Real estate market has been booming in New York year-over-year. If you’re keen to invest in the NYC real estate market and buy before prices become out of reach, you must read till the end. New York City is an expensive real estate market that gives many investors pause.
However, there are many good things going on in the NYC housing market which show that the price forecast is upward. New York City regularly ranks among the most expensive real estate markets in the world. However, that’s due to demand that simply hasn’t let up.
If you are a real estate investor, New York City has a track record of being one of the best long term real estate investments in the U.S. We’re not going to tell you to invest in the NYC real estate because it is such a vibrant city or so famous.
Unlike a number of other cities, we can’t recommend buying units in the New York City housing market to rent out to tourists, since the city is hostile to short term rentals in private homes. Yet we can give you ten positive things to seriously consider NYC real estate investment despite the steep price tag.
There are a number of reasons to consider investing in the NCY real estate. Is NYC going to be one of the hottest real estate markets for investors in 2020? To answer this question, let’s take a look at the latest NYC housing market trends and find out the prospects of investing in the NYC real estate in 2020.
NYC Real Estate Market Forecast 2020
The real estate data from Zillow shows that the median home value in New York is $671,400. New York home values have gone up 0.1% over the past year and their their New York City real estate market prediction is that the prices will fall -1.0% within the next year.
The median list price per square foot in New York is $668, which is higher than the New York-Newark-Jersey City Metro average of $280.
The median price of homes currently listed in New York is $775,000. The median rent price in New York is $2,900, which is lower than the New York-Newark-Jersey City Metro median of $3,000.
Here is the New York City, NY real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of -1.0% till Aug 2020.
New York City Housing Market Forecast 2020 – 2021
Here is a short and crisp NYC housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for New York City is 77% and it is predicting a positive trend.
The LittleBigHomes.com estimates that the probability for rising home prices in NYC is 77% during this period. If this price forecast is correct, the New York City home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the New York City, NY Real Estate Market Forecast.
NYC Real Estate Market Trends
We will discuss some of the most recent housing trends in the New York City. New York City real estate market trends indicate a decrease of $25,000 (-2%) in median home sales and a 23% rise in median rent per month over the past year. The average price per square foot for this same period fell to $1,377, down from $1,463.
The median sales price for homes in New York for Mar 1 to May 29 was $1,250,000 based on 573 home sales. Average price per square foot for New York was $1,377, a decrease of -6% compared to the same period last year. The median rent per month for apartments in New York for May 4 to Jun 4 was $1,899.
Currently, Trulia has 26,978 resale and new homes for sale in New York, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The median sale price in New York, NY is $1,350,000. Homes are selling for about $1,419/sqft.
In the past month, 1756 homes have been sold in New York, NY on Redfin.com. In addition to houses in New York, there were also 25907 condos, 1217 townhouses, and 3635 multi-family units for sale in New York last month.
As per their real estate data, the average sale price of a home in New York was $625K last month, down 0.79% since last year. The average sale price per square foot in New York is $389, down 2.4% since last year.
NYC Housing Market Trends in Sep 2019: Source Redfin.com
|Median List Price||$899,000|
|Avg. Sale / List||96.60%|
|Median List $/Sq Ft||$1,000|
|Avg. Number of Offers||1|
|Median Sale Price||$625,000|
|Avg. Down Payment||21.10%|
|Median Sale $/Sq Ft||$389|
|Number of Homes Sold||1756|
There are 31,479 homes for sale in New York, NY on Realtor.com. The NYC home prices range from $699 to $1.4B. 1,709 of which were newly listed within the last week. Additionally, there are 24,611 NYC rentals for sale. Their rent price ranges from $1 to $1.2M per month.
According to their statistics, in August 2019 the NYC housing market was a balanced market, which means there was a healthy balance of buyers and sellers in the market.
Ideally a buyer would prefer a sale to asking price ratio that’s closer to 90%. In New York the sellers have held good leverage in these negotiations. On an average, they could sold homes for 97.02% of the asking price in the past two years. A seller would always prefer scenarios which can yield a ratio of 100% or higher.
The median list price of homes in New York, NY was $839K in August 2019, trending down -1.2% year-over-year. The median listing price per square foot was $665. The median sale price was $610K. On average, homes in New York, NY sell after 133 days on the market. The trend for median days on market in New York, NY has gone down since last month, and slightly up since last year.
The median list price in New York City, NY is $1,495,000 on Movoto.com. The median list price in New York was less than 1% change from September to October. New York’s home resale inventories is 5,833, which increased 1 percent since September 2019. The median list price per square foot in New York is $765. September 2019 was $762. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in October.
NYC Single Family And Multi-Family Homes Statistics
Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
U.S. single-family rental market has seen steady rent increases between 2010 and 2019. According to CoreLogic’s latest Single-Family Rent Index (SFRI), which analyzes single-family rent price changes nationally and among 20 metropolitan areas, it shows a national rent increase of 3% in April 2019, as compared to 2.8% in April 2018.
As per the real estate company called Neigborhoodscout.com, the median house price in New York, NY is $1,030,097, which indicates that home prices in New York City are well above the national average for all cities and towns.
Large apartment complexes or high rise apartments are the single most common housing type in New York, accounting for 94.93% of the borough’s housing units. Other types of housing that are prevalent in New York include duplexes, homes converted to apartments or other small apartment buildings ( 3.15%), single family detached homes ( 1.06%).
New York is dominated by renter-occupied one, two, or no bedrooms apartments. 76.81% of New York’s dwellings are rentals. Currently, there are 6,146 single family homes for sale in New York, NY on Zillow. Additionally, there are 1,094 single family homes for rent in New York, NY. Under potential listings, there are about 12 Foreclosed and 3,201 Pre-Foreclosure homes. These are the properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
New York, NY Foreclosures And Bank Owned Homes
As per the New York foreclosure data by Zillow, in New York 0.1 homes are foreclosed (per 10,000). This is lower than the New York-Newark-Jersey City Metro value of 0.9 and also lower than the national value of 1.2. The percent of delinquent mortgages in New York is 1.8%, which is higher than the national value of 1.1%.
With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth.
The percent of New York homeowners underwater on their mortgage is 6.7%, which is lower than New York-Newark-Jersey City Metro at 8.5%.
|Total No. of Foreclosures in New York||838 (RealtyTrac)|
|Homes for Sale in New York||2,145|
|Median List Price||$950,000 (10% ⇓ vs Jul 2018)|
There are currently 838 properties in New York, NY that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 2,145. In August 2019, the number of properties that received a foreclosure filing in New York, NY was 97% higher than the previous month and 69% higher than the same time last year.
Best Neighborhoods To Invest In Real Estate In New York, NY
If you are looking to buy real estate in NYC, you should know the best places to invest in. The three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. Demand would raise the price of your NYC real estate and you should be able flip it for a lump sum profit.
When looking to invest in NYC real estate, you need to find places where the expected property appreciation forecast is positive. The running costs for owning and managing an NYC investment property should be low. The neighborhoods in New York City must be safe to live in and should have a low crime rate.
The neighborhoods should be close to basic amenities, public services and shopping malls. There should be a natural and upcoming high demand for rental properties and a low supply of income properties. There are 669 elementary schools, 669 middle schools, 609 high schools and 1,058 private & charter schools in New York, NY. There are 229 neighborhoods in New York.
Some of the best neighborhoods in or around New York, New York are Upper East Side, Upper West Side, Midtown East, Woodside, Brooklyn, Park Slope, Rego Park, Tribeca, Astoria, Ozone Park, Queens, Forest Hills, and Sunnyside.
Tribeca has a median listing price of $4.2M, making it the most expensive neighborhood. Riverdale is the most affordable neighborhood in New York, with a median listing price of $390K.
Here are the 10 best neighborhoods in New York to invest in real estate because they have the highest appreciation rates (List by Neigborhoodscout.com).
Broadway / W 225th St
W 37th St / Broadway
W 152nd St / Macombs Pl
W 135th St / Malcolm X Blvd
E 124th St / 2nd Ave
Broadway / Hillside Ave
Park Ave / E 108th St
Broadway / Riverside Dr
W 34th St / 9th Ave
1st Ave / E 110th St
Is NYC The Best Market For Real Estate Investment?
Now that you know where New York is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Should you invest in NYC rental real estate?
Many real estate investors have asked themselves if buying a rental property in New York is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
We have already discussed the NYC housing market 2019 forecast for answers on why to put resources into this market. Although, this article alone is not a comprehensive source to make a final investment decision for New York but we have collected ten evidence based positive things for those who are keen to invest in the NYC rental properties.
Investing in NYC rental properties will fetch you good returns in the long term as the home prices in New York have been trending up year-over-year. Let’s take a look at the number of positive things going on in the NYC real estate market which can help investors who are keen to buy an investment property in this city.
We’ll focus on real reasons to invest in the New York real estate instead of giving you vague appeals to buy a house or an investment property because of general ambiance and mere promises of future growth.
1. The Impact of International Buyers in New York
Despite all the talk about the one percenter dominating this and that, the truth is that the international elite are bolstering the price of luxury real estate in New York City. They see NYC real estate investment as part of a multi-pronged approach.
The property is almost certain to appreciate, so it is an investment. Owning a piece of the NYC housing market gives them a place to stay if they have to flee their home country. The money invested in the NYC housing market is typically not reported to their own government, and it is almost guaranteed not to lose value.
Ironically, foreign owners like these are much more willing to take a modest loss when they sell when they are no longer interested in the property.
2. The Expanding Luxury Development
New York’s rent control laws don’t apply to luxury units, and developers have chosen to build these instead of the affordable housing the city needs. However, this development isn’t limited to the densest parts of New York City. For example, Staten Island’s North Shore is seeing new luxury condo construction.
Interest in the area is driven by both the improved transit via the new ferry service and luxury buyers seeking relative bargains. This is aside from the oversupply of luxury penthouse units in the NYC housing market.
3. The Softening New York Luxury Market
The increasing supply of luxury real estate relative to demand is leading to more being done to sell units at their list price. For example, luxury apartment buildings are offering more and more amenities to justify their high monthly rents. Another sign that the market is softening is the growing time on the market for such properties.
A few notable properties have sold only after being subdivided into more “affordable” luxury units. This means that investors with the money could buy a larger unit as a form of NYC real estate investment, subdivide it, and then sell it for a profit.
If you have the cash and can close on the property, you could buy these premium properties for up to half off the listing price, too. The alternative is buying slow moving one and two bedroom apartments knowing they’ll eventually be worth more.
4. The Legislation on the Table Will Increase Rental Rates
There are around a million rent-stabilized apartments in New York City. There are several bills in the Democrat controlled state senate and a massive tenant’s rights push that will likely lead to tighter restrictions on landlords.
For example, it would be harder to get apartments removed from the rent-stabilization policy and limit the ability of landlords to raise rents after existing tenants move out.
While this hurts landlords who own rent-controlled properties, stricter rent control rules result in a reduction in housing supply and rents going up five percent more than they would have otherwise.
Conversely, landlords who don’t want to deal with the hassle anymore may be willing to sell properties at a discount simply to get out from under the oppressive regulations.
5. That the Rules that Drove Up Rents Aren’t Changing
The factors that led to the incredibly high rental rates in the NYC real estate market haven’t changed. One is the sheer number of people crammed into such a small space.
Another matter to consider is all the zoning regulations that limit housing supply, though New York City has had the sense to give tax breaks for those who turn warehouses and commercial properties into rental units.
This means that non-residential properties can be a viable NYC real estate investment, assuming you can get permission to turn it into lofts, condos or apartments.
Strict eviction laws that make it difficult to remove tenants who are a nuisance, time-consuming to remove if late on rent and nearly impossible to get rid of it in a rent-controlled unit all force property owners to charge much higher rent in the NYC housing market. It is the classic case of cost-shifting causing others to pay a fortune.
6. The High Average NYC Rental Rates
The median rent in New York City now exceeds three thousand dollars a month. One bedroom apartments and studios rent for roughly three thousand dollars a month, while two bedroom apartments rented for about 3,800 dollars a month. This is why the NYC real estate market is one of the most expensive in the world.
7. The Known Opportunities for Bargain Hunters
The NYC real estate market may seem dominated by five and ten thousand dollars a month apartments in Tribeca, but there are much cheaper neighborhoods. If you’re considering buying NYC real estate investment properties, start looking in neighborhoods like East Brooklyn, High Bridge and Saintalbans.
The average rent for apartments in Saintalbans is roughly 1200 dollars a month, while rents are less than 1500 a month in High Bridge. Since property values are based on multiples of the rental income, this means that you can snap up a small apartment building in the cheapest NYC real estate market for the cost of one luxury condo.
8. The Overall Cooling of the NYC Housing Market
The NYC housing market can be described as cool, though some will call it a buyer’s market. Things slowed down significantly in 2016 and 2018 as several groups of international buyers found it harder to buy properties or had less need to do so.
On top of this is the trend of properties selling below their asking price unless they’re the cheapest unit in the neighborhood. Sales volume has increased somewhat, but there is wider selection now than several years ago.
More importantly, prices are a tenth to a quarter below their 2015 highs. This is a good time to buy a NYC real estate investment property, because the market will continue to warm up as long as the economy remains stable.
9. The Tax Laws that Are Triggering Sales
Any property in the NYC real estate market is going to be subject to high property taxes. That’s simply a fact of life for property owners in the NYC housing market. However, a number of tax law changes at the local and national level are hitting a number of property owners hard.
The federal tax law change to eliminate the state and local tax deduction means that many property owners can’t write the entirety of their huge NYC property tax bills off their federal taxes. That will push many snowbirds to sell homes in the NYC housing market, since they can no longer afford the carrying costs.
For those who own multi-million dollar properties, the mansion tax that was approved gives them a reason to sell as soon as possible.
10. The Sellers Who Can’t Afford to Wait Any Longer to Sell
We mentioned the softening of the NYC housing market already, especially at the higher end. We brought up the increased amenities being used to fill luxury properties that aren’t being held as a NYC real estate investment. However, many properties may sit on the market for years.
This is enabled by the large number of properties not lived in year-round and those who simply don’t want to reduce the price tag of their property to a point lower than what they paid for it.
As listings pile up and the ongoing carrying costs like high property taxes rack up, expect to see a wave of sellers who will mark down their New York City real estate to move it because they can’t afford to wait to sell it.
Investing in NYC Real Estate: The Conclusion
Maybe you have done a bit of real estate investing in New York, NY but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold.
A good cash flow means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt.
Therefore, finding a good New York real estate investment opportunity would be a key to your success. If you invest wisely in NYC rental real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.
The less expensive the NYC rental properties are, the lower your ongoing expenses will be. Roughly a $150,000 property is what some experts recommend starting with. However, it is not easy to get that kind of a deal in New York as it is among the most expensive real estate markets in the U.S.
Most investors naturally gravitate to residential property investment. When looking for the best real estate investments in New York you should focus on neighborhoods with relatively high population density and employment growth.
Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like New York City, NY. Prices are relative, and prices are relatively low given New York City’s recent market conditions. During the latest twelve months, New York real estate appreciation rate has been at or slightly above the national average.
In the latest quarter, New York’s real estate appreciation rate has been 1.53%. While there are a number of regulatory and legal changes being proposed, the odds are that this will only increase the number of distressed property owners while eventually yielding higher rental rates.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process.
They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The aim of this article was to educate investors who are keen to invest in New York real estate in 2020. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor.
Other Best Places To Invest In Real Estate in 2020
Another market that we suggest is the housing market in Buffalo, NY. Ignore the Big Apple and look to west if you want to buy rental real estate in New York. The Buffalo real estate investment offers a surprisingly good deal with low prices and relatively high rental rates.
The Buffalo real estate market 2020 is dominated by older homes. A majority of homes in the Buffalo housing market were built before World War 2. Interestingly, this also means that there are many small apartment buildings designed to serve a population that rented small units close to their jobs.
For example, roughly a third of homes are single-family detached homes, while almost half take the form of small apartment buildings. This creates an excellent opportunity for those in the market for Buffalo rental properties. You could buy a small apartment building with multiple tenants for the cost of a single rental property in a more expensive New York real estate market.
Another market that we suggest is the housing market in Naples, FL. While the Naples housing market is noteworthy for having the second highest proportion of millionaires in the U.S., you don’t have to have a million dollars to invest in the Naples real estate market. There are a number of opportunities real estate investors can take advantage of in this unique housing market while enjoying all of the benefits of owning Florida real estate.
If you’re going to snap up Naples real estate investment properties, the best ones to buy are low-maintenance beach condominiums. Ironically, these are the properties most readily available in the Naples real estate market. The prices for fee heavy condominiums and luxury condominiums have declined because of the recent influx of inventory.
This is a significant improvement over other rental markets where the most abundant properties are bank foreclosures and distressed sellers behind on a mortgage; those properties typically have to be fixed up before they can be rented out.
Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you may fill up the form given here.
One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Softening luxury market
Rules for high rents
High rental rates
Potential for bargains
The Overall Cooling of the Housing Market
Tax laws https://taxfoundation.org/salt-act
Housing Market Data, Trends and Statistics
Expanding luxury development
https://www.businessinsider.com/nyc-penthouse-expensive-surplus- divided-up-smaller-units-sales 2019-1