Our Expanding City and Property Values
New York City is the largest city in the United States. Over eight and a half million people live here, and even more visit daily for work or play. New York City property values are affected by more differentiators than almost anywhere in the world. Over the past decade, our city’s outer-boroughs have grown in value and demand at a record-setting pace. However, some areas have tripled in value while others have remained relatively unchanged (I’m looking at you, Red Hook), and we should understand why.
Transportation is one of the greatest impacting factors across NYC. With most people commuting to work in Manhattan, outer borough neighborhoods with faster transportation options are experiencing growth and sustainable values. One of the first questions buyers have when seeing a property is, “Where is the nearest subway?” It’s not just having a nearby subway though, but which subway and how many. Being “sort of near” one sluggish train line isn’t going to push a property to the top of the list.
Brooklyn and Queens are now facing the shutdown of one of the busiest traveled outer-borough subway lines (the L train). Although the shutdown is scheduled for 18 months, many believe it will go on longer with the ongoing challenges of the MTA. We have already seen the effects of this in the rental market, as prices in affected neighborhoods have dropped. While we haven’t seen the mass exodus of owners like some predicted, buyers are reconsidering their search locations, turning away from areas like Williamsburg in favor of areas with more transportation options - like Flatbush - which were not as in demand before.
Another big factor on property values is retail amenities. This month, Amazon announced their move to Long Island City and the potential of 25,000 new jobs. This could translate into as many as 200,000 new workers in the area once you consider piggybacking companies and vendors looking to service Amazon and the new retail sure to pop up. Many will want to live close to their offices in Long Island City, which would mean a major boost in demand over the next five to ten years in greater Queens and Brooklyn as well as Long Island City and surrounding areas.
But not all news is positive. Train service has been declining and stalled projects like the Brooklyn-Queens Connector are seemingly decades out. East New York saw major rezoning a few years ago and developers purchased residential building opportunities, but we have seen little growth due to the commute to Manhattan; The train line is slow and has many stops. Red Hook is one of the most unique areas in NYC, but without a dedicated train line or other efficient option, it’s difficult to live there as a commuter. Unfortunately, Red Hook isn’t alone. From Sunset Park and Industry City to the Navy Yards all the way up the waterfront to Greenpoint, transportation will continue to be a key topic and challenge to improve quality of life which will, in turn, increase property values.