NYC Market OVERVIEW

With the current state of real estate in New York and the potential growing bubble on Wall Street, more and more people are looking to diversify investments into real estate, particularly in New York City.  Let’s take a look back at the last century of NYC pricing history and see what the past can tell us about the future:

• 1910’s bring on a surge in demand for housing leading up to World War I.

• Sale: $8 PPSF, Rent: $40/Mo

• 1920’s aka as the “Roaring Twenties” Good times for all, sale prices nearly double and outpace the 50% increase in rental rates.

• Sale: $15 PPSF, Rent: $60/Mo

• 1930’s along with the 1929 Stock Market Crash which ended this decade and “The Great Depression” which led to the next.  Sales price are set back by 2/3’s and rent drops 25%

• Sale: $5 PPSF, Rent: $45/Mo

• 1940’s Pearl Harbor and WWII bring a resurgence of patriotism and homecoming for a generation of soldiers.   Sales prices grow 60% and rent increases 10%

• Sale: $8 PPSF, Rent: $50/Mo

• 1950’s bring on the full effect of the Post War housing and baby boom.  Sale prices continue to increase at an aggressive 50% rate and rentals increase 20%. This is more in line with the roaring 20’s and NYC real estate is back and stronger than ever.

• Sale: $12 PPSF, Rent: $60/Mo

• 1960’s Building Boom explodes, first condo in NYC and the World’s Fair brings exponential growth to NYC with sales prices DOUBLING and rental rates TRIPLING!

• Sale: $25 PPSF, Rent: $200/Mo

• 1970’s World Trade Center completed, President Ford tells NYC “drop dead” during mid-decade financial crisis, the city rebounds and finishes stronger with sales growing by 80% and rents nearly keeping pace with 70% growth.

• Sale: $45 PPSF, Rent: $335/Mo

• 1980’s Coops become the new way to own a home in NYS, we survive “Black Monday” and the stock market crash with a blip followed by supercharged growth in sales prices and rents both growing at nearly 5x the prior decade.  Low rents and low prices are a thing of the past!

• Sale: $250 PPSF, Rent: $1,700/Mo

• 1990’s take us from recession to a new world gold rush fueled by tech and a “Silicone Valley” dot.com boom.  Both sales prices and rentals continue the torrid growth pace and both nearly double!

• Sale: $590 PPSF, Rent: $3,200/Mo

• 2000’s the new millennium begins without the feared internet melt down and takes us on a wild ride from Sept 11th to housing boom revisited and a financial crisis of dark depths which changes banking in the entire USA.  NYC real estate rolls right along nearly once again doubling sales prices and rentals increasing at 20%

• Sale: $1,200 PPSF, Rent: $3,800/Mo

• 2010’s Supertalls on the skyline, parks along the waterfront, hurricane Sandy, slow the roll of exponential growth.  The emergence of Brooklyn as a viable place for success offsets the setbacks of Covid 19 and sales prices are overall flat, though down in Manhattan and way UP in Brooklyn. 

• Sale: $1,070 PPSF, Rent: $3,500/Mo

• 2020’s Covid, and interest rates gone wild continue to slow any significant growth.  Inventories are low and that keeps prices relatively flat. 

• Sale: $1,142 PPSF, Rent: $3,625 /Mo

Those who don’t learn from history are bound to make the same mistakes again -

The past 100 years show real estate prices have continued to rise and have appreciated almost every decade. The prices doubled from the ’50s to the ’60s and nearly doubled from the ’60s to the ’70s. Once New York City came out of bankruptcy in the late ’70s, international buyers noticed New York real estate. Prices rose almost six times in the ’80s and more than doubled in the ’90s. The average price for a sale in 2016 was $1,470 Price Per Square Foot, while the average rent in Manhattan today is $4,374.

There are many reasons to be optimistic about the future of New York real estate: the local economy and its diverse industries that employ New Yorkers and attract new highly skilled professionals from around the country and internationally. New York today is indeed the world’s cultural capital that is up and running 24/7. The city’s myriad of cultural activities, universities, restaurants, museums, and theater, among many others, create an exceptional lifestyle.

What is past is prologue -

It fits well with today’s millennials, generation X, and baby boomers moving back to the city from their “empty nests” in suburbia. New York’s rich history, location, political stability, lifestyle, and industries attract investors and foreign buyers alike. Never in the city’s history has it experienced such a high inflow of foreign capital and an interest of foreign nationals to live in New York City, either full or part-time.

An increase of 375,300 residents (or 4.6 percent) from April 2010. The U.S. Census Bureau has estimated New York City’s population at 8,550,405 as of July 2015. The population is forecasted to grow by 9 million by 2020.

Housing remains and will continue to stay in high demand for many years to come. The notion that the prices are too high does not consider the global market, the population, and income growth in New York City. The local economy no longer solely depends on the economic conditions of New York City, New York State, or the United States. Today’s New York industries cater to the world. Finance, entertainment, law, shipping, and technology are just a few significant contributors to world economies.

As the saying goes: “Just buy it and hold.” You won’t be disappointed.