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Median sales prices have steadily increased in New York City’s outer boroughs. This trend presents a challenge for first-time homeowners and renters.
Moreover, there have been significant changes to New York City’s real estate market, most recently because of the COVID-19 pandemic. According to Brad Zackson, a real estate expert, the median home price in Manhattan fell 8% in 2021.
“New York City’s outer boroughs can’t guarantee affordable living anymore,” said Zackson. “What’s next?”
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Manhattan’s Increasing Median Rent Prices Force Residents Out of the Outer Boroughs
Manhattan’s real estate market may still be out of reach for the majority of first-time homeowners. In the first quarter of 2022, the median rent was $3,700 in Manhattan. In fact, it got up to $4,000 for the first time. This is a 25.2% year-over-year rise from $3,195 in May 2021. In a nutshell, this indicates that Manhattan’s real estate market might be making a comeback.
PropertyShark data shows that the median listing price of Brooklyn and Manhattan eclipses that of Queens, Staten Island, and the Bronx. Additionally, Miller Samuel reports that the sales market in 14 neighborhoods in Brooklyn, including Williamsburg and Dumbo, is more expensive than in Manhattan. This is an indication of the increasing demand for housing in Brooklyn and other outer boroughs. Most likely, this is due to the high cost of living in Manhattan.
The Hunt for Affordable Housing in the Outer Boroughs Is Daunting
The competition for affordable housing in the outer boroughs is tough. For example, in Hunters Point, a couple who has a $1 million budget could still fall short of purchasing a two-bedroom apartment because the median is $1.25 million. The cost per square foot has gone up to $1,000, probably because of multiple bidders eyeing the same properties. That is why developers are focusing more on affordable housing projects.
Fordham Landing South Is the Future of Real Estate in NYC
There are a few solutions to the challenges the real estate market faces in New York City. Developers are still focusing on creating dynamic living spaces for residents who have been priced out of Manhattan.
For instance, real estate developer Dynamic Star plans to construct a mixed-use development called Fordham Landing South along the Harlem River.
In Fordham Landing, Dynamic Star plans to include approximately 2,400 apartments, 25% of which would be affordable. There will also be retail space, a life science center, bars and restaurants, an e-sports center, and more community and entertainment facilities. This project aims to create a new economic center for the outer boroughs while accommodating residents who need an affordable yet attractive place to live.
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Brad Zackson’s Kicker
The COVID-19 pandemic is one of the factors that contributed to the slowdown of the high-end real estate market in Manhattan. The outer boroughs’ real estate market has witnessed a steady increase in median sales prices, creating challenges for first-time homeowners and renters.
However, developers are creating sustainable and healthy living spaces such as Fordham Landing South. This will ensure that the future of real estate in NYC remains promising despite the challenges.
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