Brooklyn and Queens Real Estate Outlook

With Manhattan prices at ridiculous and delusional highs people will keep heading to Brooklyn and LIC. There are plenty of Manhattan renters who kid themselves about their future prospects of buying a place in Manhattan. When they wake up to reality and choose to buy a place they'll head for LIC. It will take some more people going there and some more improvement to the area to bring more of the crowd, since lately Manhattan dwellers have been behaving more like sheep and not the great cultural and business leaders they think they are in their own minds. When enough buyers make the purchase in LIC, the rest of the sheep like herd will follow. Right now their egos are too fragile and personalities too shallow to be able to make a better investment decision.

Here's a thread that might be of interest to you:

http://www.streeteasy.com/nyc/talk/discussion/1983-Downtown_Brooklyn_vs_Long_Island_City

All LIC needs is a few more galleries with some bad contemporary modern art and the sheeplike herds with their bad taste will all blindly follow.

Ahaaahahahaha, yep, all they need to do is grab a few big pieces of metal from a nearby LIC scrap yard (the ones that are left), weld them together in a shape that makes no sense, have some no names from the art scene write it up as a masterpiece, put it on the waterfront and all the Manhattan dwellers, will say "Wow, what is that? Not sure, but some hedge fund manager tried to buy it from the artist." Sales in LIC will then soon after soar beyond their present (somewhat healthy) levels.

Sorry, but from where I stand, these prices can only depreciate. New-construction condos in speculative areas are a red flag in a market that is, at best, stagnant. Long Island City is particularly tough to gauge because it has been, and still is, primarily industrial. Still, I think it's safe to say that $1 million (minimum) for a two-bedroom will not hold. Look at comparable sales in the neighborhood and house and apartment sales in Astoria, which is primarily residential. It just doesn't add up. These prices are simply untenable when you can get a rental for half the monthly cost.

There is only one scenario in which New York City prices can hold at this level: if there is an endless supply of extremely affluent people (roughly the top 5 percent income earners) who want to live here and are willing to live in Bushwick just to make that happen. And if you think that's true, then you either haven't lived here very long or you haven't seen most of the city.

I recently look at LIC, both buying and renting. For $1MM, you get 2 bed/2 bath at Toll Brother new condo building. For $3,500, you get new Avalon rental apartment, which includes a spectcular view, pool, gym, rec room, and bbq grill. I did the numbers, and it looks like renting is the way to go. At the same time, I can't say what will happen to the rental and sale prices going forward.