The Real Deal: A Dose of Reality for Crown Heights Market

Citing some of the discussions on this blog, real estate mag The Real Deal puts the Crown Heights market in its place this month with an article entitled, “Sellers Swallowing Their Pride in Crown Heights.” While not dismissing the nabe’s merits, the basic thesis is that the market got ahead of itself and there’re are lots of homeowners with a deluded sense of what their places are worth. (Yesterday’s HOTD is further proof of that phenomenon.) Several brokers are surprisingly frank about clients who insisted on slapping ridiculous prices on their houses, only to have them languish on the market. Here’s a great anecdote:

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.”

The implicit conclusion of the article, which we’d agree with, seems to be that in the new, post-subprime paradigm, $1 million is a huge psychological barrier in Crown Heights, as it is for most of Bed Stuy. But as Corcoran’s McNeill says, “When people talk about price reductions in these neighborhoods, it’s not about the market, it’s about improper pricing.”
Sellers Swallowing Their Pride in Crown Heights [The Real Deal]
Photo by gkjarvis