Douglas Elliman quarterly reports on sales and rental real estate markets in Queens are out, and while the numbers show a slight decrease in sales and rental prices in our borough, experts warn no one should feel too optimistic.
Sales: The market is very fast
Homebuyers priced out of Manhattan and Brooklyn are still looking for affordability in Queens, according to Jonathan J. Miller, president and CEO of real estate appraisers and consultants Miller Samuel INC, who personally worked on Elliman reports.
Even though the average sales price of residential properties in Queens decreased by 9 percent to $475,498 in the first quarter of 2016, Miller considers this decline an outlier rather than a trend.
Sales prices culminated last fall when after years of stable prices, Queens real estate saw a notable uptick, particularly in the fourth quarter of 2015.
Miller also pointed out a decline in inventory combined with heavy sales activity in the first quarter of 2016. Despite the slip in sales, contract volume surged. At the same time, the market experienced a very low negotiability of real estate prices as well as a reduction in marketing time.
Decreased inventory is consistent with the regional as well as national trend, and Miller said that it is unclear when the market will see more inventory. Decreased inventory creates pressure on healthy prices.
Miller explained that the current market is very fast. At the current rate of sales activity, it would take 4.9 months to sell all inventory at the market, which is a lot higher than the average 9.9 months in the last decade.
Rentals: Tenants resist the rent increase by moving
Unlike the sales reports, which consider data from the entire borough, rental Elliman reports focus only on northwest Queens neighborhoods of Long Island City, Astoria, Sunnyside and Woodside. Long Island City is the anchor of the region where a tremendous amount of new developments are entering the market constantly.
At any given month, the Elliman report on rentals is published approximately one quarter of all activity is related to new development. This causes the data in the reports to be choppy and inconsistent as it really depends on what development enters the market.
This March the pricing showed mixed results with little ups and downs as well. However ,Miller was able to spot a trend that the prices of units in the top 10 percent luxury apartments drop generally the most. This trend is consistent with Brooklyn and Manhattan.
In this specific quarter, the luxury market didn’t under-perform, but three out of four times it does, said Jonathan Miller. Media rental price for a luxury unit in Queens was $4,357 in March; new development price was $3,017. Average rental price in northwest Queens was $2,927.
Another interesting fact observed in this past quarter was the high number of new leases. The number jumped up 19 percent. Miller explained to QNS that the reason for this is that the tenants are resistant to price increase of their lease and thus choose to move.
In Manhattan, tenants feel much the same about their own leases.