Robert Demeter The internet has been in a frenzy ever since Amazon let the cat out of the bag and officially announced its two new headquarters. The retail giant’s bold move split people into two camps, with arguments on both sides about whether Amazon’s descent on Long Island City and Arlington is actually good for the communities.
Both locals and experts weighed in on the situation, including RENTCafé, so we decided to have a go at it and do what we do best: talk about real estate and the impact of the Amazon effect on New York City’s residential market.
So how will the residential market in LIC, Queens, Brooklyn and NYC react? For starters, ever since word got out of a possible major Amazon office in Long Island City, real estate marketplace Point2 Homes noticed a huge spike in traffic. Views on their Long Island City listings page almost tripled, a 198% increase since November 12, as illustrated on the graph below.
Due to the heightened interest in homes, the rate at which property prices grow will accelerate in LIC, and more so in bordering neighborhoods that provide easy access to “Amazon Island City”. Astoria and Sunnyside are just two examples of neighborhoods where home prices will take off, while areas along metro line 7 will boom as well.
“Prices along various subway lines are going to rise by 25-40%. Neighborhoods that have been stable for generations are going to get gentrified and existing residents pushed out,” said Matthew Haines, real estate investor and founder of PropertyShark.
Check out the map below for more details and read on for the full breakdown. Keep in mind that neighborhood borders sometimes differ. We view Long Island City and Hunters Point as two separate areas. LIC extends up until Queensboro Bridge Lower Roadway, and everything south of the roadway is Hunters Point down to Newtown Creek.
In the Last 5 years, Median Home Prices Increased 35% in LIC
Even before Amazon docked on the shores of Long Island City, the neighborhood has been seeing growing interest and surging home prices. Through the years, it slowly transitioned from an industrial district to a gentrified residential area, securing a place among the most expensive neighborhoods in Queens.
In the last 5 years, median home sale prices increased 35%, reaching a peak of $435,000 in 2017. Year-to-date, the median sits at $350,000, a drop of about 20%.
In the near future, the neighborhood’s median home price will more than likely increase at a more accelerated rate, as well as drive demand.
Median Home Prices in Hunters Point to Reach $1M Soon
The same trend of accelerating price increases applies in neighboring areas as well. Hunters Point, Sunnyside and South Astoria will all see a surge in home prices, rents, and new developments. Median home prices in Hunters Point will reach $1 million in the near future. Currently the median is $875,000.
Sunnyside and South Astoria boast medians of $390,000 and $650,000, respectively.
Metro Line 7 and the Gentrification to Stable Neighborhoods
Apart from neighborhoods bordering Long Island City, other areas in Queens poised for growth are along major thoroughfares, metro lines and bus lines that provide direct access to LIC.
With most of Queens’ waterfront neighborhoods being upscale and pricey, neighborhoods further east in the borough are still considered somewhat affordable. Largely due to metro line 7—which provides direct access to Long Island City—gentrification will slowly spread to neighborhoods such as Jackson Heights, Elmhurst, Corona and Downtown Flushing. The same trend will also apply for Richmond Hill, Forest Hills and Rego Park situated along R, F and E metro lines, which all provide easy access to Amazon’s future base.
“Until now the 7 train and the communities surrounding its stations haven’t really seen the gentrification and increase in price that other lines like the N, E and F serving Queens or any of the lines serving Brooklyn, even if commutes into Manhattan were significantly longer on those lines. Suddenly the 7 train is going to be discovered. Prices are going to swing in the other direction, from relatively affordable (for NYC) to very high,” said Matthew Haines.
Brooklyn Will Also Feel Amazon’s Presence
Neighborhoods along the G line in Brooklyn will also see an increase in prices. Greenpoint, with a median home sale price that already surpasses $1.1 million, will continue the upward trend, and so will Williamsburg ($940,000), Bedford-Stuyvesant ($770,000) and Clinton Hill ($800,000).
For more details on some of the neighborhoods, check out the table below:
It’s still too early to be sure how much and at what rate will prices increase around Amazon’s HQ2. There is, however, room for speculation. One thing is for certain though: rising rents, home prices and living costs will lead a wave of gentrification and new developments.
Methodology:
The median sale prices were calculated based on residential property sales closed between January 1, 2018 and November 30, 2018. The residential properties included in the stats are single-family homes, condos and co-ops.
