The pounding soundtrack that underlies the Second Avenue subway project—unexpected blasts from explosives, bone-jarring jackhammers—is a near-daily aggravation for many Upper East Side residents and business owners.
For others, the nuisances present the opportunity for a bargain.
Construction on the first phase of the project, which stretches from East 105th to East 63rd streets, began in 2007 and is scheduled to end in 2016. And with it has come a parade of headaches: chewed-up streets, blocked sidewalks, pummeling noise, displaced rats and busy work crews.
Some home buyers, though, are hoping those short-term inconveniences will net them a tidy discount on an apartment with a bright future: a spot near a brand-new subway line.
“It’s almost like taking your cod-liver oil,” said Jonathan Miller, chief executive of Miller Samuel Inc., a real-estate appraisal firm.
Measuring the neighborhood-wide impact of the construction on property values is difficult because of the slow-moving nature of home sales, Mr. Miller said. But accounts from real-estate brokers suggests there are discounts on homes closest to the project’s hot spots.
The median sale price for condos and co-ops along the Second Avenue construction zone in the Upper East Side fell to $650,000 in 2011, an 8% decline from 2007, when the project started, according to real-estate website StreetEasy.com.
To be sure, many other areas of the city experienced drops in values after the recession hit, which roughly coincides with the subway’s construction. But median prices on the entire Upper East Side have topped those before the economic downturn. Median prices rose to $926,000 in 2011, an 8% jump from 2007, according to StreetEasy.
Louise Kohorn has lived in a co-op building at the intersection of East 69th Street and Second Avenue for eight years. She recently sold her studio and upgraded to a one-bedroom flat in the same building, which she bought for $640,000, about $30,000 below the asking price.
The noise doesn’t rattle her. “What I hear is the concrete trucks loading concrete…The dynamite explosions I hear,” said Ms. Kohorn, 72 years old. “What’s the big deal?”
“The Second Avenue subway line is going to be amazing,” Ms. Kohorn added. “You have to be patient. It’s not going to happen tomorrow.”
Fabrizio Uberti Bona of residential brokerage firm MNS Real Estate says that most discounts for property along Second Avenue will be modest. But for certain apartments, it can be as high as 15%, he said. “It really depends,” Mr. Bona said, on the condition of the apartment, the quality of the building and how close it is to the construction.
Karen Advocate-Connolly with Prudential Douglas Elliman has sold several apartments near the construction zone and said many listings there sell below the asking price.
“I think the buyer is looking for some sort of discount just because of the aesthetic of Second Avenue. The discount is not as big as people think it is,” Ms. Advocate-Connolly said. She said recently sold a studio in the construction zone that went for 5% less than the asking price.
Mr. Miller, the appraiser, said homes on lower levels with obstructed views are likely to see the biggest drops in value in the short term. Home buyers, however, will likely get discounts of more than 10% in only the most extreme cases, he said.
Laurie Bower of Great Neck, N.Y., recently signed a contract below the asking price of $345,000 for a studio in a co-op building near East 69th Street and Second Avenue, in the heart of the construction zone.
The first thing Ms. Bower saw when she visited the building was “the large white bubble” located on Second Avenue, a “muck house” used to store rock bored out for subway tunnels.
“There was bit of a mess,” Ms. Bower, 53 years old, said. But, she said, “I wasn’t scared away by it.”
Friends told her that construction had stirred up a rodent problem. “I didn’t think the rats from the subway project would find their way up to my sixth-floor apartment,” she said.
Inside the apartment, which faces the back of the building, there was silence, Ms. Bower said. That, plus a doorman and a rooftop terrace was enough to convince her, she said. “It was a just a great apartment all the way around,” Ms. Bower said. “I do hope to hold on to it as an investment.”