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MTA Cuts Hinder Home Sales
SEPTEMBER 10, 2010
By MELANIE LEFKOWITZ
Read More: http://online.wsj.com/article/SB10001424052748703453804575479780527798198.html
Vickie Palmos, a broker in Astoria, Queens, recently found a buyer willing to pay $999,000 cash for a brand-new penthouse condo listed at $1.1 million. "She fell in love with the apartment," Ms. Palmos recalled. The 1,264-square-foot condo in the East River Tower has two bedrooms, a balcony with a view of the Manhattan skyline, a doorman, a fitness center and parking. The biggest drawback: a 20-minute walk to the nearest subway. The buyer, however, was counting on taking the express bus into Manhattan, which stopped nearby on 21st Street. Except it doesn't exist anymore.
- The QM22, an express bus that ran from Jackson Heights into midtown, snaking through Astoria and Long Island City on the way, was among the casualties of the Metropolitan Transportation Authority's most recent round of budget cuts. So when Ms. Palmos's buyer found out about a month ago that the route was axed, the penthouse deal went the way of the express bus. "There are a lot of buildings around here that depended on having the express bus," Ms. Palmos said. "That killed off sales for us over in that building. … for the people who are looking to get in and out of Manhattan quickly it's going to be a tough sell. People aren't willing to walk that far."
- Real-estate data compiled by StreetEasy.com show a dropoff in sales in some neighborhoods along the bus routes since they ended this summer. In Kensington and Ditmas Park, Brooklyn, where condo buildings along Coney Island Avenue and Ocean Parkway can be a half-mile walk from the nearest subway, the X29 stops on Coney Island Avenue could mean a quick ride into Manhattan. That bus was cut. The number of home sales dropped 60% in Kensington and 83% in Ditmas Park between July 2009 and June, when bus service ended, but that is likely due to a spike in June when the first-time home-buyer tax credit expired.
- Not every neighborhood where the buses ran is affected. For example, Jackson Heights, where the QM22 culminated, has been relatively untouched because of easy proximity to several subway lines. Other neighborhoods farther from Manhattan already appeal primarily to those who commute by car to jobs in the other four boroughs or nearby suburbs. But in more far-flung, gentrifying areas, where buyers were willing to accommodate longer commutes in exchange for bargains, brokers say they are already feeling some pain.
- But one more inconvenience, in an outside-Manhattan neighborhood where the commuting options are perhaps already imperfect, will drag prices down, experts said. Sofia Song, the vice president for research at StreetEasy, said transit cuts in general are unlikely to affect the volume of sales—though they could bring down prices. "I think the changes would need to be pretty drastic, because demand for housing is so high. If you make it more affordable and less convenient, there's still always going to be demand," Ms. Song said.
"The buyer who buys in Astoria is looking for a cheaper price and to get into Manhattan quickly," said Ms. Palmos, adding that she is having the same problem with a condominium building in Upper Ditmars, north of Astoria. Apartments there that she said would have easily sold for $500,000 with the express bus nearby are now languishing on the market at prices about $420,000.
SEPTEMBER 10, 2010
By MELANIE LEFKOWITZ
Read More: http://online.wsj.com/article/SB10001424052748703453804575479780527798198.html
Vickie Palmos, a broker in Astoria, Queens, recently found a buyer willing to pay $999,000 cash for a brand-new penthouse condo listed at $1.1 million. "She fell in love with the apartment," Ms. Palmos recalled. The 1,264-square-foot condo in the East River Tower has two bedrooms, a balcony with a view of the Manhattan skyline, a doorman, a fitness center and parking. The biggest drawback: a 20-minute walk to the nearest subway. The buyer, however, was counting on taking the express bus into Manhattan, which stopped nearby on 21st Street. Except it doesn't exist anymore.
- The QM22, an express bus that ran from Jackson Heights into midtown, snaking through Astoria and Long Island City on the way, was among the casualties of the Metropolitan Transportation Authority's most recent round of budget cuts. So when Ms. Palmos's buyer found out about a month ago that the route was axed, the penthouse deal went the way of the express bus. "There are a lot of buildings around here that depended on having the express bus," Ms. Palmos said. "That killed off sales for us over in that building. … for the people who are looking to get in and out of Manhattan quickly it's going to be a tough sell. People aren't willing to walk that far."
- Real-estate data compiled by StreetEasy.com show a dropoff in sales in some neighborhoods along the bus routes since they ended this summer. In Kensington and Ditmas Park, Brooklyn, where condo buildings along Coney Island Avenue and Ocean Parkway can be a half-mile walk from the nearest subway, the X29 stops on Coney Island Avenue could mean a quick ride into Manhattan. That bus was cut. The number of home sales dropped 60% in Kensington and 83% in Ditmas Park between July 2009 and June, when bus service ended, but that is likely due to a spike in June when the first-time home-buyer tax credit expired.
- Not every neighborhood where the buses ran is affected. For example, Jackson Heights, where the QM22 culminated, has been relatively untouched because of easy proximity to several subway lines. Other neighborhoods farther from Manhattan already appeal primarily to those who commute by car to jobs in the other four boroughs or nearby suburbs. But in more far-flung, gentrifying areas, where buyers were willing to accommodate longer commutes in exchange for bargains, brokers say they are already feeling some pain.
- But one more inconvenience, in an outside-Manhattan neighborhood where the commuting options are perhaps already imperfect, will drag prices down, experts said. Sofia Song, the vice president for research at StreetEasy, said transit cuts in general are unlikely to affect the volume of sales—though they could bring down prices. "I think the changes would need to be pretty drastic, because demand for housing is so high. If you make it more affordable and less convenient, there's still always going to be demand," Ms. Song said.
"The buyer who buys in Astoria is looking for a cheaper price and to get into Manhattan quickly," said Ms. Palmos, adding that she is having the same problem with a condominium building in Upper Ditmars, north of Astoria. Apartments there that she said would have easily sold for $500,000 with the express bus nearby are now languishing on the market at prices about $420,000.