All this week, StreetEasy is covering the L train shutdown planned for April 2019, reporting on its impact on the housing market and how those affected plan to respond. Our coverage is running now to help readers make housing decisions well in advance of the shutdown. See all our L train shutdown coverage.

In the summer of 2016, the MTA announced plans to shut down L train service between Manhattan and Brooklyn. Afterward, rents and home sales prices in Williamsburg and Greenpoint fell steadily. More recently, however, renters and buyers in the affected area appear far less worried. In North Brooklyn, the submarket that includes Greenpoint and Williamsburg, rents have stabilized, following the trend in the rest of Brooklyn. Meanwhile, North Brooklyn sales prices increased after their brief decline — even in the face of stagnant growth elsewhere in Brooklyn and Manhattan — suggesting that the L shutdown may have sent deal-hungry buyers to the area and ultimately driven prices up.

If you missed out on buying a home in North Brooklyn during the price dip, now might be a good time to wait before negotiating a lease renewal or finding a new rental: It’s still too early to tell whether rents will remain stable or decline as the shutdown approaches. If you do get a good deal on an apartment, you may want to use the savings to invest in a bike.

Prices Rose as Buyers Rushed to Deals in Williamsburg

Buyers appear not to be worried about the long-term impact of the L shutdown. After the shutdown announcement in July 2016, prices dropped in North Brooklyn — and potential buyers soon rushed in. Between July 2016 and February 2017, the StreetEasy Price Index in North Brooklyn fell by 7.7 percent, or $89,000. Since then, North Brooklyn prices have more than recovered, growing by 6.2 percent in 2017, compared to just 2.5 percent in the rest of Brooklyn. The Price Index in North Brooklyn is currently the highest on record, at $1,165,030.

Canny New York buyers took advantage of the potential deals spurred by the L train announcement and swooped in to buy properties in North Brooklyn at whatever price point they could afford. Sales inventory also dropped by more than 9 percent in North Brooklyn after the shutdown announcement, despite growing by more than 16 percent in the rest of Brooklyn, showing a squeeze in available properties. Inventory in North Brooklyn dropped for all price levels and all home sizes, whether studios or multiple-bedroom units. Even luxury inventory fell by 8 percent in Williamsburg and 13 percent in Greenpoint, despite much new construction.

Thus, the L Train shutdown lit a fire under the North Brooklyn sales market by temporarily offering relative bargains. Prices initially declined, but buyers saw deals and snapped them up. Though prices are at high levels now, the market is still pretty hot. Sellers are taking advantage of this by offering fewer discounts. In response to the high demand for inventory, the proportion of price cuts in North Brooklyn decreased by almost 3 percent, while remaining unchanged in greater Brooklyn. The decline in price cuts is concentrated in Williamsburg, where price cuts decreased by more than 4 percent. The time for bargains here is over.

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Rents Appear to Stabilize, Though It’s Still Early

With the L shutdown over a year away, it may be too early to tell whether rents will decline as lease renewal season approaches. New 12-to-18 month leases up to now are not showing lower rents, since these residents can still move before the shutdown. If you are a prospective renter looking to move to Williamsburg in the next few months, or considering resigning your lease, it may be worthwhile to negotiate for a good deal, or ask for one or two months free.

According to StreetEasy’s recent Q4 2017 Market Report, rents in Brooklyn grew at the slowest pace on record in the past year. Rents in North Brooklyn have grown at the same rate as the rest of Brooklyn, 0.4 percent, since last year. However, this is the highest growth rate that North Brooklyn has experienced since the announcement of the L train shutdown. Numerically, the StreetEasy Rent Index in North Brooklyn increased from $3,027 to $3,040, which is not a significant change. Median asking rents dropped for 1- and 2-bedroom units, while rents for units with 3 or more bedrooms increased.

Rental inventory has also increased in North Brooklyn since last year. Inventory grew by 17.4 percent in North Brooklyn, and 22.1 percent in the borough overall. Much of this growth is due to new luxury development, rather than residents fleeing Williamsburg. In Williamsburg alone, luxury inventory increased by 23 percent.

The share of discounted rentals in Williamsburg declined by 2 percent to 33 percent, though it increased in Greenpoint by 7 percent to 35 percent. Luxury rentals were less likely to be discounted, while all other rentals were more likely.

One Year From L Shutdown, North Brooklyn Market Shows Few Effects

The impacts of the L shutdown on North Brooklyn’s housing market have been short-lived so far. Unfortunately for prospective buyers, the initial shock in the sales market that brought good deals is over. Prices have recovered to all-time highs, inventory levels are low, and discounts are rare. The shutdown has also had few impacts so far on the rental market. Renters on the fence about living or staying in Williamsburg in 2019 are encouraged to wait and see what happens.

>>  See more of StreetEasy’s L train shutdown coverage.

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