After Amazon Reversal, LIC Real Estate Could See Whiplash: Report

LONG ISLAND CITY, QUEENS - The Long Island City real estate market is bracing itself for drops in asking prices and buyer interest after Amazon announced yesterday it was canceling plans for a sprawling campus in the Queens neighborhood.

Amazon's announcement in November that it would build its HQ2 in Long Island City had adrenalized the real estate market there. Nearly a fifth of homes for sale increased their prices, according to real estate listing site StreetEasy. (Midtown East also saw a bump.) Since November, home buyers signed 135 contractsfor Long Island City residences, compared with 48 contracts during the same timeframe the year before, the Wall Street Journal reported.

“Long Island City’s housing market will likely experience a bit of whiplash as a result of this latest news," StreetEasy economic data analyst Nancy Wu said. "Now that the company has decided against setting up their new headquarters in Queens, we expect asking prices and buyer interest to fairly quickly revert back to their pre-announcement levels."

Amazon's reversal highlights the risks of speculative real estate investment, Wu added. Buyers' interest in Long Island City — which StreetEasy measured using search traffic — spiked after the news leaked that the retail giant was eyeing the neighborhood for its HQ2. The Long Island City real estate market had previously struggled.

"Investors are moving quickly to place bets on Amazon reshaping western Queens," StreetEasy economist Greg Long said in November. "Those who may already have been considering a move to Long Island City are under more pressure now, ahead of the rise in prices likely to come amid heightened interest from those looking to make a quick buck."

(Lead image: A warehouse is seen in Long Island City with the Manhattan skyline in the background in November, 2018. Photo by Mark Lennihan/Associated Press)