In the wake of Amazon’s announcement to back out of their Long Island City headquarters deal, a local real estate website believes that real estate interests will shift in the neighborhood.
The New York City real estate website StreetEasy has been tracking interest in price growth in the area since Amazon announced their intention to bring their new headquarters to Long Island City in November.
Following the company’s Feb. 14 announcement that they are backing out of their plans, StreetEasy believes that Long Island City will see a dramatic change in area interest compared to Amazon’s original announcement.
“Long Island City’s housing market will likely experience a bit of whiplash as a result of this latest news,” said Nancy Wu, StreetEasy’s Economic Data Analyst. “In the weeks after the initial announcement that Amazon would be coming to Queens, we saw sellers in the area increase their asking prices, interest from buyers and investors spike to new highs, and for-sale listings beyond Long Island City – in areas like Midtown and Astoria – tout their proximity to the new Amazon campus.”
According to StreetEasy, after the news of Amazon’s potential decision to bring the HQ2 to Long Island City, interest in the area skyrocketed. From Nov. 5-7, StreetEasy’s searches went up 283 percent compared to same three days in the prior week (Oct. 29-31). The next week, when the news was confirmed by Amazon, interest shot up 519 percent in search traffic between Nov. 12-14, compared to Oct. 29-31.
Following the increased interest in the area, prices in Long Island City began to soar. In the five weeks following the announcement, 18.8 percent of homes for sale in Long Island City increased their price. In the five weeks prior to the announcement, no listing in Long Island City raised its price.
Long Island City also saw a decrease in price cuts following the announcement. Compared to the five weeks prior, StreetEasy found that only five listings in Long Island City cut their price in the five weeks after the announcement.
According to StreetEasy, over 75 homes that were for sale in 48 buildings touted their proximity to the planned Amazon HQ2 site. However, the majority of listings mentioned their proximity to the HQ2 campus were in Midtown East (42 listings). There were only 3 listings in Long Island City touting their proximity to the new Amazon headquarters.
Now with Amazon’s intentions of pulling out of the deal, StreetEasy expects that prices and buyer interest in Long Island City should return to normal.
“Now that the company has decided against setting up their new headquarters in Queens, we expect asking prices and buyer interest to fairly quickly revert back to their pre-announcement levels,” said Wu. “The Amazon reversal highlights the risk inherent in speculative investment in real estate in the city. While the city has enjoyed swift economic growth, turning a quick profit remains difficult, particularly in areas dense with new development.”