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 and particularly in New York City.
History of Real Estate Prices in Manhattan
The surge in demand for housing, World War I
– Sale: $8 PPSF, Rent: $40/Mo.
The “Roaring Twenties”
– Sale: $15 PPSF, Rent: $60/Mo.
The 1929 Stock Market Crash and “The Great Depression”
– Sale: $5 PPSF, Rent: $45/Mo.
World War II
– Sale: $8 PPSF, Rent: $50/Mo.
The post-World War II Housing Boom
– Sale: $12 PPSF, Rent: $60/Mo.
The first condo building, World’s Fair, Building Boom
– Sale: $25 PPSF, Rent: $200/Mo.
World Trade Center Completed, Near Bankruptcy, Finishes Stronger
– Sale: $45 PPSF, Rent: $335/Mo.
Co-op Conversion Boom, “Black Monday” Stock Market Crash
– Sale: $250 PPSF, Rent: $1,700/Mo.
From Recession to Lofts and the “Silicon Alley” Dot-Com Boom
– Sale: $590 PPSF, Rent: $3,200/Mo.
9/11 to Housing Boom to Lehman
– Sale: $1,200 PPSF, Rent: $3,800/Mo.
Quick Rebound, Tax Credit and Housing Seasons
– Sale: $1,070 PPSF, Rent: $3,500/Mo.
(Source: New York Times & Jonathan Miller)
The past 100 years show real estate prices have continued to rise and have appreciated by almost 1,000 times 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 started to take notice of the New York real estate. Prices went up almost six times in the ’80s and more than double again in the ’90s. The average price for sale now in 2016 is $1,470 PPSF while 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 Yorker’s and attract new highly skilled professionals from around the country as well as internationally. Also, the city’s myriad of cultural activities, universities, restaurants, museums, theater, among many others, create an exceptional and unique lifestyle. New York today is indeed the cultural capital of the world that is up and running 24/7.
It fits well with today’s millennials, generation X and baby boomers who are moving back to the city from their “empty nests” in suburbia. New York’s rich history, location, political stability lifestyle and its 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.
The U.S. Census Bureau has estimated New York City’s population at 8,550,405 as of July 2015. An increase of 375,300 residents (or 4.6 percent) from April 2010. The population of New York City 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 take into consideration the global market, the population as well as 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 of the significant contributors to world economies. As the saying goes: “Just buy it and hold.” You won’t be disappointed.