Forest Hills and Central Queens Newsletter...Forest Hills and Central Queens Newsletter The Outlook for New York City Real Estate 2019 2018 is over and what a turning point it may

Forest Hills and Central Queens Newsletter

Prepared by Bruce Eaton

February 2019

The act of buying or selling a home is one of the

largest financial decisions a person can make. This is

why it is so important to choose the right company

for the task. At Skyward Steel we pride ourselves on

delivering top-notch service, getting you the best

possible price for your home, and making the process

as seamless as possible.

Our goal is to exceed all of your expectations.

My contact info:

[email protected]

917-572-3751


mailto:[email protected]

A long time ago at West Hills Elementary School in Knoxville, TN, we had a teacher, his

name I can’t remember now, who talked to us about the various properties he owned. He

gladly owed a ton of money but it was all working for him and he was on track retire early

and live well. I never forgot about the opportunity that real estate can be.

Since then, I have had an interest in architecture and community/culture and have always

checked out the real estate locally and where ever my wife and I travel. We have been to

hundreds of open houses and she knows the price of every home in the neighborhood. So,

it seems like the next logical step for me to get involved in real estate, and I recently got my

NY State real estate salesperson license and have started work at Skyward Steel Real Estate.

And thanks for taking the time to read this newsletter. Please let me know if you have any input at all.

In putting this newsletter together, I tried to think about what exactly would people want to hear about, and I

would like for it to be of value and of interest to the readers.


In this Issue:

• 2019 Outlook for Real Estate in

New York City

• Why Did Amazon Choose Long

Island City?

• Living in Long Island City

• They Paid How Much for That

House?

• Some Area Listings



The Outlook for New York City

Real Estate 2019

2018 is over and what a turning point it may

have been for real estate in New York. While

the volume is relatively high, as are the

values, there was a definite downturn in most

of the city, dramatic in some areas, while only

a few areas continued to rise in price. Or as

Corcoran CEO Pamela Liebman phrased it in a

NYTimes article, “Sales are not slow—they are

just not unusually high. It’s like we came off

the autobahn: It feels slow relative to the last

three or four years, but historically it’s not.”

So after several years of strong growth, it is

perhaps natural and a slowdown is needed.

Chart from Miller Sammuel, Inc. to the right

shows the slowing that started in late 2017.


The Outlook for New York City Real Estate 2019

A quick look at some 2018 statistics:

• In his Q3 Market Report, Frederick Peters, CEO of Warburg Realty, reported that “Offers 20% and 25% below asking prices

began to flow in, a phenomenon last seen in 2009.” The report goes on to say that “Our agents struck these deals at

prices anywhere between 7% and 12% below equivalent sales from a year before”.

• Upper East Side townhome sales dropped 48% in the second half of 2018, as did the prices, as per a report by Stribling

and Associates.

• NBC New York reported that Manhattan real estate sales “fell by 11% from the 3rd quarter of 2017 to the third quarter of

2018”.

• The average Manhattan apartment price dropped almost 5% from 2017, to $2.06m from $2.16m, according to a market

report by CityRealty.

• But, according to Douglas Elliman and Miller Samuel, Manhattan home sale prices dropped even more, down 14% to the

year prior and the largest drop since 2009.

o In Q4 2018, median price for an apartment dropped below $1m for the first time since 2015.

o Q4 was also the fifth-straight quarterly drop in the number of sales.



What can we expect for 2019? Anyone who says that the know for sure

will almost certainly be proved wrong at some point. There are a whole

host of issues in play, some negative and some positive for sales. Here

are some of them:

• 2017 tax law change comes home to roost. NY (and all nationwide)

homeowners will find that their home mortgage deduction has been

capped at $10k when they do their taxes. A new mortgage of $500k

will include more than $10k of interest in the early years of the loan,

and the median price in NYC is almost $1,000k, many could pay more

despite lower tax rate.

• Interest rates are rising, if slowly, and are shrinking the amount home

hunters are able to finance when buying a home.

• Supply continues to grow—Current construction of multi-family units

is up 70% over a year ago; a total 32,580 multi-family units filed with

the DOB in the last 365 days. And the year before was significantly up

from the year prior.

A look at interest rates over the last 15 years.



What can we expect for 2019? Here are more concerns:

• The economy is cooling down; by how much depends on who you ask. The Federal Reserve projects 2.3% growth vs. 3.0%

in 2018 for a variety of reasons; including uncertainty caused by trade issues and world-wide slowdown of real estate

sales.

• Chinese investment in NY real estate has dropped off significantly, due to new restrictions their government has adopted

on capital outflow.

• Total international share of Manhattan residential sales dropped to 20% in 2018, down from a high of nearly 40%.

GDP Growth Projected

to Slow in 2019



• On the plus side, Amazon’s selection of LIC as half of HQ2 may

add up to 25,000 jobs in NYC over 10 years; and Google is also

increasing their headcount in NYC by as much as 9,000.

• The biggest beneficiaries are projected to be LIC, Astoria

and the communities in Queens with easy subway access

to LIC, as per PropertyShark. Those communities include

Jackson Heights, Elmhurst, Corona, Flushing, Richmond

Hill, Forest Hills and Rego Park.

• Perhaps as a refuge from high Manhattan prices, Queens

home prices are actually still rising according to Steven James,

CEO of Douglas Elliman. Median sale price was up 1.6% and

several price per foot records were set in 2018.

• Rising interest rates may actually jump start some home

buyers, who decided to buy before rates go any higher as they

are still fairly low historically.



On the Plus Side:

• NY and National unemployment rates are at or near all-

time lows and show no signs of increasing.

• A switch from a Seller’s to a Buyer’s market historically

has pulled some buyers into market as prices stall or drop.

• According to Stephen Jen, CEO of his own hedge

fund, “. . . Since property prices had gone too high,

the incipient price correction – assuming it is modest

and gentle – may perversely lead to an increase in

consumption”.

• Prices in NY real estate have risen 35% or more since 2009

( per CityRealty ) and anyone who bought a home prior to

2009 has had dramatic gains that could be captured by

selling at current levels.

• Sellers may accept that they aren’t able to get what they

hoped as their property sits unsold.



Summing up all of these different data points

isn’t easy, which has been described as a

“Lessen in Fluidity. . .” by CEO World Magazine.

But I will try.

First of all, the news is much better in Queens

per several of the points above. Queens is

perhaps the best borough of the 5 to invest in

real estate now, with a strong combination of

growth and easy Manhattan access.

If you bought 5 or more years ago, you really

could sell for a significant profit but perhaps not

as much as you hoped for. Would you turn

down a 35% profit in less than 10 years?

Probably not.

If you want to buy, you have to understand that you may not see the

quick appreciation we have seen the last several years, but you can

still make a sound investment as long as your realtor and you do your

homework and pay the appropriate price. No steep drop is being

predicted and desirable real estate rebounds over time, if it ever

drops. If you want to buy and sell quickly for a profit, this likely isn’t

the best time unless you can find a property that is significantly

underpriced now.

There are also always some local issues that can drive prices up

despite national or metropolitan headwinds, such as the Amazon

move, Opportunity Zones in the tax code, places with limited

inventories, etc, etc.

Your local realtor (that’s me!) can help you find those opportunities in

this time of change and flux.

Next:

• Why Did Amazon Choose Long

Island City?



House?




Amazon’s Decision to land

HQ2 in Long Island City—why?

So why did Amazon choose LIC for

half of its HQ2? Why not

Manhattan or Brooklyn, rather

than an area than only recently has

risen up from being a storage

facility for NYC and manufacturing

center? It is precisely because of

that recent rise, with its massive

wave of new apartments that

made it an attractive choice.

A view of the concentration of high rises in LIC.


Since Amazon announced in last November that half of their HQ2 would be

located in Long Island City, there has been both non-stop speculation about

who would benefit while prices on condos were already being affected.

Perhaps a bit of puffery, but some real estate agents reported that people

bought LIC condos sight unseen via text.

Before the announcement, it was clear that there were already a ton of

luxury apartments and condos in LIC and that it was perhaps over-built

based on the sheer amount of new properties that have created in the past

several years. LIC added more new apartments than any neighborhood in

the country between 2010 and 2016, over 12,500 units, as reported by

Curbed (June 26, 2017). Downtown Brooklyn added 3,851 and the Upper

West added 3,536 during the same time period.

Amazon’s Decision to land HQ2 in Long Island City; why?

And it didn’t stop there. In 2017, 2,500 units more units were added, almost 10% of the total for all of NYC, as per the LIC Post. Another

6,200 hit in 2018 for a total of nearly 22,000 since 2010, as per LIC Post. There is also 7,000 apartments currently under construction. So

there is a ton of inventory, in brand new, modern buildings to compete with Manhattan for the affluent professional market.


If Amazon does reach their goal of bringing 25,000

new jobs to LIC over a period of 10 years, not even

the massive recent build up can house them all.

Where are they all going to live? Some of the current

expectations is that anywhere convenient to a subway

line that reaches LIC will see incoming residents,

driving up prices and then supply.

According to Newsday, that would include a “ripple”

effect all along the E,F,M,7 and G lines. Streeteasy

suggests that Greenpoint, Sunnyside and Astoria will

see a big impact. Robert Demeter of PropertyShark,

as quoted in a New York Business Journal article in

November sees those same communities plus Hunters

Point, Jackson Heights, Elmhurst, Corona, downtown

Flushing, Richmond Hill, Forest Hills and Rego Park to

all see Amazon employees arrive and rising prices.


Queens Subway Map, with multiple lines passing thru LIC.


That glut of apartments apparently was part of the reason

LIC was selected; as per an article in CoStar in January of this

year. Said Eddie Son, a senior market analyst for CoStar for

the NY area, “It’s true there’s been a massive amount of

residential development in Long Island City, unprecedented.

And the transportation is great there – eight subway lines.”

In the actual proposal to Amazon, the NY Economic

Development Corporation actually highlighted housing as

strength for NYC, the area being cheaper than some of the

other cities that don’t have such a large supply of housing.

Just think of the big issues with housing now in San Francisco

and Seattle (affordable housing 1 hour+ away) and you can

see why the recent glut of apartments could have been

appealing to Amazon. In this case, it was built in LIC, and

they came (luckily?).


Several of the many new apartment buildings in LIC.


It’s pretty safe to say that all of those neighborhoods will all be affected to some degree. As more employees are hired

and vacancy rates drop close by Amazon, the newly minted Amazon employees will be pushed further out.

With all of that said, the ultimate impact may be that Queens avoids the slowdown that has already begun in Manhattan

and prices stay stable and/or rise slightly.


Nighttime view

of LIC from

Manhattan

Next:



House?




Living in Long Island City

If you haven’t seen LIC in the last few years, you really haven’t seen it.

More apartments have been built in the last 10 years than any other

community in the entire US, more than 22,000 with 8,000 under

construction now. And the focus has not been on affordable

apartments, it has been on the high-end of the market. Developers

like Rockrose and its sister organization TF Cornerstone or other

groups including Silvercup Properties, Brause Realty, World Wide

Group, Lightstone and the Stahl Organization.

Many billions have been spent in LIC recently, creating new, modern

and some architecturally very interesting buildings. Perhaps now

where in NYC can you find so many modern buildings, packed with

amenities, within walking distance of each other. Manhattan,

Brooklyn and other parts of Queens have been building up for

decades while LIC was almost a blank slate of under-developed

property. Long gone are the piano factories, printers , iron works, etc

etc, but they do live on the names of the new buildings and

businesses.A rendering of the Galerie condominiums

being built across from MoMA PS 1.



The large Jackson Park apartment complex, near Queens

Blvd and Court Square.

There is also many high-end rentals to

choose from including 22 22 Jackson

Ave, Jackson Park, The Forge, QLIC,

the ARC, The Maximillian, The

Harrison, The Hayden, Linc LIC, The

View, Alta LIC and the numbered

buildings on Center Boulevard and

others offer an attractive living

choice; some right on the waterfront,

others closer to Court Square or

Queens Boulevard with great access

to subways, shopping and food.



Perhaps in order to attract residents from Manhattan and

maximize returns, the buildings have amenities built in that older

buildings would have a very hard time retrofitting into.

So now standards amenities aren’t just a gym, common room or a

laundry room, and a doorman; now it is more about gym with a

yoga studio, a media room, a game room, a rooftop deck, a kids

room, some landscaped outdoor space, in-unit washer and

dryers, modern kitchen and bathrooms, perhaps a pool and a

basketball court, an on-site concierge/valet, a garage, pets are

welcome and you enter through spacious and architecturally

interesting lobbies.

For sure the apartments may not be as spacious as some pre-war

buildings but they feel much fresher, current, energetic and

upbeat.

Outdoor terrace in LIC with clean, modern design.



Condos such as The

Powerhouse, 5sl, Arris Lofts,

The Factory House, One

Hunters Point, One Murray Park

and several others have many

amenities.

Condos such as the Murano,

Corte (under construction) or

the Galerie (also under

construction with some units to

see) are architectural gems.

A game room and indoor pool in

LIC

The Murano condominiums on Borden Ave, 2

blocks from the waterfront.

Next:


House?



In the not-so-distant past, the purchase of a million-dollar house certainly had a lot of cache. It had to be something special for

someone to pay a millions dollars!

Now it seems it takes much more in the NYC area just to get a good house.

Here are some houses in the Forest Hills / Central Queens area that were purchased for $700 to $925k recently. Typically they have

small footprints and conditions inside are unknown.


They paid how much for that?

$920k in Richmond Hill, 85th Ave $912k in Forest Hills, Alderton Street $905 in Kew Gardens Hills, 62nd Road

Here are some more houses in the Forest Hills / Central Queens area that were purchased for $700 to $925k recently, all

under $900k. All are below $900k and they do seem different from the first group.



$790K in Middle Village, 81st

Street

$810k in Rego Park,

Wetherole Street

$765k in Richmond Hill, 123rd

Street

$760k in Briarwood on

Coolidge Ave

Here are some more houses in the Forest Hills / Central Queens area that were purchased for $700 to $925k recently, all

under $900k. This group is the least expensive of the bunch, but are all still north of $700k, each in a different

neighborhood.



$790K in Middle Village, 81st Street$748k in Corona, 52nd Ave$705k in Glendale, Rutledge

Ave

So what is the point of this list of home sales?

You certainly can’t find a freestanding home in The Gardens for anywhere near these prices but there are always

trade offs between the size, condition and looks of the house as well as the location and other factors. Not all of

these things are visible on Zillow.

Now, some current listings of homes in the area.



Winter Street Semi-attached (right side

of house) for $1,788—the current price

of choice for 4 beds in The Gardens. 4

bed, 4 bath, 2,118 sq ft.

Arbor Close (between Queens Blvd

and Austin St) Semi-attached for

$1,449k. 3 bed, 1.5 bath, 2,010 sq ft.


>A Sampling of listings in Forest Hills Area

Deceptively large home in The

Gardens for $2,595k. 5 beds,

3.5 baths, finished basement,

3,164 sq ft.

Jamaica Estates 5 bed, 3 bath center hall

Tudor house on elevated lot, rear yard.

$1,699k, 2,600 sq ft.

Enormous semi-attached GWT

townhome, 7 beds, 6.5 baths, 6,742

sq ft. for $3,400k.



Spacious house with multiple decks and

very traditional and upscale décor,

$4,699k , 6 beds, 5.5 baths and 5,282 sq

ft.

Middle Village semi-attached colonial

with 4 beds, 3.5 baths, working

fireplace, 1,651 sq ft. for $879k.

Forest Hills “Archie Bunker” type

house with 4 beds, 2.5 baths and

1,648 sq ft. for $968k.



Kew Gardens large home with large

windows and extensive marble inside, 7

beds, 4.5 baths, 4,500 sq ft for $2,169k

BRUCE EATON, AGENT

LICENSED REAL ESTATE SALESMAN

T: 718.544.2313

C: 917.572.3751

E: [email protected]

398 BURNS STREET

FOREST HILLS, NY 11375


Thank you!

An aerial view of Forest Hills from the northwest.

Documents

Forest Hills and Central Queens Newsletter...Forest Hills and Central Queens Newsletter The Outlook for New York City Real Estate 2019 2018 is over and what a turning point it may