The Real Deal New York

Astoria euphoria

The Queens neighborhood sees strong interest in new developments, but “ancient zoning” keeps it from competing with LIC and other areas

September 01, 2012
By Melissa Dehncke-McGill

It used to be that Astoria, Queens, was an ethnic Greek enclave dominated by an older housing stock of prewar buildings and one- and two-family homes. But in the last few years, the neighborhood, which has been gentrifying over the last decade or so, has continued to see lots of new residential development, and with it, more young professionals looking for new construction housing at the right price.

This month, The Real Deal talked to residential brokers and market analysts about how real estate in Astoria is holding up.

What we found is that while sales volume is down compared to last year, it’s largely because there are far fewer condo projects on the market now. That, in turn, is a result of many of the planned condos turning rental when the market soured. But when new development projects do come on the market now, they tend to do far better than resales in the neighborhood.

Brokers said that nearly every inch of available land in Astoria has been developed for residential use. The problem for developers, they say, is that there isn’t that much land — at least in desirable locations near the subway — left to buy. Vickie Palmos, a salesperson at Astoria NY Condo, argued that while the city rezoned a 240-block area in Astoria in 2010, that it did not come in time for the building boom and many of the larger properties had already been developed. She also noted that city’s 2010 rezoning added new restrictions, especially for high-rise residential developments.

“Long Island City has reaped the rewards of Astoria’s ancient zoning,” she said.

On the flip side of the market, brokers say that rental demand is going strong — especially for new construction units.

As new buyers and renters flood into the neighborhood, the area is seeing an increase in the number of restaurants, bars and retail amenities. “Of course, it’s not the same change we see in Williamsburg or in the Meatpacking District, but this is not a [mostly new] residential neighborhood as those are,” one broker said.

For more on which price ranges are doing best and worst, what new residential projects are in the pipeline and how quickly apartments are selling, we turn to our panel of experts.

 

Vickie Palmos

salesperson, Astoria NY Condos

What’s going on with residential prices in Astoria today?

Overall, prices are down about 10 percent from two years ago, depending on the category. But prices seem to have stabilized since last year. In some cases — such as for four-to-six-family [homes] and one-bedroom condos — there’s high demand with extremely low-to-almost-no inventory. I would expect sales prices for these categories to be above present averages by the end of the year.

 

Which price ranges and apartment types are performing best right now in Astoria?

The best performing categories are without question condominium sales ranging from about $400,000 to $430,000, and two-family homes at about $750,000. Combined, they represent about 75 percent of the Astoria sales.

 

Which price ranges and apartment types are struggling the most?

The worst performing price ranges for condo sales are $600,000-plus units. They are often unusually large two- or three-bedrooms that lag on the market almost double the average number of days than other types of apartments do.

 

How do you think Lincoln Equities’ $1 billion Hallets Point project will impact the market?

It can only help the Astoria market. In my opinion, we are at a disadvantage compared to Long Island City and Brooklyn in terms of available land and attractive up-zoned locations for high-rise residences. Hallets Point will help Astoria break into this exclusive market.

 

A few years ago there were a lot of new development projects coming to the Astoria market and some were converting from condo to rental. How is the new development market doing now?

The new residential developments are Astoria’s real estate backbone and savior. The resale market is not nearly as robust. There are a handful of new developments in the wings that are estimated to be completed within six months. They are typically eight-to-20 unit boutique buildings with limited amenities.

 

How are rentals doing in Astoria compared to sales?

The rental business in Astoria is booming. The Sterling at 21-16 31st Avenue, a new 32-unit condo, decided to go rental. Our firm rented 32 units in 45 days. The one-bedroom units ranged from $1,850 to $2,300. There were no incentives or negotiations. We also listed 21-60 33rd Street, a 21-unit condo building that went rental. Its grand opening is this October. Pricing will be very similar. The most desired residential inventory, in both sales and rentals, is without question new construction.

 

What’s the inventory like in Astoria these days, and how does that compare to a year ago, two years ago and during the boom? 

The condo inventory is at an all-time low. There is a huge demand for new one-bedroom units, with very little inventory in the near future.

 

How long are properties staying on the market in Astoria these days?

Assuming a property is priced within around 5 percent of a realistic appraisal, new one-bedroom condos will stay on the market for 45 days on average. New two-to-three-bedroom condos will stay on for 150 days and one-to-three-family homes will stay on the market 160 days. These figures represent a 50 percent drop in days on the market compared to two or three years ago.

 

What kind of new retail and restaurants are you seeing in Astoria today?

It still has the largest Greek influence in the city, but now you also hear nicknames in the neighborhood such as Athens Square, Lil’ Egypt, Lil’ Brazil, etc. That’s all brought a mix of fine dining, casual chic, international cafés and nightlife.

 

What are the biggest challenges to selling residential property in Astoria today? 

The greatest challenge is the availability of development sites. Rezoning in certain “walk to train” locations can solve this problem. When the market demands a product that doesn’t exist in your area, [buyers] move on. Astoria’s demographics prove we need rezoning and incentives. Long Island City has reaped the rewards of Astoria’s ancient zoning rules.

 

Who are the most active buyers in Astoria right now, and how does that differ from the past?

The most active buyer in the Astoria market is without question the new condo purchaser. This demographic represents 50 percent of the Astoria real estate market. Our evidence shows the average buyer in this market is a 25-to-35-year-old, single, college-educated professional working in Manhattan.

 

Charles Sciberras

vice president, residential sales, Realty Executives Today

 

How do you think Lincoln Equities’ $1 billion Hallets Point project will impact the market?

I think this is going to take place four to five years from now. If the population grows as it has been recently, there will be a need for those spaces. Thirty thousand people moved to Long Island City over the last five or six years. … The only drawback about this development is that it’s over a mile from the subway. So they will have to make an adjustment in price and provide some type of transportation to get back and forth.

 

How are rentals doing in Astoria compared to sales?

Rentals are very strong and sales are very strong. A 500-to-600-square-foot rental in a prewar building gets $1,300 to $1,500, and the landlord pays the utilities. If you ask $1,700, it’s going to sit.

 

What are the biggest challenges to selling residential property in Astoria today?

For the property owners to be realistic in their pricing. Also, everything depends on the location. The closer it is to the subway, the higher the price.

 

Who are the most active buyers in Astoria right now, and how does that

differ from the past?

There are a lot of young couples, single people and foreigners. We’re getting an influx from Europe, the Middle East, from all over the world, as well as Manhattanites and residents from Long Island.

 

Robson Lemos

senior vice president, Corcoran Group

 

How is overall residential sale volume doing in Astoria these days, and how does that compare to a year ago, two years ago and during the boom?

Sales volume is smaller because there are fewer projects now than two years ago, plus several condo projects became rentals to fit to the new reality of the market. However, sales are still going on in almost the same way they were during the boom. The only years that they were really difficult were 2009 and 2010. Before the boom, tenants moved to Astoria just to save money. Now they’re moving to Astoria to save money and to get a better residence than they could get in Manhattan for the same price.

 

What’s going on with residential prices in Astoria today? Are they up or down compared to a year ago, two years ago and during the boom?

Prices are almost the same as they were a year ago, maybe a little better because of the short inventory now. However, it is not the same as it was during the boom. Prices for new development condos before the boom were around $500 per square foot; during the boom we sold as high as $750; now it’s around $700. Meanwhile, before the boom, co-ops were selling for around $300 per square foot, during the boom they got as high as $450 and now it’s around $400.

 

Lincoln Equities’ $1 billion Hallets Point proposal to build 2,300 residential units could break ground in Astoria this fall. How do you think that will impact the market?

I think that it will impact the market in a very good way. First of all, bigger developments sell better in Astoria, because the small projects are usually from first-time developers and they can’t deliver the product as it was promised.

 

How is the Astoria market faring for residential investors?

You can still put 30 to 50 percent down in Astoria for a condo investment property and have it rented for more than your financing combined with common charges and real estate taxes. So it’s a good location for investors.

 

What kinds of discounts off asking price are being seen these days in Astoria?

We don’t have a formula for it because each property has its own selling appeal. Buyers are becoming wiser. … My experience shows around a 5 percent negotiation gap for well-priced properties, more for overpriced properties and less for under-priced. During the boom there was almost no negotiation.

 

How long are properties staying on the market in Astoria these days, and how does that compare to a year ago, two years ago and during the boom?

If priced right, properties stay on the market around four months now. A year ago, it could take six months if priced right. During the boom, I sold a few small condo buildings in three weeks to two months.

 

What kind of new retail and restaurants are you seeing in Astoria today, and how is that impacting the residential market? 

You see all kinds of retail in Astoria now that you didn’t see during the boom. For example, I did the marketing and leasing of four rental buildings next to Astoria Boulevard and 21st Street when there was no supermarket around, which made it harder to lease the units. Today you have an amazing supermarket at Crescent Street and Newtown Road. … You [also] have a museum, [movie] theater and restaurants. Of course, it’s not the same change we see in Williamsburg or in the Meatpacking District, but this is not a [mostly new] residential neighborhood as those are.

 

What are the biggest challenges to selling residential property in Astoria today?

The first challenge is that most of the available land next to subway stations with prices that made sense in Astoria is developed already or not for sale. If you are a developer considering building next to a subway station, you need to buy a house to demolish and it has to be in an area zoned to allow a buildable square footage that makes sense. The second challenge is the subway lines that come to Astoria. They don’t work with the same frequency as in other neighborhoods. The third challenge is financing, though it’s a little better than it was in 2010 and 2011.

 

Harold Valestin

vice president, MNS

 

What’s going on with residential prices in Astoria today?

Prices are definitely up. As inventory has dried up, the prices have risen.

 

Which price ranges and apartment types are performing best and worst in Astoria?

Studios and one-bedrooms are doing the best due to their price point, but two- and three-bedrooms are [also] doing well. The $800,000-to-$1 million range is tougher because obviously there are fewer buyers in these ranges. Not that deals haven’t been done in those ranges, but they are tougher to come by.

 

How are rentals doing in Astoria compared to sales?

Rentals have followed Manhattan in regards to the rise in pricing. Astoria has an extremely strong rental market. There is more inventory to work with in rentals.

 

What kinds of discounts off asking price are being seen these days in Astoria?

If priced well, the wiggle room is tight. In my experience, it’s roughly 3 to 7 percent. This is a drop from the last few years when a buyer could get more like 5 to 10 percent off.

 

Jonathan Miller

president/CEO, Miller Samuel Inc.

 

What’s going on with residential prices in Astoria today?

The median sales price in the second quarter was $361,845 — up 13.4 percent from 2011, but 11.7 percent below 2010 and 26.6 percent below 2008.

 

Which price ranges and apartment types are performing best right now in Astoria?

In terms of price, co-ops and condos are fairly close. The median sales price of a co-op was up 16.2 percent in the second quarter from a year ago, while condos were up 18.7 percent in same period. But one-to-three-family homes slipped 0.8 percent.

 

Chris Shiamili

owner, Ardor New York Real Estate

What kind of new retail and restaurants are you seeing in Astoria, and how is that impacting the residential market?

Every major avenue has a host of restaurants, coffee shops, pastry shops and all kinds of things. The amount of retail space is more or less limited. What has been developing over the last five or six years are some new nightclubs and huge gym spaces. Most [of the clubs] are going into old warehouses.

 

What are the most surprising trends you’re seeing in the Astoria residential market right now?

Living in Astoria for the past 23 years, I never thought that developers would be able to sell condos on 21st Avenue or 31st Street because of the traffic and the noise pollution. What surprises me is that every inch of Astoria is being developed.

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