The Williamsburg real estate market was ready to take an L after the Metropolitan Transportation Authority announced three years ago that it would close the L-train for 15 months to make repairs on the tunnel that was ravaged by Hurricane Sandy in 2012.
Waiting seven years to begin repairs from a hurricane made it seem like the MTA was holding off until they couldn’t hold off any longer. The L-train is vital to New York City’s transportation system. Any disruption of the L can have severe impacts on the rest of the subway system, hence the MTA’s decision to wait so long to make repairs.
After the MTA’s announcement to shut down the L-train, hundreds of thousands of New Yorkers began to make alternative plans. Commute times would be doubled and other modes of transportation would become more crowded. The train’s estimated 400,000 daily riders were beginning to brace for 15 months of hell. Williamsburg, Brooklyn has two stations that are among the busiest stops on the L-train, spelling out chaos for the local real estate market and transit. Simply put, New Yorkers wanted out of Williamsburg.
However, it seems as if the transit apocalypse has been avoided for now. On January 3rd, Governor Andrew Cuomo announced that the L-train will not be shutting down, which sent the entire city into shock. Now, just three months before the scheduled repairs were due to originally take place, the entire repair strategy has changed. The new plan will allow the train to run during weekdays while repairs will force the tunnel to only close on weekends and some weeknights.
While this is great news for Williamsburg residents and other New Yorkers who rely on the L, many have begun to worry that the overall timeline for repairs will be extended. Yet, the newly proposed method of repairing the tunnel could allow the project to be completed within 15 to 20 months. There is still a lot of uncertainty on the timeline of the whole project altogether. Why this plan is being enacted so close to the originally scheduled closure and wasn’t thought of much earlier in the process has many New Yorkers questioning the decision. If there is one thing that we know about the New York City subway system, it’s that nothing is guaranteed. Only time will tell how this new plan impacts the city.
Among multiple concerns and questions looming about the newly proposed plan, the real estate world has rejoiced— for now. After the initial announcement for a full closure was made in 2016, buyers, renters, developers and brokers began to panic. Residents currently living in the neighborhood worried that they would have to move in order to keep their commute times the same. Agents and brokers feared that lack of demand would drive down prices. Post-closure announcement, pricing dropped slightly in the neighborhood and began to accelerate as the April closure neared. Some listings were even taken off the market in hopes to put them back on once the market corrected itself. Buildings that once touted proximity to the L-train as an unofficial amenity were scrambling to find other ways to lure buyers and renters as the shutdown loomed.
Transit infrastructure and accessibility are two very important factors that can impact consumer decisions and real estate values quite drastically. Transportation is viewed as an amenity to many, and when you take that away, there is a cost.
Overall, rental prices in the neighborhood decreased slightly throughout 2018. While new development rental pricing also decreased slightly, it has stayed more steady than the rest of the rental market since the shutdown was announced. Although Williamsburg has been seeing increased development recently and supply is high, the steady pricing in the new development sector can be attributed to amenity-filled buildings. Unlike older apartment buildings, new developments have the ability to offer tenants more. For example, Level BK, located on the Williamsburg waterfront, offers residents a massive floor of amenities that include indoor and outdoor pools, a fitness center, a roof deck with fireplaces and grills, dry cleaning and housekeeping services, a business center and much more. They are even offering three months free on all units for new clients. When a convenience like a train goes away, people get worried. However, when a building is able to offer enticing amenities and incentives, the option to stay starts to seem more attractive.
Pricing for condos also decreased slightly throughout 2018. Buyers were not only turned off by the lack of transportation, but were also more likely to invest in Williamsburg closer to the end of the repairs, when they could buy at a lower price point and be inconvenienced for less time. While pricing for new developments did drop slightly amidst rising prices throughout the rest of the borough, it would take more than a temporary train shutdown to count Williamsburg out of the real estate game.
Now that the crisis has been averted, landlords and developers will be trying to make up for their losses. The key: don’t get too greedy too fast. No one will be willing to pay 5 or 10 per cent more overnight. As more questions are answered and uncertainty about the new plan becomes a thing of the past, buyers and renters are expected to warm up a little. Regardless, developers and landlords now have the upper hand and will be eager to recover their losses, so don’t be surprised if prices rises sharper than expected. On the other hand, the uncertainty that still lies ahead could cause confusion for the market and keep pricing relatively low in the short-term. When all is said and done, Williamsburg is still poised to be an extremely attractive market for years to come as the neighborhood’s development boom continues.
The ability of the Williamsburg market to hold steadier than predictions speaks to the neighborhood’s strength. Sales and leases are still not far off from record highs and are expected to continue upwards in the coming years. Other nearby markets that were betting on the L-train shutdown will now face more competition. The Long Island City market has been extremely hot as of late, but some of that interest could roll over into Greenpoint and Williamsburg now that the L is back. For now, the L-pocalypse has been avoided and developers are back in the game.
There are currently 172 new home developments listed on BuzzBuzzHome in Williamsburg that are in different stages of development. Here’s a look at some significant upcoming developments in the neighborhood poised to benefit from the L-effect.
Estimated Completion: Spring 2019
Developed by: Adam America and Naveh Shuster
Designed by: Issac & Stern
Sales: Douglas Elliman
147 Hope Street
123 Hope Street
Estimated Completion: 2019
Developed by: Spitzer Enterprises
Designed by: ODA
Leasing: Citi Habitats
Other notable projects in the neighborhood include Union BK, 33 Conselyea, 187 Kent, 200 South 3rd Street, 625 and 658 Driggs, 28 Roebling, 848 Lorimer, 510 Driggs, 172 Montrose, and 199 Montrose.
To learn more about the Williamsburg market and other NYC markets, click here.