Despite tumbling real estate prices in Harlem, experts say there may be hope on the horizon.
According to developers, landowners, and neighborhood brokers, real estate prices across northern Manhattan have dropped dramatically in the past year as a result of the economic downturn. Yet
Web sites that track these statistics have reported slight market price increases since the last quarter in uptown Manhattan, and some local brokers have also reported anecdotally that the traffic of sales seems to be gaining momentum.
Down and up
Statistics from the real estate tracking portal “StreetEasy” present a mixed picture of price changes in the turbulent market. For the third quarter of 2009, StreetEasy reported that among condos that experienced price cuts, those in northern Manhattan suffered larger drops than those in any other region of the borough, declining by 8.9 percent as opposed to the 8.4 percent average across Manhattan.
But on the whole, the area finally saw an increase in average prices. “Since last quarter, upper Manhattan’s average and median prices increased by 10.5 percent and 12 percent, respectively,” according to the latest StreetEasy report.
Though the overall market has shown this slight increase—a possible sign of recovery—landlords and real estate agents said the large drops in condo prices are difficult to ignore.
“It’s rough right now for brokers,” Erdene Greene, an independent broker who has worked out of Harlem for more than a decade, said. Prospective buyers are much more inclined to rent, Greene noted, adding, “Things are staying on the market for longer. There is a lot more supply but less demand. Properties used to move much faster, but now there are tons of rentals.”
Stability and hope
Beyond this grim scene for brokers, experts say there have been some positive changes in the real estate market around Columbia’s campus.
For Michael Buckley, the director of special programs at the Graduate School of Architecture, Planning, and Preservation and a former director of the institute’s real estate program, “The situation is stable in Morningside Heights because of Columbia’s presence.”
He added, “Apartment prices are stable because there is a fixed market. There is excess supply in other parts of the city, there are new developments but there is price depression. In Morningside, they have not been building a lot of new stuff.”
Bruce Dale, senior vice president for the Community Preservation Corporation, a lender and developer that often works in Harlem, said that he generally agreed that there has been some good news for local real estate. “The market is beginning to show signs of survival,” he said, adding that he suspects sales will start to pick up soon.
“Life goes on—people need a place to live,” he added.
David Daniels, a senior associate at The Corcoran Group, sees signals of market recovery already. “The traffic has picked up in the past few months,” he said, citing an increase in demand.
He added that on a recent Wednesday night open house for a condo on 123rd Street, 14 people showed. “That’s not dead,” he said regarding how this turnout reflected the market at large. “That’s just far from the market being cold.”
Still a ways to go
Yet Greene and some locals view these hopeful signs as only minor.
According to Greene, a brownstone in the West 120s that would usually sell for over a million dollars was recently sold for $800,000. A property in the same area was recently sold for $595,000, an indication that prices are still tumbling. A nearby $2.5 million property was taken off the market when no buyer could be found.
Low-income residents in the area are not immune to price fluctuations, some housing experts say. Rent traps and anxious landlords press local tenants, according to Melvin Christian, the Community Board 10 housing chair. Landlords are presented with the dilemma of keeping tenants who are unable to make payments or failing to find replacements. Renters who once sought to sell their properties and move elsewhere are “sitting still” with “plans falling by the wayside,” Christian explained.
He added, “I have friends that this is happening to, and I also hear from people coming by the board. I hear from landlords whether there are additional programs to assist them, whether they can grab some stimulus money. I hear it, I feel it all the time.”
Christian said that Harlem’s elected officials are doing their part to improve the situation. He praised two Democrats, State Senator Bill Perkins—whose district includes the Columbia campus—and State Assemblyman Keith Wright—who represents central Harlem—for “doing what they can do given the circumstances, telling us about programs and making things stable.”
For Buckley, though, political solutions can only go so far to solve widespread market problems—economic fixes are necessary. “Nothing can be done about this, except an economic upswing,” he said, adding, “It may be awhile before employment comes back.”
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