Amazon announced Thursday that it has halted plans to build a second headquarters in Long Island City, N.Y., blaming political and community opposition for its decision.
The reversal comes three months after Amazon picked two cities as homes for its HQ2 project—Long Island City and Crystal City, Va.—promising to bring 25,000 new, high-paying jobs to each area. A booming housing market in those areas was expected to follow.
Indeed, in the time since Amazon announced its choices on Nov. 13, home prices in Long Island City jumped 10 to 25 percent as buyers rushed to lock in a place, realtor.com® reports. The median home price there is $992,500, which is still below the median price in nearby Manhattan ($1,662,500). Brokers reported buyers making offers via text messages on units they had never seen. Developers had been rushing to add stores and development amid expectations of an influx of new residents.
Commercial and multifamily properties have generated a total of $553 million in sales in Long Island City since Amazon’s HQ2 announcement, according to Reonomy, a real estate data firm. Searches in the firm’s database for properties in the neighborhood have jumped 35.5 percent over the prior period.
"I don't know exactly how far prices will go down, but [Long Island City] will definitely lose momentum," says Danielle Hale, realtor.com®’s chief economist. "It's a short-term setback for Long Island City's housing market. But people are [still] going to be attracted to the area, and it’s got a lot going for it. So in the long run prices and sales will increase.”
Some real estate professionals, however, say Amazon’s second headquarters was never going to be as “transformative” for New York as it would be for a smaller city.
“Amazon’s decision to bring HQ2 to New York City added one more corporate headquarters to a city already full of them,” Constantine Valhouli, cofounder of real estate data firm NeighborhoodX, told Forbes.com.
While real estate pros acknowledge Amazon helped to revive the Long Island City market, they do not think the market will now collapse without Amazon’s presence.
Amazon brought Long Island City to “a world stage,” Rick Rosa, a local real estate professional with Douglas Elliman, told realtor.com®. Now, more potential buyers are familiar with the area. “LIC still won because we got all this free publicity.”
Source: “How Big of a Blow Did Amazon Just Deal Long Island City’s Housing Market?” realtor.com® (Feb. 14, 2019); “Amazon’s Pullout From Queens, N.Y., Stuns Real-Estate Industry,” The Wall Street Journal (Feb. 14, 2019) [Log-in required.]; and “Long Island City Brokers Bemoan Loss of Amazon HQ, But Says Market There Is Still Strong,” Forbes.com (Feb. 14, 2019)
