Washington Heights wins by waiting

<span style="font-style: italic;">While sales are down, pricing in Upper Manhattan nabe holds steady</span>

It may have Manhattan’s highest natural point (265 feet, in Bennett Park), but Washington Heights did not see the steep peaks in activity and prices that so many Manhattan neighborhoods experienced in the past few years.

As a result, the neighborhood — which stretches from the Hudson to the East rivers and from 155th to Dyckman streets — has avoided the complete and utter cratering that many other Manhattan neighborhoods have seen in the last couple months.

This month, as part of a monthly feature looking at what kinds of deals are closing in different neighborhoods, The Real Deal found that Washington Heights saw a 76 percent drop in closings in the past year. While that may seem steep, pricing held up far better than other, more upscale areas.

In July (the most recent month for which data were available) there were 11 sales, with an average price of $443,181, according to data provided by StreetEasy, the real estate Web site, and verified through the city’s Department of Finance. While the number of closings may not be completely inclusive (there’s sometimes a lag between when closings occur and when they’re reported), brokers say the figures seem within the range they’re seeing.

The sales that did close ranged from $275,000 — for a one-bedroom co-op at 330 Haven Avenue next to an off-ramp for the George Washington Bridge — to $725,000, for a two-bedroom co-op at 120 Cabrini Boulevard in the lushly landscaped, five-tower Castle Village complex. The data excludes sales of entire buildings, as well as sales of partial units, like annexed storage rooms.

In comparison, in July 2008, there were 45 sales, for an average of $408,464. That month, prices ranged from $176,400 (for a studio at 4523 Broadway, a red-brick co-op on a busy street), to $875,000, for a two-bedroom at 720 Fort Washington Avenue, a multi-building co-op complex located steps from Fort Tryon Park.

The sharp decline in activity in Washington Heights, which sweeps across much of Manhattan’s northern panhandle, including the micro-neighborhoods Fort George and Hudson Heights, is notable, brokers agree.

But, they say, it’s largely in line with the rest of Manhattan, which saw a 60 percent decrease in sales in the second quarter of 2009 versus the year-ago period, according to data from the Corcoran Group.

Indeed, considering that Gramercy, a far more upscale neighborhood, saw an 81 percent fall in residential apartment transactions this year, and that Tribeca experienced a stunning 92 percent drop (which The Real Deal reported on in its July and August issues), Washington Heights’s plunge is actually not that bad, brokers say.

In addition, prices appear to have held their own. While most brokers dismissed the $35,000 jump in average prices as statistically insignificant, they did point out that in general prices have not tumbled in Washington Heights as they have in the rest of the borough.

To wit: Corcoran found that the median price in Manhattan in the second quarter was down 13 percent from the year before.

“Washington Heights is still a value neighborhood,” said Sandy Edry, a broker with Citi Habitats, who closed several of the July deals in the area. “When folks need to move, when they need bigger places, they look in neighborhoods like this, where they get more bang for their buck.”

He cited a couple who had been living in the East Village and bought a condo for $350,000 he was marketing at 807 Riverside Drive, a six-story, 56-unit former rental building at West 157th Street. Edry, who also lives in the neighborhood, said the couple wanted more legroom without an Upper West Side price tag.

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He said in some neighborhoods, sales have been stymied because of the reluctance of banks to issue “jumbo” mortgages — those valued over $729,750 — that aren’t eligible for purchase by the government. That hasn’t been such a sticking point in Washington Heights, where few deals close over that amount.

Still, banks continue to be stingy with loans for condos, which typically have looser purchase standards than co-ops, said Edry, who also sold condos at 801 and 835 Riverside Drive, priced at $515,000 and $480,000, respectively, in July.

Starting this spring, many banks began demanding a down payment of 20 percent of the purchase price, as opposed to the more traditional 10 percent. Some buyers couldn’t cover the difference, Edry said.

Unlike in many other Manhattan neighborhoods, what’s missing in Washington Heights are expensive new luxury condos.

That absence is part of the reason prices didn’t escalate as rapidly as they did elsewhere during the boom, said Perry Payne, a broker with Prudential Douglas Elliman and longtime resident of the area.

And though the sellers may be more realistic these days, the price stability the neighborhood has seen seems borne out by two deals Payne closed in July. A one-bedroom co-op at 736 West 186th Street, an Art Deco building, sold for $295,000 four weeks after being listed for $299,000, she said. Also, a two-bedroom at 880 West 181st Street, an arts-and-crafts co-op, sold for $400,000 after five weeks; it was originally listed for $420,000.

“We are pretty solid,” she said.

But even the most desirable buildings haven’t been immune to price drops and other hurdles.

Among the more sought after are the Riviera at 790 Riverside; the Grinnell at 800 Riverside; and River Arts at 159-34 Riverside Drive West.

Others include 350 Cabrini Boulevard, with 76 units on six floors, which saw two sales in July: a one-bedroom for $285,000 and a two-bedroom for $515,000.

Kelly Cole, a Corcoran broker, said a three-bedroom in the Riviera, which sold in July for $685,000, had to be discounted three times before closing; it first listed for $800,000 in November. In December, a comparable unit in the building, which has 202 apartments, sold for $800,000, Cole added.

Even at the market’s height, though, most buyers find prices at half of those on the Upper West Side, where many begin looking. The difference is partly because parts of the neighborhood remain gritty without some services much of Manhattan takes for granted, Cole said.

“[Washington Heights] is not for somebody who needs a Starbucks and five restaurants on every corner,” said Cole, who lives in River Arts. “But the neighborhood hasn’t been artificially inflated. There’s been a natural, steady progression.”

Tallying Closed Deals in Washington Heights