Long Island Real Estate Market Dodges Hurricane Shortfalls
Published on February 6, 2013 · Filed Under Business
(Long Island, NY) Disaster has long been known to directly affect a real estate market regardless of its area. Places that experience a natural disaster are often shunned by potential buyers and renters; mainly due to the fear that another storm could occur nearby or that insurance rates related to living in storm torn areas would be astronomical. New York City and Long Island, however, continue to prove unique in their own way.
In the wake of Hurricane Sandy, the real estate outlook on Long Island has somehow managed to survive. It’s important to note, however, that the Long Island market has been consistently improving long before Sandy. Many attribute this fact to residents being “priced out” of the Manhattan area.
Just look at the real estate prices around Long Island, especially in places such as Astoria or Long Island City. One rental property in Long Island City, for instance, has upscale two bedroom apartments for around $3,000 a month. The same apartment in Manhattan would set you back $5,000 while Long Island provides many of the same benefits that Manhattan would, such as a lovely view of the city skyline and/or close proximity to the water.
There’s no doubt that Hurricane Sandy had a tremendous effect on every resident of New York City, but the effect isn’t nearly as pronounced on Long Island as it is in other disaster stricken areas throughout the country. When Hurricane Katrina hit New Orleans, for instance, many simply walked away from the area and never looked back. Sandy, however, is viewed by Long Islanders as a once in a lifetime occurrence with buyers still flocking to Long Island. Long Beach, for instance, has seen an inflow of buyers coming in with hopes of snatching up prime real estate at discounted prices.
Home sales declined a bit near the end of 2012, but this, said Tom Hagen from Keystone Realty USA, “is likely caused by homeowners removing their properties from the market in an effort to handle hurricane repairs” he said. “Still, many people are flocking to the south shore simply for the chance to buy pristine properties at low prices” he added. Hagen, also himself an investor, has been in the real estate market for 18 years.
Nassau County is a great example of climbing real estate values on Long Island. In 2011, for instance, a home on the south shore would set a person back $402,709; by 2012, this number had jumped to $453,172. The north shore saw an even greater increase. An average home in 2011 cost $858,592 on the north shore; by 2012, this figure had jumped up to $969,769. These numbers show a strong market likely fueled by an exodus from high prices in Manhattan.
Further east, the area of Astoria shows steeply increasing home values. Square foot prices in Long Island City went up $32 from 2011 to 2012 while rent raised about $50. The average price for a one bedroom property in Astoria was $387,786 in 2012, and in Long Island City, this number stood at $501,732. A report from a Long Island brokerage firm Keystone Realty USA shows housing prices rising in both areas. Since Long Island City was the first go-to place for New Yorkers priced out of the market with Astoria seeing development of many new properties, including upscale housing units, in an effort to supply homes for those who can no longer find it in Long Island City.
While it’s true that most of New York City’s real estate took a minor setback after Hurricane Sandy, the disaster certainly didn’t kill the market. New York has always been well-equipped at bouncing back from disasters, and in the case of this hurricane, created an influx of potential investors. If the current trend in real estate continues, it’s very likely that Long Island could be viewed as the “new Manhattan.”