lic

baa- I have been very hard on LIC for various reasons, however I find your post to be informative and objective. Very well said. I have a few questions. Are you considering the area? If not why? If price is the reason, at what price (sq ft.) would you buy at or never and why? Is your friend a possible buyer of the area?

dco:

Initially, not sure if I was. I certainly wanted to check it out first. For specific reasons, I prefer Queens as the next alternative to living in Manhattan. I have spent time looking at Hoboken & JC (NJ areas with train access to Manhattan) and I am not a fan of either of those two areas. JC - I don't care much for and Hoboken seems to be filled with college kids resembles a college town which is not to my taste. LIC holds promise from a proximity (I prefer the subway over the PATH). Easy access to LGA and JFK (since I travel 15-20 days a month).

That said given the only other viable alternative is Brooklyn (which I have not explored beyond Brooklyn Heights) - I think I may have to put LIC on my short-list.

I must profess though that the costs ($800 - $1000 Plus per sq feet) certainly astonished me. LIC around the waterfront seemed nice - actually very nice, however I think it is perhaps a good 2 years away from realizing its potential and fully blooming into a self contained neighbourhood (my opinion) and community. Will that happen? I am not sure - I hope it does. There certainly is a demand for rentals and the residents seemed younger professionals (20s/30s) working in Manhattan.
My one problem with the large presence of rentals is that the sense of community takes time to set in. The people are always in transition - moving in and out. Maybe it may change when people start moving into their condos.

Not sure if I will buy here. My friend is renting here and so far enjoys living here. Again the costs might put him off from buying.

The one condo I saw was nice though expensive - the 5SL. It is two buildings (one boutique style) and between the two on either side are desolate abandoned factories. Looking rather pretty - aesthetically - with ivy crawling over their brick facade. However to residents in 5SL, night time might bring some spooky thoughts I suspect. I was told that they are future condo developments. When i inquired about the noise dust when those bldgs are razed, I was told that everyone in LIC should get used to noise and dust, since there will lots of activity in the future. For million dollar condos, I wondered if it was worth it. But then again living in NY is not easy mate.

cheers,

baa- It's actually funny reading your post. I have the same feelings about the area. I have been told that my opinions about the development and price are not realistic. You hit the nail on the head about the area being under development for the next several years. There are plans for dozens of new developments. I think this whole area will be under construction for the next 5 years at least. It's not such a big deal in the winter with the windows closed but the noise in the summer must be unbearable especially if your on a lower floor.

The best advise I would give someone is to wait until EC3 opens and see how desperate the other developments get. With another 170+ units the competition will increase between the developers. With a wavering demand they will find themselves in a tough spot. Just curious at what price do you think you would consider. (sq ft.)

I've spent the last seven years renting in various parts of the UES, UWS, and even East Harlem. I'm ready to buy. Without a doubt LIC will get my money. I've explored the area for several months, going at various times - even walking from Astoria (Broadway by N train) to the LIC waterfront. It's definitly a place that will be developing over the next few years, but that's OK with me. It will be nice to help build a community.

Butter- Where did you buy or plan on buying. And I wish you the best of luck.

As more people move into the area in the new developments, more services and amenities will follow, the community will develop more, and the area will become more desirable and bring even greater demand. dco only looks at supply and fails to give credence to increased demand. LIC is one of the best areas of the city to buy right now from a value standpoint.

What demand. There is no demand that's why inventory (supply) is increasing daily. How many units have Powerhouse, 5SL and Foundry sold in the last 30-60 Days. And what's up with the 2 Hunter points projects, how are they selling.

LIComment you and I don't see eye to eye, the main reason is that you see the area as developed and in great demand and I see it as a work in progress with potential and overpriced given the infrastructure and low demand. Butters I wish the best of luck and think if you can put up with the area being a construction zone for at least 5 years and are comfortable knowing that you will lose money if you sell within 5-7 years then great and enjoy.

dco, LICComment. Both of you follow the LIC market (granted with different viewpoints). Obviously sales has been lagging during the past 6 months. Can you provide some insight at what price points do you think buyers will buy, and/or represent good value? I want to buy in LIC, but scare of the obvious reasons.

Jimmy, I think LIC generally will follow the Manhattan market. I think at prices per square feet at 60% of Manhattan prices for comparable buildings, buyers will be there for LIC. In a year or two, I think that spread shrinks to 70%, and in five years to 75-80%. I think LIC is a great value because it is a newly developed area so you can get in early in the process and enjoy the rise in values as LIC becomes more developed and more desirable. dco says a lot of negative things but he rarely if ever has any logic or complete research behind his statements. Face it, waterfront luxury property with Manhattan views and a train ride of 5 minutes to Grand Central, at 60-70% of Manhattan prices, is a great investment. dco never has said anything intelligent to dispute that statement. I think there are a lot of buyers on the sidelines right now waiting to buy, but are afraid what they read in the papers about the market. Once the economy and the financial markets recover demand will come back strong. If you like LIC and think you will live in your place for at least 2-4 years, I think you should not wait to buy because there is a good chance you will miss out.

JimmyT- I'm sorry you had to read LICComments. I respect his opinion and his passion about the area, however he couldn't be more wrong. JimmyT you should be worried and I'll point in the right direction to see why I feel this way. The water front ( west of Vernon ) has 3 actively listed new condo developments. The Powerhouse, Foundry and 5sl. In addition EC3 is poised to open it's doors to the general public. (they did a friends and family only already, I have heard it was also to test the market in regards to pricing) Look at these developments and the activity.

You will see that just about all of the units sold at 5SL were done so over the last 2 years, of course during the boom. The sold units should all be closed by years end. There are about 19 units left. We will see how many go back on the market after close. Remember everyone that does adds to inventory. If 5Sl were to have started it's sales in November like the Powerhouse it would have suffered the same.

The Powerhouse has sold less then 50% and most of those before the market debacle. The building is going to have 177 units. These units are not even listed in the LIC inventory numbers because the developers with hold these numbers to give the appearance that you must act now and in reality no one else is looking. There are about 15 units listed for the Powerhouse, however in reality there are still over 85 not accounted into the inventory numbers.

The Foundry is fairing even worse. The have sold less then 40% and have with held 20 units from inventory numbers.

EC3 is going to have 177 units and you will never see that reflected in the inventory numbers because they will hold them back to create an artificial supply market. It's all marketing, to make you think that it's now or never. Don't be fooled.

These are just the 4 that are west of Vernon Blvd. Not to mention a half a dozen around Vernon Blvd. (One Hunters point is technically west of Vernon but doesn't feel like the water front.

JimmT- look for yourself and then tell me if I have lied about any of this. Tightening credit and low demand will drive prices lower. And I certainly don't agree with LICComments about his correlation between Manhattan and LIC prices. Rest assured if Manhattan falls 20% LIC will fall 30%. Be patient. I gave an explanation on another thread and I will re post it below. Give it a read and it might help you further. Remember it's everybody's job to get the most of your money and It's your job to hold on to as much as you can, after all you worked hard for it.

VVerain- You are 100% correct. Finally someone has figured it out. All of my analysis is exactly based on what VVerain has just asked. Can I wait to buy? Yes I can. Will I get it at 20% lower? I have no idea. That's why people get paid lots of money to try and figure out what is more likely to occur based on the information available. Based on that information is it imperative for an individual to analyze facts and then chart a possible series of events that are more likely to occur then not.

I know that many people think that it's more complicated, however there are only 3 results that are possible when deciding to buy now or wait. First you buy and prices increase. Second you buy and prices decrease. Third you wait and prices remain the same. Based on those 3 possibilities it's all a gamble unless you analyze the state of the market. It's just that simple. Is it more likely that prices will increase, decrease or remain the same? Remain the same is a possibility, but for obvious reason no one debates, and why, because it's a wash. It doesn't matter, unless it provides you with time to make the correct decision. No one on this site has any idea exactly what the NYC real estate market will look like for certain. I have my opinion and you have yours. Without knowing exactly who is right I recommend waiting. It gives you a 2/3 of chance you will be right. Buying now and your at 1/3. And that's without doing the analysis.

JM/VVerain- It is that simple. People have 3 choices. If you can't see that I'm not surprised. BUY, Don't' BUY or Wait. That's it. VVerain- I said that to come to a decision one should consider the current market and it's future. And then you are still left with just 3 possibilities.

JimmyT- What ever you decide I truly wish you the best and hope you are happy with what ever decision you make. Good Luck

dco, your 3 results are hilarious. How about you wait and prices go up? You conveniently forgot about that possibility. So much for your "analysis" . . .

LICComent- Well if you actually thought that prices were going to increase then wouldn't you buy? Also you missed the question that was asked about by VVerain. He wanted to know if it were possible for prices to remain the same. However you are absolutely right that if you wait prices could increase. I guess if I were buying at 15 CPW that might be a concern, however I'd still recommend waiting. You also conveniently missed when I said "Is it more likely that prices will increase, decrease or remain the same"? I guess you think prices are going to increase. Would you like to put a figure on that theory?

dco: My long term plans to be in Manhattan are in a state of flux so I am not sure I would put down the money to buy now. I would though (for investment purposes) if I saw value - which I am not seeing now. And if people think that prices will only go up then so be it. If I am ever priced out of Manhattan, I will move to Paris (my other fav. city).
I am not sure what would be a good price - but certainly not $850K for the 1150 sq feet 2 bedroom in 5SL. It is a boutique building (the one on 47 St) and has no doorman. Only card access. The apt. inside is nice and comes with a terrace. The views - well you need to get used to looking at the row houses that dominate LIC and then in the distance the Queenborough bridge. View is pretty dumpy.
Now the new bldg next to the East Coast rentals right on the waterfront - those views seem stunning - at more than $1000 /sq feet. But that is the furthest walk from the subway station. But if I wanted to spend that kind of money in LIC - that is perhaps the only building I would look to buy in because I would be guaranteed an un-interrupted view of the water and the skyline.
I was not impressed by the Powerhouse at all. Don;t ask me why - I just did not get a good feel.

LICComment - Value is relative I guess. I bet you that $800 per sq feet could get you a doorman co-op on the UES in Manhattan these days. So, it is really dependant on the individual spending that amount to decide if being in Manhattan is a better option. But disagree that the price differential between LIC and Manhattan will decrease over time - Who knows? Time will tell. Maybe you are right on that mate.
However to buy and suffer through the dust/noise etc for new construction just to get in at the right time seems a little misplaced to me. But that's my opinion. I also happened to go see the Fusion condos - really nice. But the neighbourhood - well the less said the better. It looks upon a parking lot which will be coming down shortly. When I asked the builder's son (who was showing me the place) about the noise/pollution during that construction, he waved his hand and said that's a small price to pay to get in early. He was so confident that he remarked that his dad (the builder of Fusion) is planning to move into the Fusion upon completion. As I looked around - I kept thinking to myself. Get in early - where!?!!! The place is a short walk from the Queensborough Plaza stop, agreed - but the whole area just seems so run-down. Sorry this is not a slam - just my opinion. I really want LIC to become the Sausalito (to NY's San Francisco). Will it happen - who knows?

I'm looking at Ten 63 Jackson, Arris, Hunter's Point (or View - I get them confused), and some other kinda boutique development (I forgot the name). I know the market is what it is... but rule #1 is not to buy real estate thinking you'll become rich with one investment. I really just want a home I own. Plus, I've moved enough times to not want to do it anymore. If I could find a place I could stay in for 100 years that would be great! The more realistic plan, however, is 5 years-ish.

I think I prefer being close to the train versus the water... so that's where I'm leaning.

No one seems to have answered JimmyT's question about "price points/representations of good value".
In my opinion (given current manhattan prices) I think that anything under $750psf can still be considered a "good value". If you have a great view/good outdoor space in a building with lots of ammenities then I would say that below $850psf is still fair - I don't know that EC3 will be getting $1,000 PSF but it does offer a location that no other condo in the area can stand up against. With that said, people who say that the average in the area is above $800psf are just wrong, there are a few buildings in the final stages of releases that are asking in the low - mid 800's but most of the units are still priced below $750psf. Midtown, one stop on the train, is starting at almost $1,000psf - so at a $250psf discount for a top-end building in LIC vs. starter place in midtown is still a pretty steep discount. Anyhow, that's just my opinion.

Now, to get specific - as baabamal notes, there is a big difference in the Queens Plaza and Vernon/Jackson areas. Queens Plaza has great transportation but it's got quite a bit further to go than the waterfront/vernon jackson. In my opinion, that area is more seculative and should still be priced at around $600 psf (Butters08, that would include Arris, View59, crescent etc.).

Butters08, I do agree with your coment on transportation. I would choose to be near the vernon/jackson stop - very near vernon and a quick walk from the waterfront. One Hunter's point is the one on Jackson (I believe) and it seems like a very nice building. DCO, it's now more than 60% sold. also, The Foundry has broken the 50% mark in the past week.

I think that 10-50 was one of the most fairly priced buildings. It is very near the subway, the prices on the top-end were only around $750psf with most of them in the high 600's psf range. Also, contrary to popular belief, the light blue pastel color that everyone thought that it was going to turn out to be was just the protective covering which has since been removed - it is now almost done and looks pretty close to the rendering (which I wasn't fond of anyway) but it's not like it looks different than the original renderings.

10-63 opened later, and value-wise, it is a close second to 10-50 - most went in the low 700's psf. Anyhow, sort of a mute point becasue 10-50 is sold out and ten63 is over 80% sold - but if you like one of the remaining units, i'd say that it's currently the best deal. The subway is on the same block, it's only one block from vernon and it is just far enough from the pulaski (just after the cars turn to go over the bridge), so you don't have all of the traffic - especially if you get a unit facing 49th ave.

One Hunters Point is a great deal too, some of the best $psf in the area, but it's on the other side of jackson and right on the foot of the Pulaski. you can walk under the pulaski to get to the subway, so that's not bad, but there will be heavy traffic in front of the building during the weekdays.

My last recommendation is The Badge building. It is just slightly further from the subway but it's last two units have had price cuts (the developer clearly wants to get them off their hands) but they have pretty cool layouts and the $psf is very reasonable). It's a very nice conversion building and it's ready to move-in.

Butters08, my only warning is the Queens Plaza area. I am by no means bashing it. I think that it also has good potential. But, I would be willing to move to the vernon/jackson area now even if no new projects started. I can't say the same thing about queens plaza - I would not want to live there unless I knew that development would continue at the same pace -- I also think that it will end up becoming more of a commercial zone - a number of tall office buildings are planned for the area. Again, if i'm pointing out the obvious, it's just my opinion, but realize that Queens Plaza is still a speculative market.

I totally agree witht the beginning of this thread though. Baabamaal, I've been saying for some time now that it's not long before people begin to realize that Manhattan is not a small as it seems and that there's actually enough people out there that would choose to live in LIC (or other areas with easy access to central parts of the city) rather than the far UES, UWS or even the Financial district.

I am not one of those people that is trying to talk up the market. This is not a good time to make an investment. So, if you're buying a place with the idea of flipping it, probably not a good idea. If you are looking for a home to live in, then I would highly recommend LIC.

Just make sure that you do your research on the different buildings and areas and make sure that you understand the general prices. And don't let any of the brokers make you feel like you have to act now - you have time to research.

For fifteen years I've heard LIC is the next great place. For some reason it just hasn't happened. I think anything in Queens will never be "the next great place."

Contrary to popular belief, the "next great places" don't happen over night. But you do hit a tipping point and I and the type of people that I know are certainly not "cutting edge/cool" by any means. so, the fact that I'm recommending LIC as a place to live means that it's pretty much there.Is it an established neighborhood? No. But is it just starting to take off? No, it's already past the "taking-off point". The density has already arrived and the number of projects scheduled for completion in the next year are undeniable. Let me tell you, if you did buy in LIC 15 years ago, then you would have been buying the next "it" neighborhood". You would have been buying places at well below $150psf. Hey, if you were buying land you would have made millions. Anyhow, when you really want to be in the next "it" neighborhood then you have to be looking at a place before anyone else is...and that would be 15 years ago in this case.

It doesn't take everyone agreeing, it just takes demand. Some people may not want to live on the UWS, but as long as there are enough people to create demand, it will work. And there seem to be enuogh people interested in LIC to make it a neighborhood.

Again, LIC is a big area. I am specifically referring to the Vernon/Jackson stop and the immediate surrounding area.

Thanks all. I also believe in the medium and long term future of LIC. My biggest concern is buying now, and having the price drop another say 10 to 20%. My entire equity will be wiped out. I look at the Charleston on 34th Street, and some early buyers lost up to 20% compared to the prices recent buyers paid after the developer lowered the price to move the remaining units. I have not seen the developers in LIC take price cut and inventory is standing still. If they are willing to be negotiable, I might be willing to sign the contract.

I agree with you JimmyT.
My opinion is that a lot of units moved below the $750psf mark - if you can still get something in the high 600's PSF then you are buying at the right price ... the stuff that's sitting around is over $750 and if you look at the units that take price cuts .. that's when they start to move again.

That's why I used Badge as an example. just over a month ago they had 6 units left. They were all priced in the mid 700's psf. They cut the prices to low 700's/high 600's and there are now only 2 left.

It is definitley a buyers market but you can still find prices that don't have 20% to drop. it's listing prices that are dropping right now ... not sale prices. people immediately marked prices up 20% becasue they figured that was normal ... for now, at least, prices are holding firmly at previous sale prices. You just need to be informed and make sure that you are not buying something that is listed way above what people have alreay bought at --- and that information is readily available.

JimmyT:

My suggestion is simple: If you want something around the 650-700 psf range then ask for it mate. In this market nothing's a stretch. If you come across as a sincere and genuine buyer willing to sign on your terms, there is always a possibility. As an example, 5SL is about a month away from being ready. I think there's only one buyer that has moved in so far (in the bigger building on 48 St). I suspect in a building which has 17 or 18 unsold units - hey, you never know.

LIC has been talked about as the next big neighborhood since the early 80s. However, it actually is happening now because the city re-zoned the area 3-4 years ago. Many developers were holding properties waiting for the zoning changes. Once the zoning changed, construction started immediately on development after development. This isn't some false start like 15-20 years ago. As lobo said, LIC is past the taking-off point and has already come very far in just a few years.
FYI - Hunters View is the building off Jackson by the Pulaski. One Hunters Point is on the west side of Vernon, on Borden right near where Jackson meets Vernon.

How have sales been in the last 30-60 days at Hunters View, One Hunters Point, 5SL, Powerhouse, and Foundry. The Hunter's seem to be keeping that info very close to the vest. They are saying that they are 50% sold but evidence of such. And what about the rest of them. Demand is way down and I would wait to buy now is to risky. Prices are much to high in this area to live in construction zone for the next 5 years.

10-50 Jackson was sold out last year, but now Corcoran is listing *two* apartments for sale 2 bedroom/2 bath units. Check it out.

http://www.corcoran.com/property/listing.aspx?Region=NYC&ListingID=943881&ohDat=

http://www.corcoran.com/property/listing.aspx?Region=NYC&ListingID=945312&ohDat=

Care to speculate on what happened to the buyers?

purpletulip95- There are a lot of buyers that entered contracts over 1-2 years ago and now have to get a mortgage in this climate. I have no idea if this is the case, however just because a unit is listed as sold actually doesn't mean that. It's only sold until when it closes. I suspect that in the next 12 months you will see many more units come back on the market from new developments because people will find it much more difficult to get a mortgage. Most will have to come up with much more of a down payment then they thought they would of a year ago.

Take a look at View 59 in the Queens plaza area ( Look at rentals on the NY TIMES for LIC). They have started closing on units and now show 12 rentals. It makes up 33% of the total units. It shows several possibilities. First that there may have been much more speculative buying then most are will to admit in NYC. Second the build saw demand disappear at current price point. Third buyers backed out (not able to get mortgage or just thought the market changed and used a contingency to drop out.) It's just not a good to see 33% of a new development being rental.

dco, you keep saying the same inane, unintelligent things over and over again. Lobo gave a good rundown on sales in the area, which by and large have been quite successful. You bring up View 59. That building is in the second tier area of LIC, and the fact that 70% of the buyers plan to live there and did not buy as an investment property seems pretty good to me. Stop being bitter that you missed the boat and stop making yourself look like a fool to everyone.

LIComment- View 59 second tier area! Well we finally agree on something.

I don't understand why buyers back out once they commit to contracts. On most of these new developments there's no mortgage contingency and they require at least 10% down. So, all these people backing out are OK with losing their 10% down-payment?

Butters08- What happens when you can't get the $800,000 mortgage?

DCO - Isn't that something you think about before? I am quite aware that mortgage standards have become more strict, but it's not a mystery: good FICO score, savings, and adequate income. If you thought you would qualify for 90% financing and then find out you can only get 80%, wouldn't you do anything possible to get the additional 10% rather than loose the 10% downpayment?

If you put 10% down on a property without every talking to a mortgage broker - well that's just stupid. So, my point is are so many people that are backing out of contracts really that stupid?

My issue with the Queens Plaza area is that I think it will become very commercial - like a mini financial distric. So, while I do believe that it will/is going through a transformation, I personally wouldn't want to live in the middle of a bunch of commercial buildings. See this week's afineblog:

http://afinecompany.blogspot.com/2008/06/rockrose-to-build-large-office-tower.html

stick to the Vernon/Jackson subway stop people.

Butters08, in more frenized times (say, through early 07) I think a lot of people did anything possible (borrowing from family, etc.) to get the first 10%. There was a lot of irrational behavior from people trying to 'get in the game' and make the same profits their friends who bought in 02 made, or avoid being, gulp, priced out forever. I don't have figures, I just remember the conversations I used to have and the feeling at open houses. If a person or couple earning low 6-figures stretched to buy a 1br and did everything they could to put the DP + transaction costs together, finding another 10% + enough left over to make the bank happy is going to be extreme;y difficult.

Sorry for the off-topic post.

What is entirely possible is that some people were not able to get financing (as everyone else has mentioned, becasue they did not plan to put down more than the 10%, or lost a job, etc.) and the building developers have probably agreed to try and re-sell the apartment, and if they are able to do so before the planned closing then they wil refund and if not then the person will lose the 10% - in which case the developer will probably then follow by cutting the price by 10% to move it faster without actually losing any money. It always seems to work for the developers.

lobo-
Thanks for the blog mention! There is a fair amount of residential condo construction going on in the area as well. While we dont know what the finished product is going to look like, sure seems promising. The $50 Mil the city is set to spend on Queens Blvd and Vernonb could tip the balance.

Recently viewed a number of the new condos in LIC. Based on my discussions, they are not negotiating price right now. They seem willing to pay transfer tax, but nothing else. I had mentioned that Manhattan apartments under $1MM seem down by 10% and if they are willing to drop the prices by 10%. All of them come back with a no answer. It seems all the LIC developer are holding the line on price right now. I heard from a reliable source that some of them are offering higher than typical commission to brokers to bring buyers. I decided to pass on LIC right now, and wait another 6 months. Maybe they willing to negotiate a bit more in the middle of December?

There is a ton of inventory that has not been released yet by developers. I think you figured out for yourself what I have been saying and agree 100%. Give it 6 months and re-evaluate. You might see that they will begin to reduce sooner, however I would wait even longer. I'd wait until a 20-30% correction. By this time next year LIC and the rest of the city will be hurting. Good luck and remember calling a bottom in the housing market is a lot easier then in the stock market.

Don't fall for "you'll be priced out if you don't act now". It's just marketing.

There goes dco spewing the same nonsense that he has been saying for a year now, over and over and over again . . .

Keep waiting for that 30% drop in LIC and you'll never own a place.