The Harlem real estate has cooled considerably since the peak of its heyday just a couple of years ago. This morning a New York Times article declared, ‘Harlem’s real estate boom becomes a bust‘ in an article they later renamed, “On a Harlem Block, Boarded-Up Buildings and a Changing Mood.”
The Times article goes on to tell about a block of 134th Street where developers and flippers have been left holding onto property that is *gasp* (clutch your pearls, folks) worth the value of the homes. Imagine that!
It seems that those ‘investors’ were simply profiteers who gambled on getting the shells and abandoned townhouses fixed up in enough time to make a quick million on property that they knew wasn’t worth that price. They lost the bet.
The real estate market in Harlem has always been a tricky one. In an eerie twist of fate, the current market mirrors that of the past. Harlem came to be an area primarily populated by blacks as a result of overbuilding and over pricing. It fell into disrepair as a result of greed on the part of many absent landlords and a disconnect between the residents and the property owners. See a cycle here?
For example the man in the picture above, Craig Charie, is trying to sell an unfinished brownstone at 221 West 134th Street. According to The Times article he had contemplated chopping up a single family home, which belonged to a Harlem family for nearly 90 years, and renting it out to Columbia University students. Sounds similar to what happened in the past when Harlem homeowners had to chop up their beautiful homes into odd configurations to help pay the mortgage. Many of the best deals on the once hot market were a result of these converting rooming houses and SROs that greatly diminished the historic and economic value of these properties. There are new homeowners that are still spending thousands of dollars to undo the damage and neglect from these forsaken gems.
I find it interesting that an influential newspaper like The Times should declare the Harlem market ‘a bust’ when similar situations are taking place in other once hot neighborhoods like Bed-Stuy in Brooklyn. As an interesting note, Forbes just listed Greenwich Village, of all places, as one of “America’s fastest falling neighborhoods.”
The way it played out in Harlem was some people entered the market early enough to benefit from the low prices and rising property values. They now live in beautiful and affordable homes that they wouldn’t have otherwise been able to achieve living in an overpriced market like New York City. There are others who rode out the market in the beginning and later managed to recoup what they invested before things cooled off too much.
I am a bit concerned about how this is going to affect the wonderful new businesses that have invested in Harlem. Are lenders and investors going to pull back even more using The Times article as ammunition for the reason want to hold off on investing any more money into what has been deemed ‘a bust?’
Could the flip side of this story be that there might be Harlem homeowners (not developers) that are actually invested in the neighborhood and content to live in what one Harlem blogger called a less “desirable” area? Could there be people who are not simply flipping houses now that the fickle money tree has whither away and died?
These are just some of the initial thoughts that came to mind while reading The Times piece. What are your thoughts and impressions. Is Harlem a real estate bust or is it simply cooling off and settling into a community that homeowners are willing to invest in long term?