Queens can be a tough place to classify — it’s huge, multi-ethnic, and its real estate runs the gamut from Long Island City high-rise condos to Bayside mansions. The Real Deal checked in with brokers and developers with questions ranging from where the overlooked opportunities are (College Point, Newtown Creek and Glendale were among the answers), to how the market is doing (down slightly) to what the outlook is for development (good, because there’s not enough of it). Here’s what they said.
Dinko Grancaric
co-owner, Century 21 Benjamin Realty in Forest Hills
What’s a positive trend you are seeing in the market now?
In Forest Hills, the Windsor condo building was very successful. There are a few new projects in the planning stages and there is room for three or four other high-rises because the Windsor project did very well.
I have heard rumors of four other buildings coming up; three high-rises and a high-end hotel. I’m not sure if it’s going to happen or not, but if it does, it will all be within a one-quarter mile or less.
I think that house sales have slowed down drastically because they got so overpriced that they are beyond the reach of most people. We sell apartments and they are for the most part very affordable.
What’s happening right now that’s not good for the Queens market?
There’s definitely a shortage of apartments. I sell co-ops and condos mostly in Forest Hills and Rego Park. There are maybe 12 buildings that are condos; everything else is co-ops. But it’s taking longer to sell things even though there’s a shortage. I find people are being more cautious when they are buying. The media has been saying that prices are going to come down so the buyer is looking and then thinking, “let me wait.” A lot of the buyers wait and end up losing the apartment.
A lot of brokers really have to work for their money because it is taking longer to sell. Some of the smaller brokerages don’t have the money to market and a lot of agents are leaving the business because the quick money is no longer there.
Any areas of the market surprisingly active or inactive?
Buyers are surprised that we don’t advertise in Manhattan. We do advertise in the New York Times but we never do a Manhattan run because we found that it’s not worth the expense. A lot of our buyers come from within the neighborhood and want to stay in the surrounding neighborhood. There is not a huge move from Manhattan to Queens, although there are some that move here; it’s just not as many as people might assume. A lot of young people would rather live in a closet in Manhattan than a larger apartment in Brooklyn or Queens.
What sort of buyers did you once see that don’t show up now?
I don’t think that there are as many investors anymore. Prices are so high that there really is no room for them. All the investors got rid of their properties because they felt it was the time to sell. I am talking about the people that buy one or two apartments just to rent out, not the big guys. That sort of thing is not happening anymore.
What surprises you most about the current market?
The only surprising thing is how the newspapers say the market is supposed to be going down and, in fact, the market is still surprisingly good. It takes longer to sell but the economy is good and interest rates are good. All the signs that the market should do well are here. When the papers say things are going to get worse, I just don’t see it.
Jason Muss
vice president, Muss Development in Forest Hills
What is the most interesting trend you see in the residential market right now?
Unlike Brooklyn and Manhattan, Queens has a notable lack of new multifamily product, be it rentals or condominiums.
The residential market is experiencing shortage of product in the middle of the borough, and there is difficulty in bringing product to market.
What is the most positive trend you see now?
Queens is still a destination for many immigrant groups coming to the U.S., but unlike past years, established immigrants are coming here with savings and a head start. Many educated professionals are coming to Queens and public schools are being reinvigorated by the children of highly motivated immigrants.
Long-term trends bode extraordinarily well for Queens. The Asian-American population is projected to increase by over 1 million people in New York City in the next 25 years. That is an incredible statistic, and will strengthen areas of Queens, such as Flushing, that already serve as the cultural and commercial centers for the large Asian-American population here now.
Where is the best area for new condo development?
Flushing heads the list, which is why we are investing so heavily there. Other areas that come to mind are Forest Hills and, the most overlooked area in my mind, Jackson Heights, which has great food and so many interesting ethnic groups.
Judy Markowitz
owner, RE/MAX Millennium in Bayside
What is the most interesting trend you see in today’s residential market?
The most interesting trend I see in real estate right now in northern Queens is that it’s springtime in January! Buyers were out the gate beginning right after Jan. 1. Buyer calls were up by 30 percent; buyers are making more and much better offers and I’m even seeing multiple bids and buyers waiting patiently for a seller to make their decision. Much different than the climate was in the last quarter, and a pretty quick turnaround from what had seemed to be just the beginning of a market slump.
What is the most underrated part of Queens?
College Point is underrated. With its industrial outskirts on the water, a rumored plan to expand the No. 7 subway line to serve the community, an almost certain ferry service in the future, and lovely tree-lined streets and two excellent elementary schools, this area should be obtaining prices close to its southern cousin, Whitestone, which boasts some of the highest one- and two-family home prices in northeast Queens. Buy here now, and you’re in for a great surprise in six to 10 years for resale.
How is Queens doing in relation to the rest of the New York City market?
Queens follows the lead of Manhattan in its real estate cycle. There has been a slight 4 to 7 percent adjustment in prices over 2006. Manhattan saw similar softening, and both are rebounding in the New Year.
Will prices rise or drop in Queens this year and why?
I believe prices will firm up where they are in the moderate to lower ranges and you may even see a slight price gain if inventory [growth] slows.
In the Queens luxury and new construction markets you’ll see continued softening as the Long Island markets continue to entice buyers who want great schools and lots of extracurricular activities for their kids. New York City public schools just don’t offer enough in the way of clubs, extensive sports and funding, so luxury buyers see prices coming down in areas like Manhasset, and we compete with that market.
Any market segments surprisingly active or inactive compared to years past?
The market that has been impacted the most is the new construction market. With so much overdevelopment, builders have to price really right to compete. Buyers on the high end want land — a 60-by-100-foot [lot] minimum. And many homes were built over the past two years on much less. However, there is an unusually strong demand for homes or lots of land that an individual buyer can build for their own home use.
The co-op market has also adjusted downward by more than the area average of 4 to 7 percent. Many large co-op developments have handed down the elevated costs of energy and added so-called temporary assessments that have skyrocketed maintenance costs. Single buyers and young couple buyers have limited monthly paying power and so the prices have had to be more competitive to keep up with affordability.
What sort of buyers or sellers are you seeing that you didn’t in the past?
I’m seeing more young couples confident again in home ownership. I am selling to gay couples in Queens as well. The neighborhood I serve attracts a lot of people who want a quiet lifestyle minutes from the cool neighborhoods of Manhattan. I can get to the Lower East Side by car on a Friday night in 20 minutes. The Asian market continues to grow in our area, and what I love to see is the inclusiveness of the communities I serve. We also enjoy the eastward move from people who are selling in Elmhurst and Jackson Heights and are moving to College Point, Whitestone and Bayside, as a migration to a more suburban lifestyle than they had.
Jon McMillan
director of planning, Rockrose Development; building the seven-tower East Coast project on the Long Island City waterfront
What is the most interesting trend you see in the residential market right now?
We are by far the largest presence in Long Island City in terms of residential projects. But there are also 38 small-scale infill condo projects that are inserting themselves into the existing fabric of Hunters Point and not changing the fundamental character of that area.
How is Queens doing in relation to the rest of the New York City market?
Very well. Those 38 condo projects that we are monitoring are selling very well. Prices aren’t falling. Developers are not being flexible. They believe the demand is strong and no one is lowering their price. There is no post-boom scenario that we have seen in rentals either. They have sustained quite well. Ten years ago there wasn’t anything there at all. The new market that has emerged in the short period of a year has done terrifically well despite the fact that it’s an enormous supply hitting the market all at once. There seems to be plenty of people that want to live in Long Island City relative to what is being produced.
What is the most negative trend you are noticing right now?
The lack of any office market development. The city had rezoned the area around Queens Plaza and Court Square [to facilitate commercial development]. The Citicorp building is there and they are building another. For reasons we don’t understand no one else is building. MetLife is moving a lot of people back to Manhattan. It cost as much to build an office building as in Manhattan because the unions are the same; there aren’t the cost advantages as in New Jersey. We can’t attract people from Manhattan yet.
What do you think is going well now?
Retail is finally catching up with residential development. We have been there for a while and it was difficult to convince retailers that they should be there. Now we are getting multiple bids for supermarkets and there are more boutiques on Vernon Boulevard, which is one block behind the waterfront. It is the Bedford Avenue of Long Island City.
What is the most underrated part of Queens?
Newtown Creek, which separates Brooklyn and Queens; neighborhood organizations are starting to form to clean things up. Right now it is run down, but in a decade it’s going to be a fabulous place to live and it will be ripe for development. It needs a pedestrian bridge so people can get back and forth. Right now it’s hard to move between Long Island City, Greenpoint and Williamsburg. [Developer] George Klein has proposed a pedestrian bridge by architect Santiago Calatrava to solve this.
Also, the southern half of Queens West to Newtown Creek is being bought by the city, and they are planning to build something middle-income — like a new Stuyvesant Town. It remains to be seen if they can pull it off. They wouldn’t be in direct competition with our units because of a different pricing structure.
Kara Kasper
vice president, the Corcoran Group; marketing 44-27 Purves Street condo in Long Island City
What is the most overrated part of Queens right now? What is the most underrated?
Queens as an entire borough is underrated. Nothing has even approached the level of irrational fetishizing you’ll find throughout New York. Long Island City is the hot-ticket neighborhood by far. The most artsy, the most high-rises, the most views and the most luxury. I think everyone expects Long Island City to be the Brooklyn Heights of Queens, and as buyers get priced out of it we’ll watch its neighbors grow. So those neighborhoods are Jackson Heights and greater Astoria. But right now Long Island City is still undervalued, so I think that’s out a few years.
What do you think will happen with prices in Queens this year?
This year I think prices will be relatively stable or creeping upwards.
In the following year all the buildings that are selling now will close [their sales], resulting in a large influx of people all at once. I expect that transition from fairly desolate streets to largely pedestrian-filled streets to happen quickly, and then I think the prices will make a big jump.
Any market segments surprisingly active or inactive these days?
You see price point issues. There is a seemingly endless pool of $300,000 apartment buyers. By about $700,000 your buyers will start getting more selective.
What sort of buyers did you once see that don’t show up now?
The first buyers that came out were the people who have been happily renting in the area. There was nothing to buy there for years. Rather — unless you were willing to buy a co-op with some nefariously high monthly charges — there was nothing.
What surprises you most about the current market?
The diversity of the buyers: The lifetime Upper East Sider looking for their dream waterfront loft and ready to move to go get it. The young and frugal real estate investor buying a studio to live in and another one to rent, the retired empty nesters ready to unload the high maintenance house in Long Island and spend their golden years going to the theater and museums, the United Nations crowd and the artsy hipster crowd.
“Queens” used to be a dirty word. A word that conjured up images of George Costanza’s parents on “Seinfeld.” A word most Manhattan real estate agents were scared of. Now we are seeing that word reinvented.
Tom Donovan
managing partner, Massey Knakal Realty Services in Forest Hills
What is the most interesting trend in the Queens residential market?
A bunch of large residential portfolios have traded in the last sixth months. These portfolios have principally been sold to buyers with institutional money backing them. In October, Nathan Katz sold 32 properties with 2,252 apartments. [Other recent portfolios sales included portfolios of around 1,200 and 700 units.]
I think they sold because the market has remained constant. The new owners are going to take a more institutional approach to management to try to maximize the rent rolls such as renovating the building to bring new life to the property. They intend to keep them as rentals. As far as condos, there have been a few, such as the Windsor in Forest Hills, where sales have exceeded the developer’s expectations.
What is the most overrated part of Queens? What is the most underrated?
The entire borough has been underrated.
How is Queens doing in relation to the rest of the New York City market?
Queens is doing well, with a less than 2 percent vacancy rate. Single-family, two-family homes and condo buildings are strong, based on the market of people born and raised in Queens who want to remain here. They are looking for a better lifestyle in a better part of the neighborhood.
Which has been the strongest neighborhood in the post-boom market?
Woodside and Sunnyside have been surprisingly strong. They are good, strong, safe neighborhoods that have come into their own. People are recognizing that it is a good place to live with good transportation.
Where is the best area for new condo development?
Anywhere within walking distance to the subway. Areas like Long Island City, Forest Hills, Astoria, Jackson Heights, Woodside, Sunnyside and Rego Park. There are long major thoroughfares that have kind of lagged behind Manhattan and Brooklyn, but there are quite a few projects scheduled to come online later in 2007. I think that they will do well. Queens has a low vacancy rate and is still an underserved market.
Where is the most overlooked area?
Ridgewood and Glendale. There are a few projects that have been developed, but I think that more can happen there. Those areas are not as readily accessible as some of the northern areas of Queens, and they are not overly publicized. People who live there like it but there is not a lot of outside attention brought to the neighborhood. People barely know it exists outside of the people that live, work and own there.
What sort of buyers did you once see that don’t show up now?
We are seeing sellers from some of the old school real estate families who have been putting assets on the market. The market is still fairly near an all-time high, and prices have not dropped. They feel it might be the time to sell. We are seeing established long-term owners buying property as well. What we are not seeing is new people entering the market that are speculating. There are less first-time buyers that aren’t established and they are having a more difficult time breaking into the market due to price point and lack of available properties for sale.
It’s the value-added buyers who see an asset that may be labor intensive; they add a floor, renovate. They are the strong buyers.