That's right! Music to my ears. No other way to describe the visceral reaction I have when I wake up in the morning to the sound of idling trucks and jack hammering. It seems counterintuitive, I know. Nobody tends to gravitate towards properties where there is construction going on all around.
I remember last summer going to see a property with a beautiful outdoor deck on the Upper East Side. The building was on the corner of 95th and 3rd. Next to the building, there was a huge crater in the ground. Construction crews had leveled a few 5-story buildings to create a plot of land that could support the development of a luxury mega tower. I recalled the reactions of everyone who went onto that deck. Questions ranged from how high the tower would rise to how loud the construction would be.
What people failed to realize was that despite the inconvenience of living next to a construction zone, this was a surefire bet on getting a huge return on their investment. The condo tower that would be built would surely go for double the price per square foot of the tower right next to it. This type of development would lift the tide for all prices on the surrounding blocks.
What to look for:
Personally, when I look for a property that I plan on purchasing, I look for construction sites in the surrounding periphery. There are multiple types of work sites that I look for:
All of these types of sites are positive economic indicators of a changing neighborhood. Infrastructure, like a new school is key. Right now, I live right next to an old post office that is being converted into a new school. This tells me that this neighborhood is becoming family friendly. This will bring a lot of new people to the neighborhood. As a demand increases, and supply remains unchanged, real estate prices go up.
Additionally, I love the sight of new condos being built. As I mentioned above, when you see new condos being built, you know they'll be trading at a significantly higher price per square foot than where you currently live. This will lift prices in the neighborhood of all inventory.
Rental towers are also a positive sign. It means there is a strong residential market in the neighborhood. Some of these residents will ultimately turn into buyers and will seek out the existing neighborhood. Additionally, more people in the neighborhood will generally result in increased infrastructure.
Which leads me to my last point...Retail. Whenever there are many residents in a neighborhood, retail will be sure to follow. Generally it starts with boutique coffee shops and ends with grocers like Whole Foods.
Some pro tips:
- Use ACRIS to research who purchased/sold property around you. You can search by address or party names. It's a bit tricky to use at first, but you'll get the hang of it after some queries.
- Use the NYC Department of Building site to research permits that have been filed. This will help you identify what a plot of land or construction site will be turning into.
- Ask around. Never hesitate to go to a local coffee shop and ask, "Hey, what's that construction project turning into?" Chances are the people behind the counter will be very informed. This is something I always do.
I hope these tips will give you a leg up on your search!
P.S. Feel free to email me at firstname.lastname@example.org if you have any follow-up questions. Always happy to connect with prospective investors, whether you are looking for a primary residence or income property.