Real Estate

Queens' population, real estate boom makes it look like the next Brooklyn

Long Island City in New York
Richard B. Levine | Corbis | Getty Images

Approximately 10 years ago, 47-year-old sculptor Micki Spiller and her husband purchased a 1930s auto body shop in Woodside, a diverse neighborhood in the New York City borough of Queens, and converted it into a home studio.

Little did Spiller realize that a decade later, she and her family would be in the epicenter of a massive population and demographic shift — not that she's bothered by the transition.

"People are more likely to give up their seat to a pregnant woman on the 7 train than on the 6," Spiller told CNBC in a recent interview, favorably comparing the NYC subway line that runs through Queens to its counterpart that runs through Manhattan, its neighbor to the west.

"It's better in the boroughs," she said. "Queens is not as hip as Manhattan and Brooklyn, and that's just fine by us."

Spiller's story is increasingly typical in one of NYC's fastest-growing areas — Queens, which is perhaps most famous for being home to curmudgeonly television dad Archie Bunker. In recent years, neighborhoods such as Woodside, Sunnyside and Astoria have been the chief beneficiaries of a large population boom, according to U.S. Census Bureau data. In fact, Queens is second only to ultra-hip Brooklyn in terms of its influx of residents since 2010, 2015 Census figures show.

Much like Brooklyn once did, Queens offers refuge to those who can't afford sky-high Manhattan rents and real estate. Yet anecdotal evidence suggests that status may not last long. Some observers say Queens is now in the process of becoming "Brooklynized" by young professionals — whose exodus from soaring rents and home prices has caused a wave of gentrification to crash along the borough's shores.

For city residents, it has long been an article of faith that Brooklyn was once a refuge of first resort for those who can't afford Manhattan real estate. Not so much anymore: A recent Corcoran Group real estate report paints a new reality, one typified by a booming real estate market.

The median price of a home in Brooklyn was $606,000 in the first quarter, a 15 percent increase over the same period one year earlier, with formerly rough working class areas (such as Red Hook, which now houses $4 million single family townhouses and a trendy IKEA store) now among the borough's priciest.

The neighborhood has gotten younger. Now even the dreaded hipsters are moving into Sunnyside. Tattoos, piercings and beards! Oh, my!
Jeremy Kareken
Queens resident

It can be an unsettling effect that Queens residents are just now beginning to contend with, yet experts say all isn't completely lost and affordable options are still available.

Joshua Silverbush, director of market insights at residential development firm The Marketing Directors, told CNBC that neighborhood demographics have changed, thanks to an influx of young professionals and couples.

Housing prices are the main draw. Silverbush cited a median rental price of $2,425 for a Long Island City studio apartment, $2,889 for a one-bedroom, $3,450 for a two-bedroom and $3,825 for a three-bedroom — all far more reasonable than comparable levels in Brooklyn, where the average monthly rent hovers near $3,000.

For those looking to buy in Queens, Silverbush said purchasing an apartment could cost anywhere from $595,000 to $2 million, which would still be cheaper than Manhattan or Brooklyn.

In Queens' Astoria area, real estate prices are considerably lower than those in Long Island City, where a growing crop of start-ups and other businesses are taking root. In the neighborhood, rents range from $1,655 for a studio rental to $949,000 for a three-bedroom apartment purchase.

Shelter for those 'priced out' of Manhattan, Brooklyn

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The trade-off is a slightly longer commute into Manhattan, yet the rising-but-reasonable real estate prices outweigh convenience for many apartment shoppers. The dynamic also applies to Jackson Heights, where there's been a "strong trend of local New Yorkers who have been priced out of Manhattan and Brooklyn flocking to the neighborhood," Marilyn Sollar McCormack, director of sales and leasing for Delta Management, told CNBC recently.

Delta Management, which sells residential space in Jackson Heights, has been busy selling space for Washington Plaza, where sales for more than half of all its 53 residences have already gone into contract since Delta began selling them in May. Washington Plaza is a rental property that is currently being redeveloped into a luxury co-op residence.

Like many others building and developing in these changing neighborhoods, McCormack finds that Queens is a good place to do business, regardless of the extended commute.

"Jackson Heights is extremely convenient to mass transit," McCormack said, adding that with several major subway lines nearby, "it is possible to get to Midtown Manhattan in as little as 12 minutes."

'Wouldn't live anywhere else''

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Sunnyside Gardens resident Jeremy Kareken, a 46-year-old writer and father of two who works as a researcher for "Inside the Actors Studio" and regional director for the libertarian campaign of Gary Johnson, has benefited from Queens' boom.

Amid the city's real estate boom, the Kareken family's 3-1/2 bedroom, 2-1/2 bathroom home has tripled in value since they bought it. Kareken experienced the demographic makeup of the neighborhood change along with the property values first-hand.

"The neighborhood has gotten younger," he told CNBC. "Now even the dreaded hipsters are moving into Sunnyside. Tattoos, piercings and beards! Oh, my!"

Still, Kareken intends to stand his ground.

"When the 7 train is working, or I didn't get a parking ticket, and my house is clean, I wouldn't ever want to live anywhere else," he said.

Correction: This story has been updated to reflect that more than half of all of Delta Management's 53 residences have gone into contract, and that Washington Plaza is a rental property that is currently being redeveloped into a luxury co-op residence.