At a new condo at 515 East 72nd Street, apartments sold briskly. There were more than 70 closings between summer 2012 and summer 2013 — about half the building’s 142 one-bedrooms.
One of the reasons, aside from a positive market trend, seemed to be major milestones in the construction of the Second Avenue Subway, a little more than two blocks away. The milestones included some of the last subterranean blasts for the first phase of the project, from 63rd to 96th streets, which is scheduled to debut by the end of 2016.
Sales were lagging behind until it became clear the subway was really getting closer to completion, the broker responsible for sales at the buildings said to The Real Deal Magazine. “I think the savvy one-bedroom buyers recognize the potential for the appreciation for these one-bedrooms by having that Second Avenue line there.”
The Second Avenue Subway — which will eventually run 8.5 miles from 125th Street to Hanover Square — has been on the drawing board for decades, variously championed by politicians, transit advocates and urban planners. Commuters, tired of crowding onto the over-strained Lexington Avenue line, the only other subway serving the Upper East Side, were among the most vocal in pushing for the new “T” line, as it’s dubbed.
And the real estate industry, of course, has a vested interest in the project coming to fruition. For the first time, developers and brokers are reporting a spike in buyer and investor enthusiasm for developments east of Third Avenue, because of the recent progress on the Second Avenue Subway. They say property values on and around Second Avenue, as well as prices for condos and co-ops, could increase in the near future by more than 20 percent due to the new line.
Prices on the Upper East Side east of Third Avenue have traditionally lagged those west of the avenue and closer to Central Park. The lack of a subway line hasn't helped. The first phase of the subway will undoubtedly close the gap. While it’s unlikely Second Avenue — or avenues even farther east — will ever overtake swanky Fifth and Park in terms of price, they could more rigorously compete with Third and Lexington avenues.
The statistics suggest that the gap is already closing. The average sales price per square foot for condos on Third Avenue and eastward increased 11.4 percent in 2013 from the previous year, according to CityRealty. That was slightly above the 10.4 percent increase for the whole area. As for co-ops, the average price per square foot was up 7.7 percent for Third eastward — above both the 5.3 percent jump for the entire area.