Should I Invest in New York Real Estate?

There might not be a more dichotomous real estate world than what you find in New York State. To say that the world of real estate and investing is different in midtown Manhattan than it is in the rest of New York is to possibly make the biggest understatement humanly possible. There are truly two different worlds when it comes to real estate, and while there are almost no single family homes in Manhattan, condos, co-ops and apartments dominate due to space restrictions, the 11 million New York residents that live outside of the metro area prefer to call the traditional single family home home. So, how are these two areas reacting to the current nationwide real estate slump? It really depends on which numbers you look at.


In a CNN article dated May 15, 2007, housing prices from the first quarter of 2007 are analyzed and compared to the same quarter in 2006. The city of New York, including Long Island and Northern New Jersey hung tough, sporting a modest 1 percent rise in home prices. But things are far from smooth throughout the state. Looking at the White Plains section of New York, prices were actually far healthier, with a rise of over 2 percent in home prices. A tad further south in Edison, New Jersey, the outlook was a bit more grim, with a decrease in home prices of almost 3 and a half percent compared to last year. The best performing area was actually Newark, with a rise of four and half percent. Upstate in Buffalo and the Niagara Falls area, prices fell over three percent. But in Albany and the Binghamton area, prices are robust, with increases of 6 percent and 9 percent, respectively. So, what does all this mean?


It means that New York is one of the most complicated patchworks of real estate investing in the country. There seems to be a real migration out of the city to areas upstate. Even towns like Syracuse and Rochester, known more for their snowfall then their real estate prices, showed modest increases in value that much of the eastern United States couldn’t match. But don’t think the city was suffering, either.
According to a May 2007 article published on the New York real estate site The Real Deal, the average price for a Manhattan apartment was up a healthy 4.5 percent during the first quarter of 2007 to $835,000. Of course, that is taking in all five Burroughs of the city, if you were to just count Manhattan, that number would be significantly higher. According to the article, the price of an average Manhattan apartment could buy you EIGHT homes located upstate.


So, the bottom line question here is, is New York worth investing in right now when the rest of the east coast isn’t doing very well or should you stick to the Pacific Northwest, California and Canada?


The answer is New York might be the healthiest investment out there if you want to keep your money on the eastern side of the Mississippi. Growth is still sluggish compared to five years ago, but it does appear to be moving in the right direction and most cities in the US right now can’t claim that.


The economic monster that drives New York City, and the rest of the state, is simply too big to let a recession in real estate last more than a few months. The 22 million+ residents won’t allow real bargains to sit around very long, which makes New York one of the safest places to invest anywhere. That use to just be a sign of the city itself, but it appears that the safety net has been strung from upstate, as well.


Happy Investing!

Mary Wozny