Buyers searching for space in Long Island City felt pressure to lock in quickly once Amazon’s move seemed imminent.
“People were less negotiable. They were firmer on their prices,” said Carlos Rodriguez, who had been seeking an investment property in Long Island City with Compass agent Natsuko Ikegami prior to Amazon’s announcement. He estimated listing prices shot up at least five percent, a price he “was very willing to pay” for the perceived value Amazon would bring to the neighborhood. He’d agreed to pay over $1 million for a two family house in a bordering neighborhood.
But when Amazon backed out, Rodriguez said he “felt that fundamentally changed the outlook for the area.” Rodriguez asked the seller to shave $40,000 from the price, about the three percent often knocked off in the form of closing cost fees. He felt the price change was justified due to both the results of a house inspection and the Amazon news, but the sellers turned it down. Rodriguez is still looking to buy in the area, albeit with a different approach.
“I’m a little bit more patient now,” he said, adding that he’s willing to wait six to 12 months to move on the right property, instead of the one to two months he was targeting when Amazon announced its move. “There was a little bit of a sense of urgency before.”
Jose Arriola, on the other hand, was looking for a property where his budding family could grow, having spent five years in Long Island City already.
“When we first moved in, there weren’t many local businesses. There was maybe two coffee shops,” Arriola said. Now, “it feels like there’s a new building coming up every month.”
Arriola began his apartment hunt with Compass agent Jessica Meis about a month before Amazon announced its plans to move to the area. Once Amazon selected Long Island City for its new office, he noticed a difference immediately.
“What we saw was a shift in going to an open house where it would be maybe my wife and I, maybe another family, to having to book an open house maybe a month in advance,” Arriola said. “It definitely put pressure on us in trying to find a new place. It didn’t make us want to look elsewhere because we like Long Island City and we wanted to stay there.”
He said he didn’t see an uptick in listing prices, but felt that Amazon’s plans assured sellers they could stand their ground when it came to negotiations.
“They didn’t want to give you any concessions,” Arriola said. He went into contract in December on a two bedroom apartment with a pool, doorman and roof deck for a price in the ballpark of $1 million, just weeks after Amazon announced its move.
“I feel like without the Amazon news, maybe we would have waited a little bit longer,” Arriola said, conceding he may have had more wiggle room in negotiations. But, he realizes, “if we waited a little longer and Amazon never pulled out, perhaps we never would have been able to find an apartment we liked.”
Rodriguez is still mindful of risks he’ll face as a property-owner, like the possibility of an economic downturn, that he thinks would have been mitigated if Amazon had stuck to its plans.
“I just want to close the deal,” Arriola said. “I want to move into the new apartment and just keep living.”