Owners rejoice at rising property values; tenants, not so much
As tenants continue feeling the squeeze of ever-increasing rents in Mott Haven, Port Morris, and Melrose, many homeowners are facing a different dilemma: whether to cash in on the area’s growing cachet or hold out as their homes continue to soar in value.
Homeowners say they’re getting constant calls, emails and knocks on their doors from realtors around the city offering to buy them out.
The next Bushwick
“It’s the upcoming Bushwick,” said Mark Williams, sales manager at Queens-based Success Developers, adding that scores of Manhattan residents have recently inquired about moving to the area. His company bought a home on East 144th Street last December for $260,000 at a foreclosure auction, then flipped it two months later for $599,000, according to the real estate website Zillow.
But as the neighborhood buzzes from the breakneck pace of development and speculation, some homeowners say they’re not selling.
“They’re not going to pay what the house is worth,” said Eduardo Cruz, 35, who owns on East 144th Street between Brook and Willis avenues. “Soon anyone who owns property here is going to make a decent profit.”
For Cruz and many of his neighbors, owning a home is more than just an investment. He and others say they’ve stopped responding to the knocks on his door, no matter what the realtors are offering.
“I’ve been here forever. This is a family house,” said Gaby Ortiz, 50, who owns on East 139th Street. “We won’t sell this.”
140th Street homeowner Bell Adams, 45, says she has tried shooing the investors away, but they keep coming.
“I tell them it’s not happening, but they don’t listen,” said Adams.
“I’m not going anywhere,” said Robert Harris, 64, who owns a house on East 144th Street. “The property values are going up because of the new neighbors: white people.”
Historic homes, record prices
It’s no surprise that sales of Mott Haven’s historic homes are through the roof, said Bronx historian Lloyd Ultan.
“These are gorgeous houses,” said Ultan, pointing out that German immigrants who owned the local piano factories built most of them in the late 1800s.
Allison Jaffe, a realtor who has sold many homes around the South Bronx over the years and served on Community Board 2’s housing committee in Hunts Point, said that local homeowners are seeking record high returns on their homes, including one on landmarked Alexander Avenue now on the market for $1.7 million.
“They’re not going to get it,” Jaffe said. “Not right now. The South Bronx is still the place people go when they’ve been priced out of other places.”
That’s what Seth Tillett said happened to him and his wife, Nicole Rauscher. The two designers could no longer afford their home in Harlem, then moved to Mott Haven after realizing they couldn’t afford Brooklyn either.
“Mott Haven is the last affordable place for people to live,” Tillett said. “I don’t think you can buy a house anywhere else in New York City for $400,000.”
But others say they’re cashing in now, rather than wait for the market to go even higher. Frank Camal, 56, has lived in the same red brick house on East 140th Street his whole life. Though he knows it could bring in lots more money in the future, he says he needs the cash now to pay for his ill mother’s medical expenses. Like many other local homeowners recently, he’s found plenty of prospective buyers.
The sense of change is unmissable in Mott Haven, where the sounds of construction are a constant on streets that just a few years ago were usually dead quiet.
“A lot of faces have been disappearing,” said Jose Guzman, 20, who’s lived in the same house on East 144th street since he was born. “I have no idea where they’re going.”
Tenants who have long rented rooms and apartments are increasingly being told to pack up and leave as the houses they live in are sold. Flyers that say “Tired of being a landlord?” are circulating around the neighborhood.
Jose Torres moved here from Puerto Rico when he was seven. Now 65, he’s worried his landlord will give in to the incessant pressure to sell his house, where Torres pays $600 a month for a room.
“If I have to move out, I’ll probably move to a shelter,” said Torres. “All the poor people are moving out. These new buildings are pretty, but we can’t afford them.”
Pedro Robles, 73, pays $1,500 a month for a four-bedroom apartment on East 139th street, where he lives with his wife and three adult children.
“I can pay no higher than that,” Robles said. “I’ll stay until I die.”
On the Naked Apartments website, Mott Haven rentals that size are now listing at $2,600 a month and up.
Some longtime renters would like to buy but prices are well out of reach. Jiovanni Cruz, who rents a room in a house on East 140th Street, has lived in Mott Haven for almost 50 years. He said he’s been saving in the hopes of eventually buying the house he lives in. But when his landlady heard what her neighbors are selling for, she raised her asking price to $1.1 million.
“It’s a shame,” Cruz said. “People here don’t have that kind of money.”
An investor frenzy
Maryanne Haimovitch, a developer who works in Mott Haven, said competition among buyers is fierce.
“There’s hundreds of investors here, and we’re all surviving,” she said. “I think it’s great for the South Bronx. Investors are making the property values go up for people who’ve lived in the area for a long time.”
She and other investors are zeroing in on the area’s numerous foreclosures because those homeowners are the likeliest to want to sell, she said. Brokers say the high foreclosure rate is the result of home loans gone bad after a rash of predatory lending to local homeowners before the 2008 crash.
At a foreclosure auction at the Bronx County Courthouse on the Grand Concourse on a Monday afternoon in July, available homes in Mott Haven sparked frenzied discussions between frantic investors. “Wait,” the auctioneer pleaded over competing shouts of price offerings. “I can’t write that fast.” In contrast, foreclosed properties from other Bronx neighborhoods drew little interest.
A house at 405 East 152nd Street sold for $720,000, after an initial offer of just $450,000. That 62.5 percent price spike took all of five minutes.
“We both were overpaying for it,” one investor admitted, then added that he stopped bidding when the house reached $710,000. “We wouldn’t sell it for much more than that. But a lot is happening in that area.” Even so, he said, “The neighborhood still has a ways to go. There are a lot of Section-8 tenants.”