Yorkville Sees Spike in Sales With 2nd Ave. Subway Coming, Experts Say
UPPER EAST SIDE — The lure of the Second Avenue subway has already led to a spike in real estate prices in Yorkville, as buyers increasingly see the neighborhood as a smart bet.
The area running from East 79th Street to East 96th Street, east of Lexington Avenue, has seen a steep rise in sales activity compared to the rest of Manhattan, according to data from Jonathan Miller of Miller Samuel Real Estate Appraisers & Consultants.
Miller compared residential sales activity for the first quarter of 2014 to sales during the same period in 2008, before the recession fully hit city housing prices.
While Manhattan saw an almost 45-percent increase in sales activity, Yorkville more than tripled that, with a 146-percent increase in sales during the first quarter of this year. In addition, the median sale price in Yorkville rose by almost 13 percent, compared to only 3 percent for Manhattan overall, Miller said.
"This has been building over the past few years because we're moving closer to this 2016 date when the subway is supposed to be up and running," Miller said. "The average span of home ownership is seven to 10 years, so people buying now see that they'll enjoy that transportation access for most of the time they live there."
According to Miller, Yorkville also saw a larger increase in sales activity than other comparable neighborhoods. In Carnegie Hill, sales increased by 25 percent. In the combined area of Morningside and Hamilton Heights, sales dropped by 7 percent, Miller found.
Yorkville has historically seen much lower housing prices than the tonier blocks of the Upper East Side from Lexington Avenue to Fifth Avenues.
Ammanda Espinal, a Douglas Elliman agent who represents the luxury condo building Azure at East 91st Street and First Avenue, has noticed the change on the ground level. She said she's seen a 15-percent increase in prices for apartments in Azure over this same time last year.
“For a long time, people weren’t willing to come to the 90s or to look east of Third Avenue, but they are now,” Espinal said. “What we’re seeing is that a lot of buyers are interested in the neighborhood because the subway is being developed.”
Espinal said the promise of the Second Avenue line, which is set to start running in 2016, is also attracting new upmarket businesses.
“We’re seeing new restaurants opening along Second Avenue — The Writing Room, Infirmary — places that are a little more high-end,” she said. “They are positioning themselves now with long-term leases so that they are a part of the neighborhood as it grows.”
Businesses are also beginning to venture above East 86th Street, previously a line that many high-end retailers did not want to cross. Whole Foods Market announced in 2012 that it would open a 38,000-square-foot store on Third Avenue and 87th Street. Maison Kayser, the French bakery chain, recently signed a 15-year lease to open a second Upper East Side location, just across the street from the planned Whole Foods. And Equinox Gym will open a branch at 205 E. 92nd St., in the high-rise development Related Companies is building there.
Though more people have been buying in Yorkville, rents have not risen, Miller said. Average rents on the Upper East Side as a whole were in decline in the second half of last year, decreasing four times in the five-month period from June to October of 2013.
While the coming subway line is appealing for buyers, it isn't a draw for renters, Miller said.
“Rentals have a one- to two-year window, so people may be less likely to put up with the inconveniences of the subway construction because they don’t see any long-term benefit at this point,” he said.
However, Miller believes that will change.
“It’s a little early to see the increase in rents now, but I think that will happen as we edge closer to 2016,” he said.