August 5, By Christian Murray
While rental prices may be surging at a rapid pace in Long Island City, there are signs that the market might start to normalize.
“I expect the market to start leveling off in terms of rental prices,” said Eric Benaim, the president of Modern Spaces. With all the new supply coming on the market, “we will see healthy growth but not at the same pace.”
Over the course of the next five years, more than 6,000 new rental units (excluding Hunters Point South) are expected to hit the market, which is likely to put pressure on rental prices. Furthermore, as rental prices get closer to those in Manhattan there is likely to be some resistance.
However, the pace in recent years has been fierce. And prices, based on figures released by Modern Spaces’ 2Q14 market report, reflect that.
The amount charged to live in a luxury building—such as a waterfront property to a high-end Court Square development– averages at about $2,600 for a studio; $3,200 for a 1 brm; $4,600 for a 2brm; and $5,800 for a 3brm, according to the report.
This year, 1,000 new luxury rental units that have come to market, with TF Cornerstone’s 4610 Center Boulevard property accounting for 585 of them. In two months, nearly 50% of TF Cornerstone’s 585 units have been leased, Benaim said. “The absorption rate is good. It’s about 40 a week.”
Meanwhile, condo prices continue to soar given the shortage of units. This year only 57 new condos have come onto the market, with only another 46 units expected to be released in the second half, according to Modern Spaces.
“We are seeing the resale [condo] market breaking records,” read the Modern Spaces report. An average studio sold for $426,000; 1 brm $687,000; and 2 brm $1 million.