An elegant, landmark brownstone on West 123rd Street could set a new standard in Harlem real estate. The 10-room, seven-bathroom townhouse went on the market in August for $2.9 million, later reduced to $2.5 million. Even at the lower figure, agents said the price would surpass previous sales for brownstones in the neighborhood.
At a recent open house, neighbors in Mount Morris Park came to see what $2.5 million now buys in Harlem. After seeing the home, one neighbor doubted it would sell for that much but said “anything’s possible.”
In Harlem residential real estate these days, that’s the question what’s possible and what’s hype. Several agents and landlords said home sales remain at pace with the overall market, but rents are dropping for high-end apartments.
“My feeling is that it is not like it looks,” said one agent for a Harlem real estate company who declined to be identified by name. “The prices people are talking about, they are really inflated about 30 percent.”
Brokers and owners reported rents dropping ten, 25 percent or more to get tenants. These reductions could be because landlords downtown are peeling off tenants with bargains at the same time as an infusion of new units to Harlem.
“I definitely saw a softening of the market,” said Karen Phillips, who dropped rents 25 percent on three units in her Harlem brownstone to get tenants. Phillips is a member of the New York City Planning Commission and a founder and former head of the Abyssinian Development Corporation in Harlem.
“It was distinct. I moved here in November,” Phillips said of her renovated brownstone. “The real frenzy has slowed. The market is slower, and there is a real over-saturation.”
Agents and landlords say the range for rents can be wide given Harlem’s size and housing stock. One-bedroom, floor-through apartments can rent for between $1,300 and $1,800, and two-bedrooms can go for between $1,800 and $2,400. For home sales, top-of-the-line “20-foot-wide” brownstones sell for between $1.2 million and $1.5 million, agents said. Narrower brownstones without details generally sell for under a million dollars.
“One of the reasons that Harlem has a lot of hype is because you can still get a lot more for your money,” said Vie Wilson, a vice president at The Corcoran Group who specializes in Harlem.
Wilson deals mostly in home sales, and now she s got 10, two-bedroom condominiums in the Sugar Hill section on the market. Prices range from $339,000 to $489,000, which Wilson said would easily double if the condos were on the Upper West Side. Interest in the condos is heavy.
Five years ago, when Wilson started work in Harlem, she couldn’t get people to home shop there. “Not the case anymore,” Wilson said, noting the revived shopping along 125th Street that is helping to pull people uptown. “It has changed as a result of retail and as a result of people buying.”
Still, Wilson and others say Harlem is in the process of gentrification and not yet gentrified, which serves as a check on prices. Some blocks are tree-lined with wide, stately brownstones while others are spotted with abandoned buildings awaiting renovation. Well-preserved, historic areas — Mount Morris Park, Striver s Row and Hamilton Heights have bustling real estate sales, but other areas aren t as busy.
“I think you have some people who think they want to live in Harlem, but they don t understand that you have to live with people in Harlem,” said Amanda Jhones, an agent for Douglas Elliman. Jhones declined to say whether racial prejudice kept them out.
Jhones is the agent for the 123rd Street brownstone selling for $2.5 million, and she s confident she’ll break a Harlem sales record with it. For Manhattan, a “20 footer” with a hot tub in the cellar, an elevator, garden apartment, and 5,000 square feet selling for $2.5 million is a deal, she said.
“If it were anywhere else, I could put a $7 million price tag and nobody would flinch,” Jhones said. “But what I’m getting is, ‘Oh, it s Harlem.’ But what s wrong with Harlem?”
Even with a drop now, Harlem real estate is a world apart from 15 years ago when devastation gripped the neighborhood. The 123rd Street brownstone, for example, was a caved-in shell in the mid-1980s before its current owner, Fred Eastmond, got it through a city housing lottery and painstakingly restored it.
Phillips, who helped lead the comeback through Abyssinian Development Corp., said the idea for Harlem was to get economic variety and build a housing market where one didn t exist. The strategy worked, but the market might have moved faster than expected, she said, in part because of an illegal flipping scheme in the late 1990s that artificially inflated neighborhood sales prices. Now the debate is how to keep more middle-class residents in Harlem instead of how to attract high-income families.
While the dropping rents may offer bargains to apartment hunters, they could pose a problem for new brownstone owners looking to pay a mortgage with rentals, one agent said. With average renovation costs running at $100,000 a floor, it s not hard to end up with a million-dollar mortgage.
Still, families are still looking to Harlem as a place for reasonable prices in Manhattan. Ray and Clara Santos went to the open house at the 123rd Street brownstone recently, although just to look.
“Too expensive,” Clara Santos, 33, said as she left. They want a Harlem brownstone for the family, which includes two kids, for between $700,000 and $1 million, and they re confident they ll find one in that range.
The family now lives on 106th Street and Broadway, but can’t afford anything in that area. “I really want a brownstone,” Clara Santos said. “I couldn’t afford one anyplace else.”