Jan
23

Along Second Ave., a good time to rent (or buy?)

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As subway construction along Second Ave. marches forward, residents have been up in arms over just about everything. There’s constant construction, noise, dirt, debris, blasting, smoke, drilling. You name it, and it’s happening as the MTA works to buil a subway line through a densely populated area. Businesses are shuttering, and people want to move out. But for the hardy among us who can withstand the area, it might not be a bad time to move in.

Conventional and practical wisdom in the New York real estate market often focuses around accessibility. Brokers and the folks who post to Craigslist tout the nearest subway stop, and we wear our commutes as badges of honor or disgrace. I have friends who will live only so many blocks away from the nearest subway stops, and express stations command a premium.

Lately, the Upper East Side along Second Ave., once a desirable place to live, has seen a market downturn. Sean Creamer for Our Town profiled the state of the market last week. He writes:

Commercial tenants who rent 700 square feet would pay $5,200-5,600 under regular rent conditions, but now that the construction has curbed business, the same renters pay $3,200-3,700 and businesses are “still struggling,” [real estate manager Andre Soto] said.

Even residential properties have been discounted in the construction zones. On average, a one-bedroom apartment in one of Soto’s buildings on the Upper East Side would go for $1,100-$2,200, and a two-bedroom would go for anywhere between $1,800 and $2,800. Soto has lowered rents by 30 percent in the areas that are at the mercy of subway construction because of the volume of complaints filed by residents…

Although the problems with the subway construction have caused some people to move, they have opened the market on the Upper East Side to a younger generation willing to deal with the clamor in exchange for lowered rents. Because of the proximity to the hustle and bustle of Second Avenue and the cheaper rents, many more young professionals have come in, according to Norman Shakner, a realtor from A.C. Lawrence Realty. He noted that real estate in the area is booming because of the prospect of having a train line in the future and the fact that proprietors are driving down prices to fill empty apartments.

Renting near the Second Ave. subway construction might not be the best life decision right now. The trains are not enter projected to enter revenue service until at least the end of 2016, and another 59 months of subway construction can lead to many an explosion and numerous sleepless nights. But for those with the money and the patience, buying on the Upper East Side may be a sound investment.

Over the course of New York City history, real estate booms in newly accessible areas have generally followed the subway as it opened. The Upper West Side grew up out of the El trains and IRT in the late 1800s and early 1900s. Large swaths of Queens came to life as the Flushing Line opened. While the Upper East Side is already a well-developed neighborhood, it will become even more desirable once the subway opens, and travel times to midtown, Union Square and beyond are cut considerably.

For now, though, a promise of that increase in value and a lifeline for a neighborhood under siege is a long way off. Those who have lived through four years of work know what it’s like, but another five years is a rather long time indeed. “The new subway is going to take the Lexington Avenue crowd and bring them over to Second Avenue,” Mahoud Ahmed, who works at Ray’s Pizza, said. “Once the train is done, it will bring more business to the area.”



24 Responses to “Along Second Ave., a good time to rent (or buy?)”

  1. I think it would be a great time to buy. This down market won’t be down forever and the construction is keeping prices down. In 5 years it will all be a distant memory.

  2. Ed says:

    Except that real estate prices are still far to inflated (by government policies, no less!). But if you are going to by in New York, that stretch of Second Avenue is the place to do it. I have a rent stabilized apartment just a little further downtown, and I worry about the building converting to non-rent stabilized status once the subway is finished and real estate values start rising again. Then again, the way the deadlines keep getting put back I might die before the subway is finished so I probably have nothing to worry about.

  3. Bill Reese says:

    It’s still four plus years away, but I would guess that most of the “dirty work”——drilling, blasting, air quality issues——is behind us. The last 2 years of work will probably involve cosmetic work, running test trains, completing the stations. Long term, it would be a great investment… if I had the money…

    • LisaAnn says:

      Lucky guess, Bill but not a correct one. Not at all. It’s a mess. And to have a business between 96 and 69th streets is not fun, and if its in the ranges of 91st to 96th or 69th to 76th streets, it’s dead or dying. And I feel VERY sorry for them–the city hasn’t nearly done enough to help them, or compensate their losses. The construction has already been delayed 4 years as of now–if its delayed again then real estate value will really plummet.
      The title of this article is quite rhetorical.

  4. ajedrez says:

    Well, renting there is a chance to get a decent neighborhood that’s somewhat near a subway line (It’s like a quarter mile from Lexington Avenue, which is better than a lot of outer borough neighborhoods) if you don’t mind the noise.

    • …if you don’t mind the noise.

      Other than that, how was the play, Mrs. Lincoln?

      • SEAN says:

        It was fine, but I rather see Rachel McAdams in the lead roll.

        Seriously, once the subway opens, this neighborhood will be a buz with new activity. It’s just the nature of new transit services & real estate development.

      • ajedrez says:

        What’s your point? It’s a trade-off. Moving into that neighborhood could mean that you get a larger apartment, or a better neighborhood (E.g. I can move to the UES or the LES for the same price. The LES has more crime, but the UES has more noise. I’m just using this as an example), or the prestige of saying “I live on the UES”.

        • Bolwerk says:

          I was guessing he was saying noise was a show-stopper?

          They probably both have about the same noise, and the crime just tends to be more white collar on the UES. And on the UES, you’re perhaps more likely to get an apartment with fairly modern sound proofing. Most of the benefits I see of living there are in status, not in convenience.

          For that matter, automobile-generated noise is less than rare just about anywhere in the city that has a modicum of convenience. :-|

  5. Hank says:

    I bought over on 1st for this very reason… But I also DIDN’T buy on 2nd for this very reason.

    I’m glad to hear landlords are playing ball with 2nd Ave bizzes, as they ultimately stand to benefit the most from this. For my part, I try and patronize 2nd ave as much as possible. Hopefully the mini-boom that comes in 4 years will be enough to get the political will together to fund phases 2 and 3.

  6. Tsuyoshi says:

    Property further downtown will benefit as well. Remember that the advantage of having an office or a store in Midtown is fundamentally that it’s accessible by transit to a large number of people.

    Since the portion connecting to the Broadway Line is most likely going to be finished, the value of property in Midtown West should also go up.

    • Hank says:

      Completely agreed. Midtown West and the area around Weil Cornell and Rockefeller U will see the biggest benefits from Phase 1.

  7. Kathleen Brady says:

    Ceilings and chandeliers have fallen down in apartments near construction and new cracks in apartment are a daily occurrence. MTA already acknowledges that “mistakes were made” in regard to construction/demolition/drilling. Property values will not rise if the buildings start to fall and crack and are regarded as generally unstable. Look for that in the years to come. The noise will be over but problems will really begin..

    • Bolwerk says:

      Too true. It would be best if we just got rid of all these silly choo choos and made everyone drive.

      • Kathleen Brady says:

        It would be better if we had light rail — it would have cost $1 million per mile to build vs. $1 billion per mile — a savings for tax payers. Anyway, the question is not about whether the subway to 62nd Street is a good buy — the question whether Second Avenue will be a viable place to live in the event that construction ever ends.

        • Andrew says:

          Light rail doesn’t have the passenger capacity for the anticipated loads. Light rail is also a lot slower than subway service.

          Yes, the construction has been going on for a long time, but it’s temporary. Second Avenue will recover, and it will be better than ever before once it has transit access.

        • Bolwerk says:

          I think Andrew is mostly right. I can see why there should be light rail and heavy rail, though he’d probably disagree with me on that.

          Honestly, the whole reason they seem to be doing this cockamamie tunneling is so Second Avenue won’t look much different when the tunneling ends – and of course it was politically easier to not cut and cover. I think the sane thing would have been to just cut and cover the damn thing. It might have taken months of diverted traffic, but that’s better than years of blasting and excavating from the same huge hole. And much of it could be behind us now.

          • Nathanael says:

            Yeah — except that there were so many substandard buildings in need of foundation repair. They would’ve ALL fallen over with cut-and-cover.

    • Nathanael says:

      It would be better if the landlords had maintained the buildings on Second Avenue the way they were supposed to.

      The MTA made the assumption that the buildings on Second Avenue were up to the seismic status on the records.

      They weren’t. Large numbers of them were in gross disrepair when the MTA started digging. It absolutely wasn’t the MTA’s fault that the shoddy, badly maintained junk buildings started falling apart — it was the fault of the landlords and the NYC Department of Buildings. Of course, *while the faults were already on record and admitted*, both refused to do anything, so the MTA ended up having to pay for problems which really have nothing to do with it at all.

      As you can see, I find the whole situation more than slightly disgusting. Just goes to show that landlords in NYC are often cheap, irresponsible scum, and the Department of Buildings is not interested in doing its job. Anyone trying to fix either of those problems?….

      • Kathleen Brady says:

        Nathaniel makes some great points, but if the MTA assumed that all the buildings were in perfect repair, they were grossly negligent.

Trackbacks/Pingbacks

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  2. [...] on the Second Ave. real estate scene earlier this year, the residential market seemed to promise a god time to rent or buy for those who could wait out the construction. With rates dropping along the subway’s path, [...]

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