A REAL estate mogul, when asked for his view on where investors should go shopping, gave a one-word reply – Harlem.
Before you react toxically, that tip came from no less than New York billionaire Donald Trump in a TV interview a fortnight ago.
He objected to the “location, location, location” mantra, saying bluntly that “dumb people can make a mess of a good location”.
“I have friends who bought property in Harlem and I think that’s a very smart move,” he said.
As they say, it’s gentrification at work. Harlem, better known as a rough neighbourhood in Manhattan, is going through an economic renaissance of sorts. Chain stores, for instance, are setting up shops in pockets of this area.
“The city planners know that this is a new frontier. They cleaned up the streets, put more policemen here and they react faster to crime now,” said real estate agent Royce T. Brown.
Official figures have shown that the crime rate has gone down in once notorious Harlem. Apparently, it is not any much worse compared to other American neighbourhoods these days.
“Look behind you,” Brown said, pointing to an Asian and a European crossing the road. “Five years ago, you wouldn't have seen such faces walking down the street here.”
Brown, who works for Harlem Homes Realty, is selling a 3,724 sq foot townhouse or what Americans call a brownstone for US$1.6mil. The three-storey building was priced at US$600,000 five years ago.
It is located on West 130th Street in this black neighbourhood known for its awesome gospel music.
(At the nearby Metropolitan Baptist Church, the guest preacher last Sunday broke into song twice during his sermon. The church’s choir members sang with such stirring voices that a visiting Dutch couple took snapshots of them.)
Several days ago, there was a report about a woman who bought a three-storey townhouse in west Harlem for US$250,000 under a subsidised City Hall housing programme six years ago. Drug dealing and prostitution were common near her home back then.
But it’s a different story today as the market price of her townhouse has leapt to US$1.4mil and the place has been relatively cleaned up.
As a comparison, Brown said such a price tag would get the buyer a mere one-bedroom apartment in downtown Manhattan.
The US housing market, however, has cooled down. The National Association of Realtors has announced that sales dipped by 4.1% in July. The pace had been the slowest since 2004.
In New York, more and more “for sale” signs are switching to “for rent”.
Even Brown conceded that the brownstone where he put up the “for sale” sign was originally priced at US$1.7mil, less than half the price a year ago. But he believed that the market was softening and not dipping drastically.
“The market isn’t falling. It’s making a correction,” he maintained.
The National Association of Realtors has acknowledged that sales have slowed down and that prices would fall temporarily to levels below that of 2005.
Even celebrities are hit by the downturn. Britney Spears had wanted to sell her four-level Nolita (North of Little Italy) apartment in Manhattan for US$5.5mil in 2004.
It was just recently that the pop princess managed to dispose of her property but at a lower price of US$4.45mil.
With prices in Manhattan skyrocketing still, it looks like investors will have to turn the page to Harlem.
(Sunday September 17, 2006)
