Thanks in part to news of Amazon's HQ2, New York buyers are benefiting from a buyer’s market, with plentiful housing supply options.
Recent news regarding Amazon’s headquarters has put New York City back on the map for some real estate investors.
HQ2’s new home will be located in Long Island City, across the East River, within New York City’s neighborhood of Queens. Just 10 minutes from the Upper East Side via one of eight subway lines, LI City is on the western edge of Long Island – so waterfront parks in the area feature views of the Manhattan skyline.
The city was first formed in 1870 as its own city, then folded into the city of New York in 1898. Today, the area is known for waterfront parks, restaurants, bars, higher education and a diverse community. It’s place for the arts, tech and industry.
HQ2 could bring more than 25,000 employees looking for a high-quality place to live to the neighborhood starting in 2019. After all, Amazon says it will lease 4 million square feet of “energy-efficient office space,” but may expand to 8 million square feet.
Already, the company has agreed to lease a million square feet in the Long Island’s tallest building, the 658-foot-tall One Court Square, formerly known as the Citigroup Building; Citicorp is in the process of vacating the building.
And where real estate is concerned, some say now is the time to buy. As in Seattle, New York buyers are benefiting from a buyer’s market, with plentiful housing supply options. Discounts of 7 percent to 15 percent off a new-construction condo’s asking price are even available, says Jarrod Randolph, a licensed real estate broker and co-leader of Gotham Advisory Team, a group of New York-based real estate experts.
“Amazon employees have an opportunity to purchase ahead of their needs, and even lease properties out to generate income,” says Kevin Geloso, fellow co-leader of Gotham Advisory Team. After all, rental management services can run an investment condo, dealing with everything from managing the security deposit to emergency repairs, acting as a liaison between the condo, owner, renter and management.
Queens has long been known as a working-class borough, but investors have recently taken an interest in the area, due to a lack of buildable space in Manhattan and Brooklyn.
Eight new properties have been developed in the past few years, adding several thousand units to the rental and ownership mix. Yet, Queens has remained less expensive than Manhattan or Brooklyn. “New construction is at a 20 percent discount from what you’re paying to live in Manhattan,” Geloso says.
However, Long Island City prices have been rising, since the announcement. Currently, the median condo price in Long Island City is $769,000, and the median apartment rent is $2,450/month. However, more housing stock is coming online, or on the way, with more new apartments added than any other neighborhood in the area, since 2010.
“What’s great about Queens is the mix of higher-end retail, salons, dry cleaners, grocery stores,” Geloso says. “All the services that are essential, that you might need are in the neighborhood.”
New York City real estate makes sense in general, though – if you think like an investor, Randolph says. New York’s housing market is a good place to buy, and invest through holding property– whether living in your condo or renting it out. While price fluctuations may happen at times, rental supply often can’t meet demand – and New York City will grow by an additional million people by 2030, he says.
Randolph and Geloso primarily work with new construction, which appeals to buyers and renters alike — condos are on the rental market for only an average of 30-45 days, Geloso says. “The finishes are much nicer,” he says, and high-quality photos help boost appeal for renters.
New construction rents out faster than older buildings, but overall the city’s vacancy rate is currently around 3.6 percent, according to recent statistics – with 63 percent of New York’s total housing stock made up of rental apartments.
Amenities in newer condos might include a roof deck, fitness center, pool, business lounge, pet spa, or a “tween room” with gaming systems. “Developers have upped their game in terms of what they’re offering,” Randolph says. Some buildings even offer co-working spaces with free Wi-Fi, and continental breakfast and lunch.
However, some may prefer to look elsewhere for a condo investment, such as Brooklyn or Manhattan. “Manhattan will always sell at a higher price per square foot,” Geloso says, due to demand.
The busiest real estate market is spring, he says – most buyers and renters are out home-hunting. But home buying isn’t as cyclical as it used to be, Randolph says. Wall Street employees used to be able to count on year-end bonuses, but now “the market has vastly changed,” and there’s more diversity in terms of industry and its resulting impact on real estate.
If a Seattle-area resident is hoping to relocate and buy, Randolph suggests renting for a year, and exploring potential neighborhoods to find a good fit. But if it’s been a few years since your last visit, you may be pleasantly surprised. “It takes a while to educate yourself about the New York City market,” he says. Places like Brooklyn and Queens have changed dramatically. “Now the world is your oyster,” Randolph says. “You can live anywhere in the city and be happy, with access to great restaurants, nightlife and essentials.”
Compass Real Estate’s Gotham Advisory Team offers a talented roster of New York City real estate professionals with an impressive skill set, ensuring that every client is impeccably served and every detail is meticulously handled.