July 27, 2016 By Christian Murray
Several luxury buildings opened in Long Island City in the past quarter putting downward pressure on rental prices.
In the past quarter, 22-22 Jackson Avenue hit the market; so too did Halo LIC at 44-41 Purves Street; The Baker House at 41-07 Crescent Street; the Lunar at 42-15 Crescent Street; and other Long Island City developments.
“Close to 1,000 units opened in the quarter,” said Eric Benaim, chief executive of Modern Spaces, which released its second quarter market report this week.
The average rent for a luxury Long Island City apartment softened during the second quarter, compared to the same three months one year prior (click for report).
The amount paid for a studio was $2,473, down nearly 3 percent from 2Q2015. The average price paid for a one-bedroom unit was $3,143, about the same as 2Q2015.
Meanwhile, the average paid for a two-bedroom unit was $4,338, down 9 percent compared to 2Q2015, while three bedrooms fell 14 percent to $5,755.
Benaim said that the softening represents a wave of new buildings that have come to market and anticipates that rental prices will level off later this year when it’s absorbed.
However, the market may soften again, Benaim said, when several new buildings open next year.
At least 2,000 luxury rental units are expected to come to market in 2017, Benaim said, as a number of developments are expected to be completed.
Rockrose’s project at 43-25 Hunter Street; the Watermark Court Square project on 44th Drive; Brause Realty’s Purves Street project; and an array of Queens Plaza buildings are all expected to open.
The market for condos appeared brighter, according to the report.
The average amount paid for a condo during the second quarter was $1,178,304, up 26 percent from $935,422 in 2Q15. However, the increase was, in part, due to the number of larger apartments sold.
In the past quarter, 62 percent of the units sold were two bedrooms and 9 percent were three bedrooms. In 2Q15, there were no three bedrooms sold and 57 percent of the units sold were 2 bedroom.
The average price paid for a two-bedroom condo in the quarter was $1,177,695, almost unchanged from the same quarter a year ago. That number was $1,188,182.
Benaim said the two-bedroom numbers were flat because more inventory was available. Typically, inventory is tight.