Long Island City NY - Rental Boom vs Buying
I'm interested to get the perspective of any members in the Long Island City (LIC) area or an outside view of the current market conditions in LIC. LIC has experienced a big boom over the past 10 years. It is right on the other side of the east river from Manhattan making it only one subway stop away from Grand Central. The waterfront near the Pepsi Cola sign has seen a major boom and now the Quennsboro Plaza area, only a few minute walk away is 80% under construction. Literally 80% of all buildings in a 1/4 mile radius are under construction. Approximately 20,000 new rental apartments are under construction.
Current Condition: Demand to live in the area is extremely high, supply limited, rents and home buying prices have continued to increase over the past 5 years at minimum 10% per year.
Question: As supply is positioned to increase dramatically it is expected that rent prices will level off. How will this affect condo/coop prices? One point of view is if renting becomes cheaper than buying the price of condos for sale will also level off. The other point of view is that even though renting will become cheaper the area is going to dramatically improve making the area a hot spot and living in the area very appealing. Based on the appeal dramatically increasing will home prices stay high and/or continue to increase?
There are many variables affecting this area including manhattan prices to buy and rent being totally out of reach even for the wealthy pushing more people to the boroughs including queens and Brooklyn. Also the condition that Brooklyn has already gone through a renaissance of this sorts making Brooklyn extremely expensive as well leaving the next frontier to be Queens, i.e. the Long Island City area.