Yesterday Amazon canceled their plans to set up shop in New York’s Long Island City neighborhood. In the aftermath of their original announcement that they were coming to New York (in November 2018), the impact on real estate prices was one of the main narratives. Now that the deal is off, should we expect prices in LIC to plummet?
LIC prices bucked a serious bear market in New York real estate
Based on data collected from StreetEasy (for the 92 listings currently listed for sale in LIC), Amazon's original announcement led to a serious boost in real estate prices in Long Island City. Nearly 50% of apartments saw prices rise in the three months since the announcement, while our sample of 60+ apartments across 10 different Manhattan and Brooklyn neighborhoods didn't turn up a single price increase over that time span.
Similarly, while more than half of the Manhattan and Brooklyn listings saw a price drop, only 13% of Long Island City listings fell in price.
To caveat, survivorship bias is a risk here: we don't know about the price movements of the apartments that have sold and disappeared from the site in the past three months. It is possible that properties that have been on the market for at least three months are much more likely to have seen a price decrease.
Interestingly, some listings even singled out Amazon as a selling point
Data collected from 161 RealtyHop listings of apartments for sale in Long Island City shows that there are listings that explicitly mentioned Amazon as a selling point for the apartment:
- “A half a mile away from the future home of Amazon's HQ2!”
- “Don't miss the opportunity to make this your home and be in close proximity to Amazon's Headquarters.”
- Across the street from Amazon's future headquarters
Obviously we'll have to wait and see how the real estate market in Queens takes this news - indeed, real estate developers have already spoken out, and they are less than thrilled. Rightfully so: this data suggests that Amazon could have been buoying the Long Island City market, and it could be primed for a drop.
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