The real estate market in New York is known to be one of the most dynamic and competitive in the United States and the world. As a global financial center, the city attracts local and international real estate investors. After some turbulence and uncertainties related to the global economic context, the city that never sleeps does not seem to be weakening in terms of real estate. So what does the real estate market look like in New York in 2023? In this article, we will look at the current trends in the real estate market in New York, the most popular neighborhoods and the different factors to consider when buying real estate in this city.
The Real Estate Market in New York: Trends in 2023
When it comes to real estate, New York experienced some turbulence in 2019 and 2020. Property prices had fallen there, as there was a mass exodus from the city during the Covid crisis. However, prices have since resumed an upward slope and the real estate market has regained its dynamism.
New York experienced very strong real estate activity in 2022, until the end of the summer, before seeing a signifigant decrease in the number of real estate transactions. Several contextual and cyclical factors can explain this fall in prices. First, the global economic situation has had an impact on the U.S. economy, which has been slowing sharply for several months. Interest rates on mortgages are rising, Americans are experiencing exponential inflation and a depreciation of stock market values. Secondly, the geopolitical situation in Europe with the war in Ukraine has led to a decrease in the number of foreign buyers. All this has reduced the pool of buyers in the New York market. But New York is a solid market, so prices have not fallen and the market remains in balance.
Overall, New York’s real estate market has been healthy and stable over the long term. Historically, we have observed this market undergo various successive crises (oil, health, economic), but the New York market experiences slowdowns that are never long-lasting. The real estate market in New York has been growing steadily since the 70s, with an average increase of +3% per year and, so far, 2023 seems to be no exception.
As of June 1, 2023, according to Properstar data, average housing market prices in New York City were $15,335/m² for an apartment and $6,500/m² for a house. Depending on the type of property desired, potential buyers could plan to pay the following prices:
For an apartment:
- Studio : $
2 068 829 $ - 2 rooms: $782,322
- 3 rooms: $807,640
- 4 rooms: $1,118,284
- 5 rooms: $1,661,646
For a house:
- 4 rooms: $1,474,105
- 5 rooms: $748,509
- 6 rooms: $783,599
- 7 rooms $829,497
- 8 rooms: $1,086,393
The outlook for the real estate market in New York in 2023
Despite a sharp slowdown in US economic activity, the real estate market is holding steady in New York. As we mentioned earlier, the market is resilient even if the number of transactions and purchase requests are declining. The prices of the New York real estate market are not wavering and are even on the rise. Therefore, the outlook for the real estate market in New York in 2023 looks positive.
On the other hand, the US Federal Reserve has sharply increased its key rates to fight inflation resulting in consequences that have effectively doubled the borrowing rates of real estate loans in the last year. This has led to a fall in stock market valuations but also a fall in mortgage applications. However, the real estate market in New York is holding up.
In addition, the New York real estate market has some peculiarities. Even if there is a slowdown in the market, homeowners can afford to wait for the situation to improve and there is not an urgency to sell. This makes it possible to maintain a balance between supply and demand and therefore, we do not see signifigant price drops at this time.
The demand for housing in New York remains strong in 2023. Many buyers are looking for spacious and modern properties that are suitable for post-pandemic life. Apartments with outdoor spaces such as terraces or balconies are particularly popular, offering residents the opportunity to enjoy fresh air and spectacular views of the city. Investors also continue to be interested in rental properties, due to the constant demand for housing in the city.
Where to invest in New York in 2023?
Think of a purchase in New York as a long-term investment. Unlike other U.S. cities, prices in New York are unlikely to fall. On the contrary, it is even rather likely to increase in value. So it's always a good time to invest in New York.
In addition, the rental real estate market is still booming. Rents have increased by 30% since 2022 and the trend seems to be continuing. If you want to make rental investments in New York, you should bet on studios and large apartments.
New York is a dynamic city that attracts investors from all over the world. Prices are also very high. If you want to buy a spacious property for yourself, prices can quickly reach heights in the top-end of the market. But other solutions can be interesting, such as the New York suburbs. Some nearby cities offer a very pleasant living environment, at more affordable prices than New York, while remaining close to the Big Apple.
If you want to buy a property in the center, Manhattan, Brooklyn and the borough of Queens continue to be the most sought-after areas, with prices per square meter reaching record highs. The most popular neighborhoods in Manhattan are Tribeca, the Upper East Side, Midtown, and Soho. As for Brooklyn, the neighborhoods of Dumbo, Caroll Garens, Gowanus or Cobble Hill are highly sought after by buyers. Due to rising prices in traditionally popular neighborhoods, new emerging neighborhoods are seeing increased attention from buyers and investors. Areas like Harlem, Long Island City and the Bronx are experiencing urban revitalization and attracting buyers looking for more affordable real estate while offering a unique experience of New York City life. These neighborhoods often offer easy access to public transportation, restaurants, and green spaces, making them attractive to a diverse population.
Buildings built before World War II are in high demand for their charm, character and lower prices. As for new real estate, it is more expensive, but it has many advantages in terms of equipment, tax exemption and rental or resale potential. The Hudson Yards district, which includes only new development, is a good example of this, since it is the most expensive at the moment. Demand for high-end real estate remains high.
Also be aware that for properties in the old in New York, you can negotiate prices in the order of 5% in the best case. As for new real estate, this can be at least up to 10%.
Real estate prices in New York are influenced by many factors. Location is one of the most important. The central neighborhoods of New York are obviously the most expensive, especially those located in the Big Apple. The size and type of property are also factors to consider. So, you have to know how to make the right calculations before you start your buying project, and be accompanied by a real estate professional who will guide you.
In 2023, the real estate market in New York seems to be holding up. Real estate prices are on the rise and new, emerging neighborhoods offer interesting investment opportunities for those looking for more affordable properties while enjoying New York life. As the city that never sleeps continues to evolve, the New York City real estate market remains an exciting market for investors and buyers looking for new opportunities.
