Market Update: 2016, Already Eventful
The mild start to 2016, save a snow storm or two, have made for an already busy start to 2016. Open houses have stayed busy and sales have remained high, especially in light of mortgage interest rates hitting an recent record low in the first five weeks of the year. I have had two buyers move into contract already this month, and have several more active buyers who have been involved in multiple-bid situations.
The main conversation in real estate circles and beyond has been Williamsburg. Governor Cuomo announced in the first week of January that extensive track work on the L train to repair damages sustained to the tunnels during Hurricane Sandy may require a potential 1-3 year halt in service, and is tentatively slated for Fall of 2017.
Williamsburg has, in recent years, enjoyed a massive amount of new real estate development, both in the form of new buildings as well as condo and coop conversions and renovations in existing properties. While some investors see this impending transit halt as an opportunity to buy at greatly diminished prices, most experts are still hesitant to predict exactly what these potential transit changes will do to the sales market in the area.
It seems inevitable, however, that once any train suspensions and service changes begin, the rental market in North Williamsburg will suffer tremendously, while rentals in the south near the JMZ lines, an area that has traditionally been less expensive when compared to the rest of the neighborhood, will see a big increase in rental prices.
The long-term impact on sales and property values as a whole will be determined most by the length and severity of the changes in service. One or two years is a short enough window for most investors to accept lower rent rates if high rents are guaranteed to return to the area, but long term or even permanent disruptions in service could cause a more serious decline in the neighborhood. Local businesses are already worried about their ability to weather the storm - if the nightlife, restaurants, and small boutique shops Williamsburg is known for lose enough business, demographics in the area COULD shift enough that the real estate landscape in Williamsburg may be altered much more permanently.