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LIC Residential Pricing Goes Up Despite Amazon’s Absence

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By R. Renwick

Everyone in the know knew that home prices would go up once Amazon moved into its new headquarters in Long Island City.

Well, Amazon did not move into its new headquarters in Long Island City. But home prices went up anyway, according to local experts.

Between the November 2018 announcement that Amazon was planning to open another headquarters location on the Queens Waterfront and the company canceling its plans due to local hysteria whipped up by anti-capitalist Democrat Alexandria Ocasio-Cortez, people were falling all over themselves buying houses there.

But according to Patrick W. Smith, a residential sales broker with Corcoran, 336 condos were sold in the neighborhood in 2019, an increase of more than 15% from the year before — and more than 35% in 2017. Almost half of the condominiums reportedly went to contract within weeks of Amazon pulling out.

“The Amazon effect was real,” Smith told Crain’s New York Business. “It had a major impact on the market in terms of creating a surge of deal activity and upward pressure on prices. We had fancy new developments opening up and selling for the first time and that pushed up the market, but if Amazon hadn’t arrived, that per square foot growth in prices may have been 6% instead of 9%.”

“But even if the Amazon boost proved only a sugar rush, the neighborhood remained among the city’s strongest. StreetEasy predicted in September that Long Island City would be New York’s next “million-dollar neighborhood,” referring to the 17 city locales with a median sales price above $1 million,” Crain’s wrote back in November 2019.

“This time last year, the retail giant announced it would split its second headquarters between two urban industrial sites in Long Island City, Queens, and Crystal City, Virginia, bringing 25,000 jobs and the promise of economic stimulus,” noted Barron’s, also in November. “Overnight, the news unleashed a deluge of speculative house hunting and price increases in the two neighborhoods, as buyers and sellers rushed to capitalize on Amazon’s future presence. That was until Amazon’s about-face in February, when the company announced it would abandon its plans in Long Island City amid wrangling with local politicians who opposed large tax breaks promised to the tech giant.”

“People in Middle America suddenly knew where Long Island City was so if you’re a New York City buyer who wasn’t necessarily paying attention, it certainly put it on your map,” Eric Benaim, the CEO and president of the Long Island City focused residential brokerage Modern Spaces, told Crain’s in the piece. “People are thinking that if LIC was good enough for Amazon, maybe it’s worth a look, so just them selecting the neighborhood has been a big boost to activity and prices here.”

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