Until recently, brokers touted Crown Heights, located east of Prospect Heights, as an up-and-coming neighborhood that offered an alternative to pricier parts of Brownstone Brooklyn.
But now the question is whether listings there are actually luring buyers. The real estate blog Brownstoner.com, for instance, recently called attention to a slew of price reductions in the neighborhood.
“I have a listing on Pacific Street where we just decreased the price to $1.29 million from $1.49 million. It was overpriced; we weren’t getting phone calls on it,” says Jim Winters, an associate broker at Brooklyn Properties. “It’s a lot of money to pay for a place that’s gentrifying.”
Buyers looking for single- or two-family houses in Brooklyn have been turning to neighborhoods like Crown Heights only after they’ve looked into neighborhoods like Fort Greene, Park Slope and Cobble Hill and found that brownstones there go for $1 million-plus. What Crown Heights has to offer, in contrast, is value.
“You can get a fine house there for less money, under a million, a four-story or three-story,” says Roslyn Huebener of Aguayo & Huebener Realty Group.
But when prices inch up, value disappears, and suddenly there’s no draw — which can lead to a seller-induced slowing of the market.
Huebener explains: “People who are selling [now] saw their neighbors’ houses sell, maybe they came on last February, for a high price. Plus if [the house] closes for $900,000, rumors will push it up to $950,000. So they hear that the neighbor’s house closes at a certain price, they believe that theirs is the same or better, despite the market.” So they price high and no one bites, “which contributes to the slowing,” she says.
Kevin McNeill, a senior vice president at Corcoran, is all too familiar with this phenomenon. He points to a three-story townhouse he helped put on the market for $1.2 million back in June.
“It was overpriced, but her next-door neighbor had listed at $1.4 million,” says McNeill. “Hers was similar [to her neighbor’s], and when she saw $1.4 million it was hard to talk her off the ledge.”
For two months the home languished. Then in August the seller agreed to drop the price by about $100,000, but still it sat. It wasn’t until McNeill convinced her to lower the price below $1 million that the house sold.
“The minute we brought it to $995,000, we sold it within days,” says McNeill. “We closed at $960,000. When people talk about price reductions in these neighborhoods, it’s not about the market, it’s about improper pricing.”
“The challenge here is trying to get sellers to be realistic,” he continues. “Sellers [in Crown Heights] are not as savvy, like in Park Slope where everyone knows what everything is worth… The sellers tend to be elderly, not in the banking and finance fields — they don’t follow real estate.”
So what will the market bear?
“Pushing the limit is $900,000 for a three-family, top-end limestone brownstone that’s been renovated. Lower-end would be $650,000, and most are selling for $750,000 or $800,000,” says Winters. Recent sales and listing data on PropertyShark.com confirm this.
But while homes will sell for the “right” price, condos are having a harder time.
“There are some condo developments [in Crown Heights], but those sales are not going to be brisk unless the prices come down,” says Huebener. “There [is enough stock] in Prospect Heights and Fort Greene and Clinton Hill. If they find something in the South Slope that’s on par or close in price, [buyers are] going to go for those.”
She estimates that condos in Crown Heights will need to be priced at least $50,000 to $100,000 lower than in neighborhoods that have already gentrified.
At 1296 Dean Street, five units in a back-to-the-walls renovation came on the market in May. The first-floor apartment and the roof apartment, both of which have large gardens, have already sold for just under asking. The middle floors’ three apartments, which range between 766 and 1,002 square feet and $425,000 and $475,000, have not.
What the neighborhood needs, of course, are services one doesn’t have to take a train to get to.
Helping that cause is the newly formed Crown Heights Revitalization Movement, a community group led by residents in Crown Heights North. The group’s long-term goals include revitalizing retail: “Key business districts and improvements need to be made, improving safety and infrastructure. We want to get funding for a BID on Nostrand Avenue. How do we get potholes repaired more quickly? Sewers that don’t flood?” asks Rachel Pratt, who moved to Crown Heights three years ago from Astoria and is heading up the group. Its first order of business is getting a moratorium on social service beds: There are more supportive housing projects (subsidized living, special needs, etc.) per acre in Crown Heights’ Community Board 8 than in any other community board in the city.
“The biggest facility is the Bedford Avenue Armory. It has a homeless men’s shelter, but there are no services at all provided, no day programs or job programs,” says Pratt. “We’re advocating for social services. Let’s take care of the people we have in this neighborhood.”
On the positive side, community groups are encouraged by the neighborhood’s new landmark designation, which studies have shown helps neighborhoods preserve value.
Earlier this year, the Landmarks Preservation Commission designated 472 buildings in North Crown Heights as historic. The homes, built from the 1860s up to the 1930s, were chosen for their variable architecture — Romanesque Revival, Queen Anne, Georgian, Renaissance Revival — and their “intactness.” The designation was a boon for an area that has been thought of only as a no man’s land and was the site of the 1991 riot between the Caribbean and Jewish populations that reside there.
“Historic district status provides stability for neighborhoods,” says Lisi de Bourbon, spokesperson for the Landmarks Preservation Commission. “There is a slight increase in value over the homes that aren’t landmarked, say by a couple of percentage points. It’s slight, but it’s an increase nonetheless,” she says.
“Every time they’re landmarked it boosts the property value,” says Gregory Todd, a Corcoran broker who lives and works in Crown Heights. “We now have properties listed much higher than we ever had before.”
“In these neighborhoods, [when they] grow, something catches fire and it just sticks,” says Winters, who bought an investment property in the area in 2004. He’s just renovated and moved into it with his wife. “Or nothing could happen, and real estate could tank and that would be the end of Crown Heights. It is a neighborhood on the fringe.”