Ten years ago many in the borough thought that bringing a hotel to Media was the right idea, at the right place and at the right time. (sorta like love, i guess.) The idea was solid, the location was less so, and the timing of it all proved to be its ultimate undoing. The "timing" part was mostly due to the cyclic ways real estate and financing ebb and flow in any given boom and bust period. There is a political element there, but for the sake of this discussion, that's been omitted from this article. Having spanned from 2006 to now, when a hotel in Media was first proposed, we've certainly seen one of the biggest real estate runs and the associated crash in recent memory.
What we see in and around Media today is an explosive race towards high-end luxury housing that really ramped up in the last 3 years. During 2013 came Rose Tree Reserve featuring 112 luxury townhomes, along with Jefferson Square who announced in late 2014 their 26 units. Then we saw commitments toward West End Flats (161 units), West End Walk (26 units), Promenade at Granite Run (400 units) and perhaps as many as 24 more by Media Real Estate starting in 2017.
Within 1.5 miles of Media, including the borough, there will be an insane amount of supply on the market in the next 18 months. That's over 700 units going at an estimated cost of about $1,500 per month and higher. Granted, some are townhomes, but they can typically be more expensive! At what point would one spend more to own a townhouse, as opposed to living in an apartment at a similar monthly price? Walking around State Street?
It's impossible to call the top of a real estate cycle, but what intrigued me most was a story by the Wall Street Journal yesterday that practically shared the same concerns towards a high-end luxury housing bubble that one could say is upon us here in Media. A "building binge" they called it and it is happening in almost every large metropolitan area across the country. The WSJ went on to say, "But a slowdown is happening. In a report set to be released Tuesday, MPF found that rents rose a modest 3.8% in calendar year 2016, a significant drop from the recent high of 5.6% year-to-year growth in the third quarter of 2015. Monthly rents now average $1,248 nationally." The monthly rent for a West End Flat unit should easily beat $1,248 by hundreds of dollars.
They also pointed out that NYC, among other cities, will be flooded in 2017 with 30,000 units, twice the historical average. Per apartment market data company Axiometrics, roughly 85% of the housing being built in NYC are luxury units. Comparatively speaking, the Media area will have over 700 units and I'd say maybe 95% percent are luxury oriented (> $1,500 per month either rent/mtg.) Or, granite kitchen counters and stainless steel appliances could also pass as "luxury" depending on who you ask.
Higher supply will create a renters/buyers market, but could there be possibly too much inventory to realistically work through? I haven't even mentioned Ravenscliff off of State Road, which has at least 70 units built and maybe that many more under construction.
As for Media's Luxury Housing Market? The right idea? Perhaps. The right location? Looks to be. The right timing? Time will surely tell, it always does.