What is the condition of the NYC real estate market currently? Much financial news recently states that the biggest city in the world, New York, is no longer the most expensive city in terms of housing and real estate. Well, the “achievement” is not owned by New York anymore. Previously, the city was always included in the top 3 of the most expensive cities in the world. In 2022, for the first time, it is not even on the list of 20 most expensive cities to buy properties in the US.
Based on some reports, the COVID-19 pandemic has attacked the real estate business in New York for the last 2 years. Although in some previous months, it started to wake up, it is not enough to bring back its position as the most expensive city to it. For some people, it may sound starving since the costs of property rentals are high starting from the end of the year 2021.
Current data states that California leads the list as the most expensive area in the US. Then, there are some new cities to include such as Water Mill and Sagaponack. Meanwhile, one of the most popular areas of the New York City real estate market, Manhattan, only ranks 22 even if it has many prestigious locations like Soho, Little Italy, and Hudson State.
This condition may not be really beneficial for property businessmen for the less income they may get. But if having a property in New York is your dream for a long time, you should take this chance. No one says that property in the city is at low prices right now. But at least, they tend to be lower than how they used to be and lower than some other big cities in the world. So, you can check your savings right now.
A Brief History of New York City’s Real Estate Market
Talking about the history of the real estate market in New York, it is quite long as it started many centuries ago. But if you take a look only at the last 100 years, it shows that generally, the real estate price in the city tends to always increase. The price of land per meter square increased twice from the 50s to the 60s. The same thing happened from the 60s to 70s.
The 70s is said to be the Dark age of the property price in New York as the business was once experiencing bankruptcy. But it was not too long. At the end of the 70s, the city could be out of it and the luck was even improved. Yes, internationally, people started to pay attention to the chance of real estate investments in New York. As a result, the price increased 6 times in the 80s.
It again increased twice in the 90s. The trend continued like that until the 2000s. The average price for property selling at the end of 2017 was $1.470 PPSF as well as the rental cost of properties in the Manhattan real estate market was around $4.374. It was that good and then, the pandemic attacked the world at the end of 2019 and it is just over now in 2022.
NYC Real Estate Market
As has been mentioned above, New York is one of the cities in the US or even in the world that was deeply affected by the COVID-19 pandemic. However, there are so many chances for the city to repair its condition. It is even clearly seen this year, in 2022. In the middle of the year, the rising trend from the last 18 years seems to have continued. It pushes an increase in housing prices also.
However, if the Manhattan real estate or New York houses are still your targets now, pay attention also to the mortgage level. Yes, it has increased throughout the year. The interest of people in the real estate market in the city currently is still because the price is lower than other prices. Even compared with the situation before the pandemic, the price of a house is much lower. But sooner or later, the high demands will cause high prices as the economic principle says.
The low price and high demands are the 2 main phenomena of house and real estate selling in New York currently. So, how about the rental thing? Is that the same also? The rental price for apartments was also affected by the pandemic causing it to be significantly falling. But now, when COVID-19 seems to start to disappear, the increasing trend is slightly seen. Some homeowners recently increased the price little by little to reach normal prices in the end. Well, it is normal for them to do that as the demands also start to increase.
Before talking more about the current market condition and the average real estate appreciation, let’s discuss why the New York property market was severely damaged because of the pandemic. New York is a city with many comers and immigrants from other places in the USA and the world. They come for many reasons starting from studying, working, or opening a business there.
Then, imagine when COVID-19 hit the world, the government issued new regulations about staying at home and avoiding the social crowd. Some people might work from home and get income from it while some others are not. Then, it’s expensive living cost forced them to move away from the city and go back to their hometown. This is how the property prices whether for selling or renting were significantly dropped.
Now, when the condition seems to be back to normal, many citizens decided to go back to New York and this is how the NYC real estate market has also recovered.
Based on the latest statistics issued, the recovery of the market in some areas in the city was even started in December. In that month, the rental price peaked during the pandemic time in Manhattan. Then, for the next 5 months, the inventory list decreased and it is currently at the level of pre-pandemic time.
While the trend has improved, it doesn’t mean that the property market has no problem at all. You know that further variants of COVID-19 seem to threaten the world and it may cause instability in many sectors including properties. But the issue doesn’t influence markets in some areas in New York including Manhattan. The sales have even increased recently with a total of the fourth quarter, making it the highest in the last 32 years.
In Brooklyn, the property price trend continues its record when the sales are increased. Even for six quarters in a row, selling prices in this area mostly make new records. More than that, to make it clear, here are some points to get when talking about the New York real estate market currently.
- In 2022, generally, prices of real estate and houses in New York are higher than those in the last year,
- The average the increase is approximately19.4% or USD 370.000,
- The delayed sales increased up to 10.8%. Those sales are transactions from 2021,
- Closed sales raise to 17.2% or it is around USD 153.110, and
- The number of properties for sale is decreased from 2021, with a drop rate of 30.4%,
Population and Growth of New York
When it comes to the issue of housing and property in New York or homes for sale in NYC, you cannot ignore its connection with the population and growth in the city. If we reflect on the population improvement since 2010, the US Census Bureau recorded that there was an improvement of around 375,300 or 4.6% per April of the year. Then, it reached 8,550,405 in July 2015 as well as it increased to 9 million people in 2020.
Sure, the number is fluctuating starting from 2019 to 2022 for the pandemic. But something real is that it has increased and it will always be. In fact, housing will still also be one of the products with high demands in the future. And no matter if New York once lost its title as one of the most expensive cities in terms of property, you cannot deny that still, houses, apartments, and lands in the city are expensive.
There are many reasons why the city will rise soon after the pandemic. The local economic condition in New York doesn’t only relate to the condition of the city itself or the US as the country to which New York belongs. New York’s economy is tightly connected to the world. New York is still a strong magnet for many people from outside the US to come in and live. So, investing your money into the New York housing market is never wrong. It can even be one of the best decisions you have ever made in your life.
New York Real Estate Forecast, Housing Market Prediction
There are so many reasons to be optimistic about the future of real estate in New York despite the latest condition caused by the pandemic. The New York real estate market is still a dream for many property businessmen. Aside from the fact that this is one of the biggest and the most popular cities in the world.
New York has many treasures inside as it becomes the center of popular culture that runs in 25 hours and 7 weeks. You can just mention so many things there to attract people to come in starting from colleges, culinary centers, museums, theaters, and more. Investing properties in it is a never wrong decision anyway.
Uniquely, today’s people who love New York seem to be more interested in living or investing in a property in the suburbs than in the middle of the city. Enjoying the crowd of New York is one thing but at the same time, they also look for quietness to live more peacefully. This tendency has been seen since around 10 years ago although the number was still limited. Then, the data show the increase in the number of people who prefer living in the suburbs of NYC and the trend seems to continue for some years later.
Interestingly, although in some suburbs the property prices for sale and rent have been increased even more expensive than in the Manhattan Real Estate market, in some others, they are still relatively affordable. Based on the situation, you can say that 2022 is one of the good times to buy a property in a suburb of New York. The price may be significantly increased later and it is definitely a good investment.
Pros & Cons Of Buying Real Estate In New York City
Now, we have come to the conclusion that being involved in the real estate market in New York is generally profitable. It is included even if you only want to invest in the average house price in New York City. But it doesn’t mean that there are no cons at all regarding this decision. So, here are some pros and cons of investing in the New York Real Estate Market.
- High profits to get,
- New York has many citizens and comers who look for houses and apartments for rent,
- Property business in New York is promising for the future,
- Properties in some suburbs are still relatively affordable.
- The prices of properties are already high,
- The level of crimes is also high.
- Is New York still a good city for property investment after the COVID-19 Pandemic?
New York, this popular city is still a good choice for property investments. Indeed, the property market in the city including the median home price in New York City has decreased significantly because of the COVID-19 pandemic in the last 2 years. But the prices are still considered higher and currently, the condition is also getting improved.
- Is the NYC real estate market still considered the most expensive in the world?
New York was no longer a part of the most expensive city for properties in the world. However, it also could not be said that the prices were cheap also.
- How are the prices of houses, apartments, and lands in New York currently?
Moreover, it is shown currently that the houses, apartments, and lands in New York are gradually increasing. The trend is forecasted to continue so that buying properties in New York is still a good idea for investment.
- Is it a good idea to buy properties in the suburbs of New York?
If you think that properties in the middle of the city are too expensive, you can choose the suburbs instead. Not all of them but in some areas, the prices are still relatively low. So, this is the condition of the NYC real estate market currently.