Hunters Point South forges ahead; Long Island City and the financial crisis
View from the Gantry condos, Hunters Point, Long Island City
The Long Island City linkage this week is a bit slight in volume, but heavy in content. First up is everyone’s favorite affordable housing development plan, Hunters Point South, which won approval from the City Council’s Planning Commission last week along with Willets Point (another controversial Queens development plan). “The Council has about two months to act, and typically takes much of that time for negotiations with the administration.”
With US lawmakers in the throes of deciding how to solve our pesky little financial crisis, Queens is wondering how the disaster will impact the borough, which currently has over 14 major development projects underway. The reactions are mixed:
” The consensus among several market watchers here is that it’s too early to tell what the fallout will be, but that the borough is fairly well positioned to take what comes. That, they said, is because Queens is a little less dependent on the financial markets than Manhattan is, thrives on the small-business sector and has already absorbed the damage from the housing bubble burst.”
” Foreclosures in Queens are four times higher than normal since the financial crisis began, which is backing up the court system and delaying more that are still to come…”
Ahem. It will be interesting to see how the financial crisis impacts Long Island City specifically, considering the amount of condo stock on the market and in construction. According to many brokers in the neighborhood, the majority of condo buyers in LIC are not from other countries, but rather from Manhattan, outer neighborhoods in Queens, and Long Island. Despite steady and dropping prices, of course we know the buyer’s market that was expected after the height of the bubble has not really manifested, thanks of course to the credit crunch. The ‘foreign buyers’ who are credited with holding Manhattan’s real estate market, are doing just that: buying in Manhattan. Apparently LIC is not quite sexy enough yet.
And lastly, Queens might be buffered somewhat from the financial collapse, but still has some infrastructure fragilities to deal with… notably the flooding problem in several Queens subway lines. The solution? Raised air vents to hit LIC along Northern Blvd, and other Queens locations. Exciting.
Impact of financial crisis on Queens [Queens Chronicle]
Trying to stop the flooding of Queens subway lines [Queens Chronicle]
PS1 going green in Long Island City [GreenbuildingsNYC]
when are rents going down???
Rents are staying where they are b/c now, more than ever, people want to live here. Duane Reade, new streets and waterfront parks, increased #7 trains, wine bars, brick oven pizza places, cafes, etc.
No options for middle school??
wait… so when are the rents going down? i don’t think brick oven pizza is going to correct this financial crisis.
all joking aside, many financial experts are predicting that the housing market will bottom out in 2010. nyc, lic included, should follow suit - although to a lesser degree than the rest of the country due to foreign buyers.
http://www.bizjournals.com/nashville/stories/2008/09/22/daily35.html
foreign buyers do not look at Queens.
Of course they do! If anything Queens has become the foreign buyers wet dream lately.
check the big buildings- they all have more vacancies than usual.
What’s usual? They’re all only a few years old. This has been predicted for over half a decade now. We all knew more buildings were going to be built and that it would take awhile to absorb all those apartments hitting the market at once. No biggie.
3,7,9–all brokers? It only takes one broker to place multiple entries in an attempt to soothe all the realists who have to live here. What the hell do (or does) # 3,7 & 9 actually know? Not really sharing it with us, eh? Something just hit the fan, you know…which also affects foreigners (and presumably their dreams).
Hey Townie. I’ll tell you up front that I am a broker. But, I’ll give you some reality.
First, I am not a fan or a supporter of the Hunters Point South Plan- I am on the record with the City numerous times (just check the scoping session report), that I think the plan is flawed in many way, including, but not limited to:
1- Way too dense. It would take 11 buildings the size of CityLights to fulfill the goal of 5000 units. not to mention “site B”, the Budweiser plant, which would add another couple thousand.
2- This is a wasted opportunity to add much needed park space! The plan does have some park space, but much of it is shoreline and unusable.
3- The idea of subsidized rental housing is undesirable. If there are subsidies, they should be for buying apartments which fosters a whole different sense of community.
4- There is little but lip service and no real plan to deal with transportation issues, namely overcrowding on the 7 train.
These are just a few issues.
More reality- prices in LIC are coming down already. Developers can’t and won’t advertize lower prices (they would have to file amendments which would piss off people already in contract). They may not advertize it, but if you go to just about any development in LIC when you include various incentives (closing costs, closing credits, etc..) you are seeing total discounts of anywhere from 5-15% and in some isolated cases more. On average, prices have come down around 10%. So, as a buyer you have to ask yourself where the bottom would be. Is it 10%? 15%?20%? Everyone has a different idea and comfort level. If you think 10% is the number you should pounce now. If you think it’s 15%, you look for 15% and if you find it, you buy it, if not you wait.
Just my 3 cents…
Hey Andrew. You don’t sound anything like a broker. But thanks for offering “some reality,” which, believe it or not, morons like me have somehow managed to grasp on our own.
It doesn’t seem as if you understood my comment, since you didn’t argue with either declarative statement. In fact, we basically agree the proposals are “flawed” (shit).
You might have mentioned as well the fiction related to the quota for financial relief which reserves most of the units (read: 50.5%) for low income households (recently defined as 20K-99K!). This is typical of the drivel many developers trot out initially when they’re indemnified by taxpayers, whereas the likelihood is these substandard studios on the lower floors and those overlooking the Maspeth skyline and the Newtown Creek (America’s most polluted waterway!) will in the end carry mortgages at the upper limit of that income range, duh. Presumably, the other 49.5% of the units (comprising a FAR greater proportion of the TOTAL available square footage) will go for whatever it takes to cover all the bases (no names please).
Meanwhile, let’s not bring up the bubble. How about those Zip Cars?
Which neighborhoods will take biggest knock?
With New York City’s financial sector freefalling, real estate industry insiders are expecting price drops across the board. But certain neighborhoods will probably be hit harder than others by the chaos on Wall Street.
In the past year, the city’s financial sector has lost approximately 10,000 jobs. Last month — when it was shaken to its core with Lehman Brothers’ bankruptcy filing and purchase by Barclays, Bank of America’s acquisition of Merrill Lynch, JPMorgan’s buyout of Washington Mutual and several other emergency rescue deals — the New York State Department of Labor projected that an additional 40,000 jobs could be eliminated in the coming year.
Barry Hersh, clinical assistant professor at New York University’s Real Estate Institute, said that the direct impact of the layoffs could be felt in a wide variety of neighborhoods, especially those in close proximity to financial services firms. While the swing factor would be how many residents bought in those neighborhoods in expectation of an easy commute, neighborhoods that Hersh mentioned as possibly vulnerable include Midtown near the Plaza Hotel (where a lot of hedge funds are clustered), Long Island City, and even Hoboken.
Look for prices to drop by at least 30% for anything to move now and you must have at least 30-50% down to get a mortgage, that’s how bad the credit market is and will be for a long time. Remember the city comptroller Thompson is forecasting 165,000 jobs being lost in the next two years with the contracting Wall St House of Cards now collapsing. After the wave of pent up demand is satistfied they will be litterally giving away some of these units so to speak….yes it’s called blood on the streets….Don’t get fooled by anyone…if you are sitting on cash you are King……
Wall Street layoffs could surge past 200,000
By JOE BEL BRUNO – 1 day ago
NEW YORK (AP) — Traders and investment bankers might have more to worry about than dwindling bonus pools this year as mass firings on Wall Street are set to hit a record.
The fallout from this year’s global credit crisis has claimed jobs on all corners of Wall Street, from hedge fund managers to floor traders and beyond. More than 110,000 have lost their jobs so far this year, and some industry experts forecast it could come close to 200,000 before the year is over.
Even the financial industry’s biggest name isn’t immune. Goldman Sachs Group Inc., the world’s biggest investment bank, made plans on Thursday to cut 3,200 positions from its staff of 32,000. Barclays Capital is in the midst of purging 3,000 jobs as part of its takeover of Lehman Brothers, and Bank of America Corp.’s acquisition of Merrill Lynch & Co. is sure to add thousands more.
Major U.S. financial companies are getting rid of redundancies caused by this year’s rapid-fire consolidation. They are also adapting to an environment of more regulation, less risk, and dwindling profits.
“Wall Street the way we know it is frankly gone,” said Dr. Michael Williams, dean of the graduate school of business at Touro College in New York. “This was inevitable because there’s just not enough money out there to support the huge staffs these banks and investment banks had before.”
Williams and other analysts believe this next wave of cutbacks will be the biggest the American financial industry has faced since massive bank failures in the 1930s. He believes up to 250,000 financial workers — perhaps even more — could find themselves out of work by the second quarter of next year.
U.S. financial services companies have cut 111,201 positions through September, on top of 153,105 made last year, according to Chicago-based outplacement firm Challenger, Gray & Christmas. The Securities Industry and Financial Markets Association said there are currently 867,400 people employed by their members that include securities firms, brokerages, stock exchanges, and banks.
John Challenger, chief executive of Challenger, Gray & Christmas, said layoffs will surge in the next few months as companies begin to position themselves for 2009. In addition, cutting employees before the year’s end in some cases eliminates hefty bonus payments.
“There’s been heavy layoffs already, but until you see events start to slow down, we’re not out of the woods,” he said. “These companies, even the very best of them like Goldman, are subject to the conditions of much lower activity and much less revenue.”
For the two surviving stand-alone investment banks, Golman Sachs and Morgan Stanley, the business environment might slow as they reshape themselves into companies that more closely resemble retail banks. That means they’ll be more regulated, with greater limits on their ability to take risk.
There also remains uncertainty about how many banks might fail, even with the government’s various bailouts. Banks that have heavy exposure to toxic mortgage investments and other risky bets might collapse or be acquired by healthier banks, in the next year.
Washington Mutual Corp., the Washington-based thrift, is in the process of unloading its retail branches to JPMorgan Chase & Co., and Wachovia Corp. is selling its retail network to Wells Fargo & Co. The number of jobs lost is still unknown from those transactions.
BofA’s acquisition of Merrill Lynch could result in thousands of lost jobs, especially in areas like technology, operations and finance. Both sides are still attempting to map out where the cuts will come from, and there were reports this week that Merrill had already sent pink slips to 500 or more traders in New York.
A spokeswoman for Merrill declined to comment.
A condo glut is definitely imminent in LIC. How could it not be?