The Real Deal New York

Manhattan’s northern limit

Washington Heights and Inwood finally see residential activity surge after longer-than-average market lull

May 01, 2012
By Melissa Dehncke-McGill

In the last few years, the part of Northern Manhattan that’s received the most press ink has, of course, been Harlem. But there’s an entire residential market farther north in Washington Heights and Inwood that often gets overlooked by the New York real estate community.

This month, The Real Deal talked to brokers and market analysts who follow what’s going on in the two adjacent neighborhoods. What we found is that the area has seen a recent surge in sales activity, some of which is a result of the major drop it saw after the crash, which lasted longer than it did in some other Manhattan neighborhoods. In addition, prices there are also starting to creep up because inventory has started to tighten.

One broker source we talked to said she’s seen more buyers coming uptown after getting priced out of neighborhoods like the Upper West Side, which had experienced several years of more affordable prices during the slowdown.

“One of the reasons things sat on the market for so long in the last two years was because buyers could get a one-bedroom for [as low as] $400,000 on the Upper West Side,” she said.

Today, the bulk of the Washington Heights/Inwood buyers are looking for larger apartments, where they can get more space for their money. As a result, smaller apartments are struggling, much like they are in other New York City neighborhoods.

Brokers also say they are seeing an uptick in all-cash deals, which may be spurred by the fact that prices are lower and therefore the amount of cash a buyer needs for a down payment is less than what it would be elsewhere.

Still, most report that the biggest challenge to selling in the area is convincing downtown buyers to cross over not just 96th or 125th Streets, but 155th Street. And that’s even with retail improvements like all of the new restaurants and cafés on Broadway in the 190s and on Dyckman Street.

For more on how long properties are staying on the market, what’s happening with new development and which areas within Washington Heights and Inwood are doing best and worst, we turn to our panel of experts.

Francisco Menendez
Francisco Menendez
vice president, Barak Realty

What are you seeing when it comes to residential sales volume in Washington Heights/Inwood these days, and how does that compare to a year ago, two years ago and during the boom?

The market is definitely way more active than it was in the past couple of years. However, with higher demand there is less inventory, especially for larger apartments. Right now it’s mostly people that really need to sell who are on the market.

TRD reported last month that prices were down in 2011 in the area compared to the last few years. What’s going on with residential prices so far in 2012?

As everywhere else in the city, prices were down for the past few years in Upper Manhattan. But in 2012 here in [Washington Heights], there’s been a slight increase in prices due to the lower inventory.

Which price ranges and unit types are performing best right now in the area?

People come uptown searching for larger spaces and room to grow, therefore two- and three-bedrooms are always in demand, with co-ops dominating the market starting in the mid-$400s and up.

Which price ranges and property types are struggling the most?

One-bedrooms in the mid-$200,000s are staying in the market for longer periods of time.

What kinds of discounts or negotiations are being seen these days in the area?

We are seeing more buyers asking for sellers’ concessions such as splitting purchase application fees and including sellers’ furniture in the sale price.

Sandy Edry
Sandy Edry
broker, Keller Williams

How are prices in the area holding up these days?

We are not anywhere near boom pricing, but we are definitely creeping up. I just had a unit go into contract last week that was an all-cash deal that came in $35,000 higher than the same line one flight below two years ago.

Which price ranges and unit types are performing best right now in the area?

I’m seeing much more strength in the larger apartments — two-bedrooms and up. The sweet spot of the market had been $400,000 to $550,000, generally in the two-bedroom range. The one-bedrooms are doing fine, but they are not necessarily as attractive as they were a year ago.

How is the new development market doing compared to the rest of the residential market? Are developers becoming more interested in the area?

The interest is slowly rekindling. I am definitely getting calls from developers who are starting to look at new projects in more outlying areas like Washington Heights. … [But] there is always a lag between when they start looking and when we actually start to see something happen.

Which parts of the area are doing best and which are struggling most?

Lower Washington Heights, the Audubon Park area has definitely been doing well and, I believe, outpacing other parts of northern Manhattan. Part of that is there is less inventory to absorb. In Hudson Heights, at the bottom of the market, there was a glut of one-bedrooms on the market and it has taken a while to get those absorbed.

What are the most surprising trends you’re seeing in the area right now?

The increased number of all-cash offers has surprised me. I didn’t know that people had that much free cash anymore. Maybe a quarter of the offers I have gotten recently have been all cash. Part of that is because our price points are lower than other parts of Manhattan, so people are selling downtown and moving uptown because they want a better bang for their buck.

What are the biggest challenges to selling residential property in Washington Heights?

It’s always a challenge to get the average Manhattanite to come uptown. There are plenty of people who have never been above 96th or 110th Street and can’t imagine that an entire world exists up here.

A new green market just opened in Inwood. Are there other new retail stores or restaurants in the area that are helping to bring in more residential buyers?

It’s definitely going in the right direction. For example, at 157th and Broadway, a new Planet Fitness is moving in. That’s a big step for the neighborhood. Along Broadway in the 190s, a bunch of new restaurants and cafés and hip little places have opened up over the last year. Generally, I tell my clients that commercial tends to lag behind residential. Usually it’s a two-to-three-year cycle … but we are now starting to see the 99 cent stores shut down and [new] businesses open up in their stead.

Jennifer Pasbjerg
Jennifer Pasbjerg
salesperson, Halstead Property

I know you live and work in Washington Heights. What’s going on generally with the market in the area these days?

A year ago, there were hundreds of one-bedroom apartments on the market in both Washington Heights and Inwood. It was very hard to move them without extreme discounting. Now there are fewer on the market, qualified buyers are here looking and things are picking up.

Which property types are struggling the most now?

It seems like the new construction condos on Bennett … had trouble getting buyers. Many of those units have changed to rentals because the developers couldn’t get their prices and want to wait out the slower market for a year or two. But it seems that they came on the market at the worst possible time up here. We lagged behind the rest of the city a bit.

What’s going on with the broker landscape in Inwood/Washington Heights these days?

We still have the small, local non-REBNY firms in both neighborhoods. [But] we, the bigger firms, are much more present than we were in the past.

Gus Perry
Gus Perry
principal broker, owner, Stein-Perry Real Estate

What’s going on with residential prices in the area?

Certainly from the boom they are down. [In post-Lehman terms], last year was a fairly decent year. So far this year, I think there is certainly an uptick in pricing — not tremendous, but I would say somewhere between 3 and 5 percent.

Which price ranges and property types are struggling the most?

Studios in the $130,000-to-$175,000 range are probably the slowest moving because for that range some of the one-bedroom apartments are at or right above the $200,000 mark. So the differential on a monthly mortgage payment is not huge and neither is the maintenance.

There are some new development projects in this area, like 212 Bennett Avenue and 812 Riverside Drive. How is the new development market doing compared to the rest of the market?

Unfortunately, [those two buildings] got caught up in the downturn and weren’t able to achieve the price points [for sales] they had projected. So in a lot of these projects, we have had to come in and rent some of the units. [But] there is absolutely interest in new development and I think there will be a lot of new development in the next five to 20 years in northern Manhattan. … The Hudson 192 building was to be built as a condo, but midstream they were smart enough to switch gears and make it a rental with 86 units and it did phenomenally. [The developer] got higher-than-projected rents so that tells me that there is a need and there is room for that type of development for both rentals and condos. The rental market happened to be stronger for the last few years.

Which parts of Inwood/Washington Heights are doing best and which are struggling most?

Most of the co-ops are in Hudson Heights and therefore that neighborhood has always done well, and it’s only getting better. Inwood was slower to develop and gel. Right now it’s doing well. It might have to do with the prices being slightly lower than in Washington Heights.

How long are properties staying on the market in Inwood/Washington Heights, and how does that compare to a year ago?

If the unit is priced right, it stays on the market, right now, somewhere between 60 and 90 days. If it is not priced right, then it usually lingers and can go beyond six months. Comparing it to a year ago when the average was probably 120 to 150 days, it’s gotten better.

Are there new retail stores or restaurants that are helping to bring in more residential buyers to the area?

For a very long time, the stretch of Broadway in Washington Heights, north of 183rd Street going into the 190s, was pretty much a dead zone for commercial activity. The restaurant APT78 opened up there. The guy that owns 181 Cabrini opened up a place on Broadway at 190th or 191st. It’s a bar/restaurant that has 50 beers on tap. [So that formerly dead area] is becoming the cool trendy place to hang out. On Dyckman Street west of Broadway, there’s Mamasushi and Mamajuana, there’s Corcho, which is a wine bar. There is a lot happening on that strip. … Farther up in Inwood, the area north of 207th to 218th, that was also another dead area for commercial. Now there’s a lot of activity with restaurants, outdoor cafés and supermarkets.

Thomas Healy
Thomas Healy
vice president, Prudential Douglas Elliman

Which price ranges and unit types are performing best and worst in the area?

Two- and three-bedrooms are doing the best in both Inwood and Washington Heights up to about $700,000. One-bedrooms [are struggling most].

Are developers becoming more interested in the area?

It’s difficult for developers. I don’t sense a big push for development in Washington Heights and Inwood. I don’t know if there is a lot of land for them, frankly. When they think uptown, developers are focused on Harlem.

What kinds of discounts off asking prices are being seen these days in the area?

We’re seeing pretty significant discounts and negotiability. It’s not uncommon for us to see prices drop approximately 8 percent from their initial asking price with additional negotiation sometimes done to seal a deal.

How long are properties staying on the market in Inwood/Washington Heights?

On average, we’re seeing properties stay on the market for approximately six months. But there are a lot of properties that have been on the market for 258 or 360 days. They are just not priced to move. I think a better question is how long is a very well priced property on the market? If it’s priced to move, it can be [sold] in under three months.

What are the biggest challenges to selling residential property in the area today?

The biggest challenge is convincing buyers that these neighborhoods not only offer them good value, but have the amenities they expect.

Kelly Cole
Kelly Cole
senior vice president, Corcoran Group

What are you seeing when it comes to residential sales volume in the area?

Things are finally starting to trade, especially the larger units. We were in a stagnant market for the most part up here in Washington Heights and Inwood for the better part of 2010 and 2011 — unless something was priced really well or had special features.

What’s going on with residential prices the area?

In late 2011, especially in Washington Heights, we did see an increase in prices in some of the anchor buildings. For example, in the Audubon section of Washington Heights, we saw prices increase from 2010. In the River Arts, which is the building in the area that commands the highest price per square foot compared to the average price per square foot in Washington Heights, prices were $525 to $552 a square foot, compared to the average, which is about $441.

How negotiable are sellers when it comes to prices these days?

The one problem [with discounting] is that so many sellers that bought at the height of the market literally can’t negotiate beyond a certain point because they have to bring money to the closing table since prices have come down.

What are the most surprising trends you’re seeing in the market right now?

Buyers from downtown are coming up here in larger numbers because, after two to three years, they’re getting priced out of the product they want on the Upper West Side and other neighborhoods. One of the reasons things sat on the market for so long in the last two years was because buyers could get a one-bedroom for [as low as] $400,000 on the Upper West Side. Granted it was half the space and in a walk-up building with brick-wall views.

Who are the most active buyers in Inwood/Washington Heights right now?

We are still outperforming Brooklyn in terms of value, so many buyers that are looking at Brooklyn are realizing that in upper Manhattan they are getting more for their money. [Also], empty nesters [and] families that have dual commutes — one who works outside the city and one who works in midtown.

Rob Kleinbart
Rob Kleinbardt
principal broker, New Heights Realty

What’s going on with residential prices in Washington Heights/Inwood?

Residential prices were down in our area 15 percent and, in some cases, almost 20 percent from the peak. Now, prices are stabilizing.

What are the biggest challenges to selling residential property in Inwood/Washington Heights today?

In some ways the biggest challenges lately have been in dealing with lenders. Most of our sales are cooperatives. For years, the process from accepted offer to closing took two and a half to three months. Now it’s longer. [Also], with so few sales two years ago and even last year we have come up against appraisal problems in several cases. Often there are simply not enough good comps to justify — to the lender at least — the selling price of a unit. In some cases, this has forced sellers to renegotiate an accepted offer in order to get a deal done.

Noah Rosenblatt
Noah Rosenblatt
founder, UrbanDigs

What are you seeing when it comes to residential sales volume in Washington Heights/Inwood these days?

Deal volume in this area really started to pick up in early February and has continued the uptrend up to the present market. We show pending sales for the Washington Heights/Inwood area to be up 74 percent over the last year and 28 percent from two years ago. The recent surge is partially due to a downtrend in pending sales in this area over the second half of 2010. That slide in demand lasted until early May 2011.

What’s the inventory like in the area these days?

Right now we show 17 condos actively marketed for sale versus 141 co-ops for sale in the area.

Which price ranges and unit types are performing best right now in the area?

By far, new deal volume for co-ops is outpacing deals for condos. This is largely due to the fact that co-op inventory outnumbers condo inventory by a multiple of about nine right now.

  • Seaman Drake

    This article is 95% about Washington Heights and sheds very little light on Inwood. Missed opportunity to talk about one of Manhattan’s most under-reported neighborhoods.


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