uploading error with custom theme

I created a custom theme. Added a custom post type in functions.php which will allow users to upload multiple featured images to headers.php for my theme. My theme also contains an images directory wherein I want the uploaded images to go. Right now when I go to add a new header image, and click set featured image, and try to upload an image, I get this error:

Unable to create directory /Users/johnmerlino/Documents/github/cms/wp-content/uploads/2012/06. Is its parent directory writable by the server?

It doesn’t seem to be uploading to right place.