We just got the current press release for the Douglass at 114th Street and FDB/8th Avenue which is right by the hotly debated housing in the thread from our previous post: LINK.
"After sales launched officially in November 2009, the development (The Douglass) sold rapidly, reaching the 75% mark in eight months. Buyers have taken advantage of the reasonable prices, excellent design and quality finishes, as well as the 25-year 421-A tax abatement and availability of FHA and Fannie Mae financing.
A nine-story newly constructed building near Central Park and Morningside Park, The Douglass (theDouglassCondo.com) has a total of 38 condominium residences. The remaining ten units include two and three-bedroom residences ranging in size from 1,015 to 1,322 square feet and in price from $649,000 - $829,000. With the TCO (temporary certificate of occupancy) obtained this week, closings and move-ins will begin this month."
Thoughts? Remember, user names please. We will cover some buildings that are having a harder time tomorrow. Facade photo by Ulysses.
I love how the arched windows of the neighboring building show through the modernist windows of this one.ReplyDelete
The press release is an ad, so I'll kick it around. I say the place is seriously overpriced, everybody knows the oversupply of condo inventory is tremendous, it's a complete and total buyer's market and I would not buy into this place at these prices. 1400 Fifth Ave. is also just a stones throw from Central Park and will crack the sub $500/sq' in asking price any day now, it sits at $500 ppsf right now asking. Offer'em $475 and the ability to move fast and they will jump on that like White on Rice!ReplyDelete
This thing is going down my friends, the economy is F'ed well into the next election. We will see Condo Apt Inventory blocks from Central Park in Harlem selling for $375 - $399 ppsf in 2011. A couple years ago no one would have said you could have bought into 1400 Fifth Ave. for under $500 ppsf, but you can, right now!
Here we go again...the economy is not F'ed. Look at the earnings reports and market today. Actually, keep an eye on earnings for the rest of this month. There is a definite upturn in confidence.ReplyDelete
8L sold in the same building recently for $580,000, which is around $530 sq. ft. I think $500-550 sq. ft is the selling point.
Chris, if we use unemployment as an indicator, recognizing there are many indicators, 9.5% unemployment signals "F'ed" economy. Just saying...ReplyDelete
JKA...I hear you re. unemployment, but typically an uptick in the market & earnings are the first indicators of an improving economy, followed by employment. Waiting is part of the frustration. Then again, I am by no means an expert (real estate and markets)...so who knows right? I think you need a crystal ball.ReplyDelete
WSJ - "Wall Street cut more jobs in June [Financial activities lost 1,700 jobs in June.], but New York City's unemployed found one sweet spot: Cupcake shops are hiring. ENDReplyDelete
Who has more potential to buy a Harlem condo, a Wall Street worker or a Cupcake worker? I am not joking here, above is the exact news the WSJ reported on the status of employment in the city. The trend continues, the jobs that drive real estate in this city vanish by the month.
This thing is going down my friends, but we'll always have cupcakes!
The economy right now is a mixed bag. Earnings reports are up for many financial institutions, and conversely unemployment is high. But, unemployment has been high for quite a while in the U.S. and NYC and there has still been activity in the real estate market. So, really, unless you have a crystal ball as to what is going to happen in the next six month your opinion is really just that, opinion. For every educated, sage, economist right now who is bearish on the overall market, you can find another that is bullish. However, even if you take a bearish stance and say prices are going to continue to normalize lower, 300 ppsf would essentially indicate an armageddon of the NYC economy, which is unlikely.ReplyDelete
In an effort to steer this back to the posting subject matter. This building, like some others in Harlem appears at first glance to be selling. But a closer look at the transactions indicates that most units are in contract, and it is difficult to glean if they are still relevant contracts and what the actual selling price is. It does not make sense considering there are other available apartments in Harlem for lower asking prices that are not selling to assume that these are in contract for their asking price. When units fall into closing we can start to evaluate what the market rate actually is.
Otherwise, we can only depend on actually closed properties over the past 6 months and what those sale prices have been, which makes a very strong argument for a price point between 500 and 550 ppsf.
There will certainly be some outliers and probably regretful buyers that bought at the 600 ppsf price or higher, but generally the market appears to not be able to move units in comparable buildings for prices above 500 -550 ppsf.
Aside from all the ppsf numbers that are being tossed around can we have a discussion about what the developers of this building, of 88 mornigside and of parc standard were thinking? or if they were thinking at all beyond short-term greed? All of these developments will give buyers pause because of their proximity to undesirable buildings or behaviors. Some will decide to take the plunge but others will not, except maybe at drastically reduced prices. Will developers try to hold out for top dollar or will they realize that the longer these buildings sit empty the more undesirable the location becomes?ReplyDelete
Jen, I think that is really what the end game is.....with all these psf's "being thrown around".... The old adage goes, everyone has their price. Yes, there are social burdens to the neighborhood, some locations worse than others. However, much like the developers who were nearly given many of these locations to build, a potential buyer is going to say "at that price" what can I loose...... What that magic price is now for the average harlem condo buyer has yet to be fully realized due to lack of solid sales data.ReplyDelete
And yes, some of these developers will let them sit before they reach the magic number, some will foreclose, some will be rented.
Jen, I think it remains to be seen whether buildings like The Douglass are a success or not. 75% sold would indicate it was a great success, however, as pointed out, it is difficult to say until we see real numbers.ReplyDelete
I agree though, that it isn't ideal. I am pretty sure they are hoping/holding out for continued improvement in the immediate area.
As for holding out for top dollar, I think prices have already come down quite significantly and there is every chance that coupled with continued improvements in the neighborhood places will sell. Remember, as with the new Target opening in East Harlem, with every successful completion of a new project (Aloft is next on the list) there will be a news release and media blitz which more often than not generates renewed interest in the immediate area.
To Chris & JKA, what does "Fed" mean? is it an abbreviation or an acronym for something?
oh brother...... its f'ed..... as in f%^kedReplyDelete
But Chris, a "media blitz" is not necessarily connected with the reality of something. Remember Andy Warhol ? That was the message.ReplyDelete
People may gain interest as a result, extend themselves perhaps, but then run (quietly) once they have moved in and realize what they have gotten themselves into. It seems to me that it would be better to ignore the media blitzes and deal with fundamental problems. Encourage people not to give up but tell them, this is what there is and here's what you can do. Markets and images come and go but garbage rots on the sidewalk.
A media blitz is not enough, and it will not sustain actual change. It may even hinder it, if people are content to leave things there. Media blitzes do not indicate anything much except large PR budgets and "interested" people willing to consume the media.
Faria, yes, but to help undo the decades of negative attention that Harlem has received, it will require equal amounts of positive media attention. Of course this is not the answer to the deeper problems (I don't think anybody has suggested it would), but for those who only associate Harlem with drugs and the Globetrotters, then positive media celebrating what is great about Harlem is good PR.ReplyDelete
"But then run (quietly) once they have moved in and realize what they have gotten themselves into."
You make it sound like Harlem is a hell hole. This is exactly the sort of negative generalization that has attached itself to Harlem over the years.
Many come, make Harlem their home and stay AND then choose to do something about the problems that exist. Myself, my neighbors, I don't see anybody running (quietly) or loudly for that matter.
Yes, there are fundamental problems, but that does not mean the press and media only have to focus on the negative.
Chris and Faria, you are both right. This blog is a great blog to be able to look at the positives, the negatives, theoretically without an sales agenda.ReplyDelete
Farias point is valid in that marketing is meant to give allusion of grandeur, which is often times unrealistic. That is bad because people impulse by based on buzz...
That is bad because, and we ARE seeing this, people get into contracts for apartments that are overpriced, realize this, or get a full reality of the neighborhood, and walk away from the contract..OR worse yet close, become underwater because if they tried to sell they would loose closing costs and may have to pay a balance. If they stay they are bitter.
Other developments are going into foreclosure. What happens to the people that closed on apts in those buildings.
Put yourself into the mind of a condo buyer, the type that needs a doorman and an elevator. A cookie cutter development apartment. These are not the types of people that take on the renovation of a brownstone or a townhouse. These are people that are buying into full service buildings. They like their garbage removed for them and not necessarily deposited on the street.
But on the flip side, yes, in order to sell these apartments and get more residents on the streets, to buy services and support businesses like social, and to get them to complain about the policing and the crime rates, and the garbage on the streets. We sort of need more amplification of voices that may, if we are lucky spurn more change. So in that respect media blitz that might result in residents that appreciate Harlem and its potential is in our best interest.
And for what it is worth, this is relative discussion for this building because it is a nedia blitz building with a bunch of unclosed contracts, alleging to have sold at high prices, but in reality the duration of time from contract to TCO, not even C of O, has been long enough for a portion of intended buyers to walk. Most contracts stipulate a period of time that the building must TCO, if the building exceeds that time it is at the discretion of the buyer to walk away unharmed. The Douglass is under no obligation to update the status of the contract immediately and may leave it recorded as a sales ploy to try and show interest in the building. The proof will be in the closing data.ReplyDelete
I think partially you are underestimating the average intelligence of a condo buyer. These aren't people who know absolutely nothing about Harlem. More than likely, they have been to Harlem, eaten here, walked our streets and frequented our parks...and witnessed garbage on the streets. To say they are buying and running because of Harlem is a pretty large generalization. People are buying and running in Long Island City, on the Upper East Side, Williamsburg, not because of the area, but the simple fact that if you paid $800 sq.ft for a place that is now hovering between $500-600 sq.ft, there is an incentive to run. Don't confuse it with people suddenly 'discovering' that wow, there is garbage on the streets.ReplyDelete
Yes, we would like better schools, facilities etc., but you are paying a premium on the UWS or in the West Village for example to get these on tap. People buying here for half what you pay there already know that.
Positive media can come in many forms. The recent opening of Target on the East Side was coupled with a red carpet event and celebration of Harlem specific merchandise. That isn't tricking anybody into buying in Harlem, but yes, it may encourage a few more people to visit and potentially fall in love with the place. Don't confuse positive media like that, with sales pitch buzz from realtors( that I agree is often painful and damaging).
The same can be said for South Harlem, Central Harlem or wherever it may be. If positive press is deserved, then damn well get it out there. With a greater number of people who want change, change will come.
Okay so the developers built, disregarding the immediate environment, and walked away leaving real estate brokers to make unrealistic sales pitches which surely ring false to anyone with half a brain. Recalibrate the prices and the pitch. I don't think that Harlem is a place that some who can afford pampering will choose, so "luxury" is just the wrong approach. What Harlem has going for it is that it is intensely urban and authentic (with access to incredible green space) which is why many people want to come to live in NYC in the first place. I love parts of Brooklyn but the newer areas that are being colonized just seem like overgrown college towns and while that has a certain appeal it really isn't city living in the way that Harlem is (both good and bad). Maybe if brokers and developers rethink the uniqueness of this neighborhood they will have more success.ReplyDelete
So sorry to have pressed your buttons by asking a very simple question. If you can't answer the question without the obvious expression of exasperation, then don't answer and keep it moving! I sure hope you are not a teacher or in any job responsible for impressionable young minds. There are so many cyber-affiliated abbreviationbs out there that one has a difficult time keeping up. You should thank God you are up on such stuff and not be so damned rude! And beside, the question was not directed at you!!!!!
Jen, I wholeheartedly agree. For me, Harlem is the perfect fit for a lot of people out there who actually appreciate that families still BBQ or choose to sit out on the stoop. I love this stuff.ReplyDelete
I think Harlem is uniquely positioned as a place that is starting to offer a lot of the modern amenities that are in demand, but at the same time retains a lot of the traditional NYC urban values that make it such a special place.
Just my opinion.
Chris, I understand your frustration, but I think you are overestimating the condo buyer. And believe me, there are wonderful things about Harlem, which I have identified as an anonymous poster on this blog countless times. But the reality is that Harlem is unlike the other places you mention with regards to its social issues. For example, a recent Harlem condo buyer may have thought to themselves that sure there is crime in Harlem, but its not that bad. Plus its going to gentrify soon like all the other neighborhoods... they fall into contract with realtor buzz and rosey posts about farmers markets, and then they read the new york times article on the 12th that highlights the local precincts being 4th and 7th in violent crimes in all 78 boroughs...... or they spend more time walking the streets in the evening and going to the parks on weekends.... and they have an out... I tell you right now a percentage are walking away for these reasons. And for those not in contracts they are choosing not buy. This is a reality. And tee shirts at target aint going to make it go away.ReplyDelete
Greg, I think you are being a little sensitive. There really wasn't that much frustration on my post. Sorry if you felt offended.ReplyDelete
This place is advertised just right! Did you see the "Neighborhood" slide show? (1) The rendering with the street shows people walking in the area, none clearly Black, if I had to guess they appear to be White. (2) You see retail store signs but no people. Is not that interesting? Gee, I wonder why there are no actual people in the series? If one were cynical, one might think the idea is to reduce the imagery of BLACK people as much as possible. If you showed actual people in the Neighborhood, you know you would have to show Black people. So a way to avoid that, showing images of Black people is to show NO people. Show no people entering or exiting the Subway Station, show no people sitting at the cafe where one would think it's logical to show people, show no people anywhere, this way you can't be accused of not showing a realistic presentation of the nabe. I think it's a brilliant approach to erase first impressions of ethnicity, that it's largely a Black area. Judging by the slide show, one would not even have the idea that Black people are there in the nabe at all.ReplyDelete
Harlemite...I walk the streets in the evening and go to the parks on weekends. I am fully aware that Harlem is unlike the UES as far as the social problems go. I am also aware that prices per sq.ft are half what they are on the UES and Harlem has far more parks and easier access to transport.ReplyDelete
I still think that you are grossly exaggerating the numbers who are signing contracts and suddenly flee running scared. I guess the telling point will be when the actual sales numbers are revealed for places like The Douglass. I know a number of people who have bought on FDB and CPN who know exactly the pluses and minuses of where they currently live.
You sound like an irrated Harlem resident who doesn't want change because you may have to pay higher rent. Is that a correct perception?
Let's see if the 75% actually close and don't walk on their down payments. It appears that is what happened on the "luxury" condo on 120th and 5th.ReplyDelete
"Ethnic Cleansing in Advertising" Brilliant!ReplyDelete
Chad, that place was crazy expensive. I would probably have walked away if I was locked in at $900 sq.ft. I think you will see less people walking away from contracts when they are locked in at between $500-600. Like I said, Long Island City and Williamsburg saw a ton of people ditching their deposits at $800 sq.ft.ReplyDelete
Hey InvisiblePerson, I had the same thought about some advertisements I saw. Interesting, is it not ?ReplyDelete
My experience has been close to that of Harlemite, people leaving, some of them friends. I am glad if Chris (or anyone) has had a different experience, because I do agree that the mere presence, consistently and in greater numbers, of working- or middle-class people would do a lot here to resolve the problems without changing the positive things.
The hype that creates an impression not totally on the mark can have serious implications. A building on St. Nicholas Terrace had apartments for rent, $2,300. That is simply preposterous for that area and environs. Nonetheless, people came, and in rather short order, given the disastrous neighborhood and hostility, they left. One of the leaving residents commented to me that she had thought, for that price, things could not be so bad.
Of course, as the economy worsened, the owner was not able to rent them at that price and rather than lower the price, he turned them into rehab units for ex-cons and drug people, city money, insurance, and so on. He is probably getting more than his asking rent of $2,300, and he can hang on until the economy/neighborhood improve.
Of course, originally they were rent stabilized units with families, and no one has been able to figure out how the whole building suddenly became de-regulated, but I digress.
That's right, a "sober" house in that neighborhood, imagine. The residents now join the ranks at the street corners in the evening and even during the day if they are up.
Faria, great post. Your point about the rentals going rehab is interesting. One thing I know nothing about is the incentives land lords are given for turning places into rehab centers. Do they really bring in that much money?ReplyDelete
In response to Chris, we are guessing that there is quite a lot of money involved. Why else do it ? I am sure that they could have rented the places for $1,500. or similar.ReplyDelete
Of course, it also enables them to warehouse the apartments. This is illegal and it should be. The logic of market-rate is, if you cannot get your $2,300. then you ask for less, and everything adjusts itself. I think some owners have found some ways around this. I am against doing away with rent stabilization in NYC for that reason. The markets in rentals will never be allowed to move freely. There is too much money involved.
For what it's worth, I think a lot of the posters are giving the marketing powers way too much credit here. I've been following the building closely and I really don't think they are masterminding much of anything.ReplyDelete
I'm not sure if they have any obligation to update the status of the contract immediately, but they seem be doing that. For example, in the first week of July they changed the status of two units from "Contract Signed" to "Available". No way to know when those buyers actually walked away and how long they took to update the website. But considering that to get the tax credit the closing needed to happen by June 30th, if I had to guess I'd say that the buyers had a right to walk away and get their deposit back after June 30th and the website was just updated quickly without too much thought.
Would be shocked if anybody is walking away from deposits on this building. Most of the contracts were signed in March and April of this year. Real estate prices haven't moved drastically since then and mortgage rates have fallen by a decent amount. If somebody had a right to walk away and retain their deposit, might be a different story, but hard to imagine walking away from a deposit here.
Pleased to see a healthy discussion with user namesReplyDelete
What is the time span people are envisioning for this oversupply of condos to sell? 2 years, 5 years, never? At some point it will be diminishing returns.ReplyDelete
point of reference? The Lenox @ 129th & Lenox, one of the first open market new self described luxury condo bldgs, 77 units, opened in '06, to this date 4 yrs later 18 units have still not sold. the developer decided to rent them out, it's a desperation move to get cash as developers have payments too, it was to no avail, the developer still filed for bankruptcy last March.ReplyDelete
in answer to your question, I suspect most of the new inventory and destiny of the Harlem developers will be like The Lenox, inability to sell, they'll strategically move units to rental, and many will still go bankrupt. you see desperate acts and efforts in harlem developments all the time, like "Bulk Selling", They bundle units, offer at a discount from the listed prices. Halstead pulled this gimmick and applied it to the Kalahari and Savoy West. To quote "Brokers are targeting American and foreign investors who would buy the apartments and then rent them out, with the potential to get a 4 to 7 percent return on their purchase".
None of this stuff was in the original B plans for these developments...A condo bldg is supposed to comprise owners, asset holders with a vested interest in keeping things nice, not renters who don't give a sh*t as they've no skin in the building. Developers are so desperate, they are forfeiting the appeal of the whole notion of a condo (being a group of owners, people with a vested interest, etc.), this even flies against strict qualifying compliance with banks in getting a mortgage, many of which won't give a mortgage to a development unless it has X% sales to future dwellers, not wealthy speculators from afar.
when the smoke clears, this stuff will go rental, the lag is about 3 years.
If the number of posts these condos receive on this site are any indication, I think that, long-term, Harlem condo real estate is a worthy investment.ReplyDelete
Yes, short term there may be a risk to one's personal finances. But this is Manhattan. Every other neighborhood here is a solid investment. There's no reason why someone who's in if for the long haul isn't making a good choice. Do the necessary due diligence on a building, because, like children, each is different.
The best outcome may be that because so many jumped in on the hype 5 to 7 years ago, even with the lag on the overstock of condos, and the condos in the brownstones (which are suffering even more than building condos) Harlem will not revert to the days (pre-1997) before it was chic and a "good" investment to live here. Too many people have too much invested to let that happen - and right now they can't go anywhere else and get equal value.ReplyDelete