch.

falco... well put. I was just there this afternoon on a long walk. On FDB walking north from 110th I walked four blocks before I saw a non-Caucasian. I was thinking, "What happened to Harlem, synonymous with African-American?" FDB pedestrian traffic gradually got more mixed ethnically further north, and on Adam Clayton Powell above 125th there was a strip seeming like a mirror image of the lower FDB strip, cafes and restaurants a little less chic and a little more hip and down-to-earth. I was trying to compare it in my memory with Columbus Avenue over the decades and just gave up. In answer to the original question, though, nothing surprises me as much as how Tribeca and Meat Market have become the high prices they are, because I would have thought, well, Tribeca was a spillover from Soho, which was a spillover from Greenwich Village, and the Far West Village is a spillover from the West Village. FDB is a spillover from the Upper West Side. Does that answer the question? There are many more convenient neighborhoods.

cc, what are you saying? You wouldn't buy your mother an apartment? Only 1,000 sellers care about their mother?

Nobody knows for sure what's going to happen with Harlem. That said, I think there's plenty of reason to believe that Harlem will continue to get more valuable relative to lower Manhattan. In a free market, prices should roughly be a smooth curve based on desirability. If all other things are equal except how far out the neighborhood is, we'd expect to find neighborhoods where we can find the same class of buildings for only a little less.

If you look at the luxury condo market, below Harlem, it's pretty tough to impossible to find, say, a 2 BR for under $1,200 psf. In Harlem, you can find them in the $500-$600psf range without any problem. That's a HUGE gap.

Explaining the size of gap was easy a few years ago. The neighborhood didn't have too many amenities, etc. There was still plenty of blight.

But things have gotten a lot better, so the gap is lessening. And, this trend should continue. Why? First, the more posh places keep coming in. Second, the perception of the neighborhood keeps getting better with everybody else. My fiancee had a bad impression of the neighborhood just by word of mouth, until I took her up there, and she fell in love with it. When her mother found out she was moving to Harlem, she was very concerned. Then we took her up there, and she found it was not much different from the rest of Manhattan. Just the two of us will end up changing the perceptions of dozens and dozens of people.

Over time, more and more people will see Harlem as a nice neighborhood that's convenient to midtown. More and more people will try to take advantage of the fact that they can get a lot more for their money. And as that happens, it will keep pushing prices up relative to everything lower in manhattan, even if prices there do end up going down. I don't think prices will ever reach the level of anything below 110th, but I also don't see any logical reason that they will continue to be 50% of the price. In a relative sense, Harlem real estate currently looks like a bargain to me.

>cc, what are you saying? You wouldn't buy your mother an apartment? Only 1,000 sellers care about their mother?

You think columbiacounty has a mother?

I live in Harlem and agree with all.

However, there is a much much greater density of projects in Harlem than elsewhere in Manhattan. And they aren't going anywhere.

So yes, prices will rise (I hope so)... but Harlem will never look like Tribeca or the West Village.

I'd like to add my take on this topic as it relates to lower East Harlem, or as I've recently heard it referred, NoYo (North of Yorkville)

After having lived in the neighborhood 2.5 years I have just purchased a gutted condo on the east side below 110th.

We had some friends visit the space recently and who could never imagine living 20 blocks further uptown than the UES.

They were fairly shocked to see I had picked up a lofted 15' ceiling unit overlooking a garden with a balcony, close to 1500 s/f incl. 2nd floor, huge closet space, and for less than their 1 bdrm was years ago, and less than half their monthly. (but no doorman, as in their case)

Clearly not everything uptown is a great deal, but there are bargains to be had on properties that downtown would command many multiples of it's cost.

But I believe perceptions will turn for a simple reason.

The Target/Costco development on the East River is bringing in tens of thousands of shoppers a week to a neighborhood they previously knew nothing about. The familiarity and access to quality shopping (especially food) will over time convince more and more people that the neighborhood might be viable and a bit of an overlooked gem. I certainly feel that way.

The friends I mentioned rent a getaway house upstate for the summer. When our indoor and outdoor space (with grill?) is finished, we will have that quality of living all the time, without the urge to get out of town on weekends, or move out of Manhattan altogether for more space.

Of course it will never become the Upper East Side, but as more good restaurants and services come to the area, (I'll plug Yo In Yo Out, french cuisine) the more who want or need tp stay on the island will look towards these areas.

I actually prefer though if city home prices stayed down. I like the idea of working people being able to afford housing, and I'm not planning on selling anytime soon.

Another wrinkle here - I looked into buying in East Harlem and was told by a developer in response to my comment that "the projects will never go away," "But they will convert to privately owned apartments." I gave him the "don't give me that @*$(" look and he pointed out buildings on First Avenue between 96th St. and 102nd St., can't remember which, that had been NYCHA projects and no longer are. I could not verify the NYCHA provenance, but it was easy to determine that they were NYCHA no more. I would not go so far as to call them "market rate" apartments, but they are clearly privately owned and run and available to anyone who walks in from the street or calls on the phone and applies.

There was a thread on this forum a couple of years ago about the complex at the northern end of Fifth Avenue. Someone was delighted that the owners were in default on their mortgage. Typically, readers were miffed that the threads title had mislead them, i.e., "Fifth Avenue building in trouble!" How DARE anyone! THAT isn't Fifth Avenue! That's HARLEM and it's a former NYCHA project. Indeed it is, and I have walked past the complex a few times since then. It looks a step or two above the Parkchester complex in quality now, and is NYCHA no more. It is clean and neat, shows no signs of distress, even two years or so after the screaming headling announcing Armageddon.

On the flip side of that, something people on SE may not know is that a building does not have to be NYCHA to be chock full of Section 8 voucher residents. So projects can go down the tubes and end up in a state much worse than NYCHA projects even though privately owned.

All this is only to point out that "but the projects aren't going anywhere" is too simplistic. A large block of new housing is being added to NYC right now, especially in the Bronx - subsidized in one way or another, the prospective tenants must apply for a lottery, and their income has to fit within a (low) range. These are not NYCHA projects either. How they will hold up over the coming decades is anyone's guess.

There is no need to be Pollyanna about changing demographics of NYC neighborhoods once firmerly outside the upper middle class' rigidly defined parameters for "good," but people go too far the other direction. My personal favorite example of the arbitrary definitions for acceptable is "This is a great neighborhood, but you have to stay west of Broadway. Oh, and by all means, commute twice as far by subway to get to this great neighborhood than that place in Harlem, because that's a BAD area!" West of Broadway in Wash. Heights is a religious institution of higher learning called Yeshiva University. Harlem is halfway between Times Square and Hudson Heights. Can we spell duh?

oops - should be EAST of Broadway in Wash. Heights is Yeshiva University - same drift - watch out or you might get mugged by an Orthodox university student if you stray too far east of Broadway!

No NYCHA project has ever gone private.

You're referring to Riverton Houses at the top of Fifth Avenue, which was developed by Metropolitan Life as the negro equivalent of their Stuyvesant Town and Peter Cooper Village developments.

As for the one on the East River near 100th St., I'm not sure what you're referring to, but it is most likely an ex-Mitchell-Lama middle-income rental that was taken to market rate as per the original agreement/plan when the development was initially conceived and deal-brokered and contracted.

You're right that there's a lot of stealth low-income project-making going on.

Well, you are both correct in that many mistakenly think things that are low-income are "projects." In fact, many can, will, or have gone market rate, especially the newer ones. Of course that will happen from say 2035 on...

The fact is that "projects" in LA, Atalanta, Chicago, SF, and most other major cities HAVE been torn down. NYC is a hold out. But its the exception, not the rule. So never say never.

In a related note, Chelsea and Lincoln Center are examples of where you have a large # of projects overwhelemed by a large # of market rate buildings nearby. For large swaths of harlem, that could be the case. Its already near that for East Harlem from 96th-106th. Other parts (FDB) are relatively project-free.

So while we won't get another Lenox Hill, you COULD have more convergence in PPSF over the years. But there is a long way to go - many vacant lots left to build on, brownstones left to refurbish, more services added, etc.

Absolutely ... if you're talking about high ppsf existing near "projects" (including Mitchell-Lamas and the like), you can also include prime East Village, LES and Chelsea. In fact, high density exists specifically regarding NYCHA projects within those areas. (Lincoln Square, much less so.)

But unlike those second-string cities that jason10006 mentioned, where the low-income projects were wildly unpopular and unloved even among their own tenants (including those in cold and damp California) NYCHA projects are wildly successful and popular, with huge waitlists and nearly no turnover, so privatization/demolition isn't at all likely to happen here.

As stevejhx points out frequently, the largest public project in US is Queensbridge Houses. This is not so close to the Hunter's Point area of LIC, but it's right nextdoor to the new developments in and around Queens Plaza. Even after all the new buildings at QP are finished, there will be more residents in the projects nextdoor. It doesn't seem to be stopping the condos, though, and proximity to that mega project has not hindered continued gentrification in Astoria. There are also the Woodside projects around Northern Blvd - Queens all around it continues to get more expensive.

BTW, another stealth-projects-like phenomenon going on in plain sight is the conversion of two- and three-family homes in Queens to boarding houses. The buildings fall into disrepair but are milked for maximum rental income potential. People rent rooms by the week and share bathroom and kitchen with strangers. So streets may look like middle-class surburbia on the outside, but the old Hells Kitchen style hellholes are there.

"No NYCHA project has ever gone private."

I believe the NYCHA ended up owning a bunch of mid-rise apartment buildings as a result of tax foreclosures in the '80s and early '90s, and many of these were eventually privatized as coop conversions. Maybe this is not what you meant by "project", but I still think it's an interesting and useful historical example.

Price is a reflection of all projected known data. You can disagree and think you got a 'bargain' and convergence will make you rich by going against the herd by buying in Harlem. But excusa fka me?, is that like buying a red rose Bc tulips were too expensive to buy after the top came off 3 yrs ago? FLMAOzzzzz...

Go buy some silver! It's cheaper today.... And still cheap as compared to gold.

Go buy dirt in OKC, convergence! Baby!!!!

The best is if you buy all 11k units in manhattan. Forced convergence!!!!!

W67. I believe your comment on price as a reflection data is more accurate when it comes to the stock market, as stock are a more pure economic instrument. Housing supply and demand reflects need / want for housing, which is driven by an even broader set of factors... and also known data...

Nyc at $1k / foot for studio........flmaozzzzzzzzzzzzzzzzzzzz. It's a home! Goddaaaaammmmittttt!

Go fondle some walls. A converging wall should give you a harder boner.

what is more important than a home? some stock certicates or metal bars? We're in a city with lots of dough - you need to spend it on something...

Convergence!!!!! No risk no reward. No pain no gain. Buy now........ Or never be able to say I lived next to a crack whore!

Make sure to have your white 95lb wife with fake boobs in a low cut top walk around in high heels and 5 inch mini skirt like on a Sunday at isabella's up in Harlem. Cause harlem is EXACTLY like 5th and 72nd!

Wait, so 77th and Columbus, where Isabella's is, is considered by W67th to be Harlem?

Did I misplace a modifier?

Aren't the UWS projects right by west 67th street? Any issues with rif-raf over there?

"Price is a reflection of all projected known data." That doesn't jibe well with your lemming theory. Either pricing is correct (reflecting "all projected known data") , or it's not. You cannot use it to debunk someone else's thoughts only to completely ignore it and write it off as 'lemming juice' when it suits you.

I happen to think we've only taken one of a few steps down in price so the 'lemming' theory is a favorite of mine, but one can't deny the market on a given day. Patience is required for those wishing to purchase, as you often point out.

As far as convergence......a true convergence trade has a long and short...and I as far as I know, there is no practical way to short 'prime' Manhattan RE (quite easy to be long Harlem though)

So some Trulia data - I sure someone else will go through Jmiller and get his take - for Manhattan, average PPSF (not median, mean) was $345 in Jan 2000 and is now $1,313 - up 281%

Over the same period Harlem (which for them is Central Harlem and West Harlem excluding Hamilton Heights and the area on the west side of and west of FDB) went from $27 (not a typp) to $407 - up 1,407%.

East Harlem went from $14 to $599 - a more than 2,000% increase.

Morningside - in which they include the western half of FDB up to 125th west - went from $135 to $554 - up 310%.

Hamiliton Heights - from $34 to $340 - an exactly 1000% increase.

So clearly if overall Manhattan is up 281% versus 1400%, 310%, 2000%, and 1000% - yeah, they have converged.

They are now all 1/4-1/2 the Manhattan average, instead of say 10%.

jason,
I'm not sure of the point.
Are you arguing that it's going to keep happening or it's done and about to give back?
As most of you know I'm a Harlem lover but, at today's re$$$ your going to have to be a Harlem lover cause your going to live there for a LONG time to see appreciation.
Housing projects that will be in Harlem 1000 years from now will still cater to low income citizens. Social issues that accompany housing projects will also exists. If you live near one it will has some effect on your neighborhood experience and subsequently the value of your property.
Now if you were one of those ball-zee Israeli's back in the 80's that bought everything that was cheap and not nailed down then you had the 'big re bump'. All you needed to be is aggressive, fearless. unbiased and a know-it-all shit head and today......your a genius.

Before I moved to NYC, I lived in Boston. When I was there I bought in the South End, probably a decade after it had started gentrifying-- long after prices started climbing. When I was 22, everyone would tell you not to go there, and now, 15 years later, it's now one of the most desirable neighborhoods (behind Beacon Hill and the Back Bay). Prices climbed relative to those more posh neighborhoods, even as the RE market tanked overall. I bought right before the bubble popped, and sold about a year and a half after it did, and I still made money.

All of this despite the fact that there are TONS of projects in the south end. Big ugly ones. Then plenty of the brownstones are Section 8 housing. My block had tons of section 8 housing and a project at one end. But the renovated buildings still commanded huge prices (for Boston).

Sure, projects depress value, but you don't need to get too far away from them for it to be a non-issue for most people, as long as they feel safe in the neighborhood. For instance, the projects at 127th and FDB doesn't seem to be keeping people away from new condos just a couple of blocks north or south.

Prices will never converge with anything lower in manhattan, but there won't always be a 50% discount (for otherwise equivalent units), either. As perceptions and prejudices change, the market will move closer and closer to a reasonable equilibrium, meaning that prices should follow some sort of reasonable distribution, and not have a huge gap in the middle. Of course, I can't predict the future, but simple economic theory suggests it's probably the case. About 10-15 years ago the discount was 75%. I'd wager that in another 10 years the discount will be 35-40%.

Jason, that data is flawed in numerous ways, not least of which is that it compares the price of (nearly completely) boarded up buildings, shells, and guy-rehab needing full buildings with those that are (predominately) fully built-out, essentially new, and diced up into condos. Before around 2000, there were virtually no market-rate condos or coops to use for comparison. So while apple-apple values have risen, 2000% is bullshit.

You can argue that Tribeca had much the same construction history, but it's not true ... it basically had partition walls and finishes superimposed on solid existing structures.

Also, do you really think East Harlem is currently >50% more psf than "Morningside"?

As with Boston [hock, ptooey] the loveliness or deloveliness of project-neighbors varies directly with the wealth and fortunes of the overall metro area. It's unwise to generalize one way or the other on whether PJ residents make good neighbors to non-PJ residents.

I'm just saying that people's willingness to move into an area isn't necessarily deterred by projects, especially when crime isn't very high (which is the case in Harlem, which is still significantly safer than Boston's South End). There are lots of factors, but again, we should expect things to trend toward a more typical distribution.

I actually do think the housing market overall will drop maybe 10% more by the time the decade is out. Harlem will stay flat or tick up slightly, but will still be a 35-40% discount. The high end of the market would have to fall closer to 30% for Harlem RE to go down significantly and still leave the market looking like a smooth curve.

It's called "urban homesteading" which has very often paid off for those who can last through the 10-15+ years before the "gentrification" pays off.

"Also, do you really think East Harlem is currently >50% more psf than "Morningside"?"

Of course it is. Things from 96th-99th are priced like Carnegie Hill or Yorkville for sale and rent. Along 5th ave all the way to 110th. Plus you have 5thonthePark.

Remember Alan, these stats are things that have sold, not all units. Obviously the projects would be worth a lot less all else equal, but what HAS sold in East Harlem in the past five years has disproportionately been luxury condos, especially along 5th ave and anywhere below 100th.

There are projects on the Upper West Side, and I don't mean the ones between Lincoln Center and Riverside South. There are projects in Chelsea. There are projects in Hell's Kitchen. There are projects in Alphabet City. There are projects on the Lower East Side. I wouldn't be so sure about Harlem long-term. It is, as urbandigs or someone else has repeatedly pointed, a huge swath of Manhattan Island, so it's not like predicting what will happen with prices in Tribeca, or "Chelsea West," but the middle classes are moving in, and the relentless gentrification of Manhattan marches on.

There's also a hip, gentrifying, increasingly expensive area called Williamsburgh that has projects and is surrounded by neighborhoods full of projects.

also alan, or inonada...I would be interested in what someone who has the time could say with Jmillers stats for Harlem versus manhattan overall say from 2000 to now and 2005 now.

My guess is most of the run up happened 2000-2006 or so. But in any event convergence surely has happened. Why someone above thinks that means I think the torrid growth will continue is just beyond me. It may forever remain at 50% of Manhattan like for like. But clearly it has converged a lot. I think its likely to futher, but never quite reach.

Tough to say where Harlem prices will end up compared to places like Tribeca or the village, but seems clear that the pronounced difference in price between south Harlem and places like Morningside and the upper east and west side is mostly artificial. On a map, it doesn't make much sense.

The artificial barriers (such as fewer amenities, abandoned buildings, perceived higher crime and racial prejudices) are real, and so it's not clear if they will fade away or come back even stronger. But given the way that the area has continued to gentrify during the downturn, it sure seems like the change has some serious legs and those barriers are coming down much faster than most folks would have expected.

"The artificial barriers"

Well, it used to be 96th on the east side, and now its 100th. Judging by PPSF for both sales and rentals. So the artificial line is moving.

jason, that's exactly it: "the artificial line is moving."

So is there a discount between condos on one side of Morningside Park and the other? I realize there are no condos on Morningside Drive, but I use that as an example of the artificiality of barriers. We could pick E. 96th St. instead. So does one save 50% by crossing the street? How long does it take till the discount for buying a condo or renting an apartment one block away shrinks to 25%, and then disappears? I can well imagine FDB having no discount to Manhattan and Columbus Avenues below 110th, or at least not for the first few blocks, and then that number of blocks growing. Then the "border" spreads out a little further. In Harlem you will have not just one artificial dividing line but several.

Ten years ago it was 96th on the WEST side too, psychologically if not geologically. Now its 110th, and a lot of people (not just brokers) artificially put Morningside inside the UWS. But most people walking along FDB from 125th to 110th would say its a lot nicer than most but the farthest western parts of 96th-110th. IMO.

But you still pay less to live at 109th than 111th, all else equal.

About services - What's funny is Atomic Wings, on 113th and FDB, until recently delivered from 96th...to 116th (!!!!). Fuckers. SO many people complained it was racist (and so many condos opened up above 116th) that now they go to 125th. But this is typical for delivery places over there.

I mean they would go to 97th and Riverside, but not 117th and FDB.

Re: the PSF stats and appreciation. A friend bought his place in 2000 for $140,000, didn't put a dime into it for ~10 years, and just sold for ~$1MM. $43 / sft to $313 / sft.

And that was a fire sale price...

FLMAOzzzzz

He would have made more had he sold 2007. He only made $800k, putting $140k at risk in a crack hood and riding the greatest nyc re bubble ever known to man? Flmaozzzzzzzzzzzzzzzzzzzz. Oh my Fking god, your friend is a tool. Now imagine if he leveraged himself into a CPw 2bdrm in 2000. He'd a made millions. FLMAOzzzzz

Financial retards. Gotta love re, never a risk based true assessment of returns. FLMAOzzzzz

Atomic wings doesn't deliver anywhere now. They were shut several months ago for not paying city taxes.

Well even better!!!!

Not to mention the $80,000 in rent he received per year... He probably made around $1.4mm - 10x isn't a bad risk-adjusted return.

Perhaps he should roll the money into the west 67th street projects.

Harvester. 1995 commercial purchases in prime manhattan. Had less than your friend at risk....Multiples of your friend's rental Income since that time cant wait for turnover in 4 years Don't see me selling at fire sale prices?

Flmaozzzzzzzzzzzzzzzzzzzz. Like the kid trading x men cards for 20 yrs and yelling at his mama he made $20k!!!!!!!!! While a $100 in apple would have given you $1mm. People put their retard hats on when they do RE financial math. Flmaozzzzzzzzzzzzzzzzzzzz

PH: I don't think you could duplicate your friend's return from this point forward.

Pawn harvester. Something didnt sit well with me with your friend's $80k on $140k investment. Oh yeah, if you can get 50%+ cash on cash returns wtf r u doing selling? Oh unless you went double double double down and the market went against ya. Flmaozzzzzzzzzzzzzzzzzzzz.

When itzz too easzy, you keep going back to the honey pot don't ya? Until a Fking bear mauls your azz and eats your innards.

What does "Flmaozzzzzzzzzzzzzzzzzzzz" mean? Does your "Z" key stick?

What does selling something that returns 50 %+ cash on cash in a fire sale mean? Leveraged at 5 times, which is easy with 4%..... Gives you 200% returns.

What it means is you are stoooooppid.