Why Invest in New York Real Estate: 7 Specific Attractions

Hello everyone.

Thank you for visiting our website and for your interest in New York real estate among other real estate investments around the world.My name is Onodera, and I am the president of the company.

In this article, we will discusswhy New York real estate is so attractiveandwhy investors around the world continue to invest in New York real estate.I will be describing the reasons why investors from all over the world continue to invest in New York real estate.

It will be a bit long, but we hope you will bear with us until the end.

The Brooklyn Bridge in New York City, USA

In this article, NYC (New York City), especially Manhattan, will be referred to as "New York or New York City" and "New York State" when referring to the entire state of New York, except where otherwise noted.

1. Attractiveness of the New York market (upward price trend).

The New York real estate market has been experiencing steady growth over the long term.An analysis of statistics over the past several decades shows that despite economic ups and downs and temporary market adjustments,the overall market has maintained an upward trend.

For example,from the 1980s to the present, the average Manhattan condo price has increasedat an average annual rate of about 5-7%.

(Data from: StreetEasy Market Reports, 2020-2023)

Please see the table below, which describes the last 27 years or so.

https://www.castle-avenue.com/new-york-flat-trends.html

The above describes the per-floor area value of condos and coops in Manhattan (some apartments in NYC are called coops and are discussed in a separate article), which hascontinued to rise steadily over the past 27 years., which shows that the amount per floor space has been increasing continuously over the past 27 years.

Of note isthe resilience of the market after the 2008 global financial crisis.While many other markets fell into a prolonged slump, the New York real estate market recovered relatively quickly, lasting only a few years, and has continued to grow steadily ever since.Thisresilience, underpinned by New York's economic diversity and international appeal, suggestsits resilience to future economic shocks.

I often tell clients this when I speak to them.

New York City was the center of the world 100 years ago and is still the center of the world today and will probably remain so 100 years from now, I believe.People from all over the world are constantly coming here.NYC is a very cosmopolitan city, with a total population of 8.6 million (as of 2024) in an area the same size as the 23 wards of Tokyo, and more than 1/3 of the population comes from outside the US.Many investors are also from overseas, and all take a long-term perspective.　(Continued below)

New York City is one of the most expensive cities in the worldto live in and one of the most difficult to live in.From a living perspective, there may be many cities where the cost of living is lower and living is easier.From an investment standpoint, there may be cities around the world like Bitcoin, where one day a well-known company will move in and build a factory, and the price will double in a short period of time.

But still, I would still recommend New York becauseeven 100 years from now, we can expect this place to be the best in the world, even if (as the above data shows) the world is in turmoil, even if there is an unpredictable financial crisis, even if there is a coronavirus outbreak,New York City has always recoveredin history.

Coming to New York and investing in New York real estate is a path to a place where people, business, and information come from around the world.It isa remarkable marketthat is not measured by short-term cost performance, but by long-term price volatility."

I didn't start my career inreal estatespecifically, but rather worked as an engineer for eight years as a new graduate in Tokyo, Los Angeles, and India.I then started my own business, invested all the money I had saved, obtained an investor visa, and came to New York City by myself in 2019.

In the five years since then, I have been running a food and IT business in the US whilesupporting companies, business owners, and investors from all over the world coming to New York and the US.I have been involved in visa and immigration matters, assisting corporations in expanding their business in the U.S., and developing partnerships.

Therefore, I am not a person who has specialized in sales, but came to New York City with the goal of becoming successfuland in the process of growing my business, I came to understand the true value of New York City and ended up in real estate.In addition, I myself experienced financial difficulties in my childhood, and I have a policy of never introducing properties to my clients unless I am confident in recommending them.

I apologize for the length of the first part.We hope you will continue with us.

2. High price stability

Next, let's look at price stability.

As one of the world's leading financial and cultural centers, New York real estate is known forhigh price stabilitycompared to other regions.This stability is supported by multiple factors, one example being

Diverse economic base: As the world's financial capital, New York is home to many financial institutions, particularly on Wall Street, and in recent years, this trend has led to many fintech-related technology companies and AI start-ups.In recent years, the city has become home to a number of fintech-related technology companies and AI start-ups.The coexistence of multiple industries, including numerous media companies headquartered in the city andmore than 60 million annual visitors to New York City for tourism, mitigates the impact of a downturn in one industry on the market as a whole.

Recently, OpenAI, the world's AI leader in ChatGPT, made headlines when it opened an office in Soho with hundreds of employees.(October 2024) Job offers are as high as at least $250,000 (just over $40 million per year), and office leases are in the 10-year range, meaning that more and more engineering talent and investment will be attracted to New York.

Limited Land Supply: There is limited room for new development in Manhattan and other key areas, which helps stabilize the supply-demand balance.Manhattan is about the size of two Tokyo 23 wards, and many buildings and condominiums are located in this super-dense area.In addition, New York City's strict building and land use regulations prevent unregulated development and protect the value of existing real estate.

These factors make New York real estate more resilient to economic volatility than many other markets.For example, it is worth remembering that even during the 2020 pandemic, New York's luxury residential market began to recover relatively quickly and maintained long-term investor confidence.(Data from: New York City Department of Finance, Property Assessment Roll, FY 2020-2023)

3. New York City as an overwhelming "global hub

The third is urban diversity.

In my opinion, the most important characteristic of New York as a city is its international flavor.That is,that New York real estate attracts a much larger number of foreign investorsthan real estate in other countries and cities.

For example, it is not uncommon forover 3M luxury condominiums in the Manhattan market to have international buyers represent 20-30% of all buyers.

(Data from: National Association of Realtors, Profile of International Transactions in U.S. Residential Real Estate, 2022)

In fact, many of our clients are investors from outside the United States.

These are, for one, the fact that New York City isoverflowing with a diverse group of demand.This means that business people, artists, students, and tourists from all over the world come to the city for a variety of reasons, creating a steady demand in both the rental and sales markets.

Second, there iscultural diversity.The cultural diversity of New York City is so strong that it is not an exaggeration to say that almost every language in the world (there was once an anecdote that more than 200 languages were spoken within a 5 km radius), including English, Chinese, French, and Japanese.

Andglobal brand strength.The name "New York" itself has become a powerful brand, an intangible asset that supports the value of real estate, andAs an international business hub, companies from around the world have located in New York.This creates ongoing demand for residential and commercial real estate.

These sustained international demands support the stability and growth of the real estate market.

4. High liquidity

The fourth is high liquidity.

The New York real estate market is very active in transactions and is always in high demand.This is related to New York City as a global hub before any other.High liquidity has many advantages from an investment standpoint.

With the right pricing, you are more likely to be able to sell your property in a relatively short period of time.The average sales period for a typical condominium in Manhattan is typically 2-3 months, although it varies depending on market conditions.

(Data from: Real Estate Board of New York (REBNY), Quarterly Residential Sales Reports, 2022-2023)

The consistently high demand for New York real estate also means thatsellers are often in a stronger position to negotiate prices.One might say that there is more flexibility in price negotiations.

This high degree of liquidity is especially important for international investors.International investors are also likely to be able to quickly cash out their assets as needed, which greatly increases their investment flexibility.

5. U.S. Population Growth

The growing population of the U.S. as a whole is another positive factor for real estate investment.

The current population of the U.S. is 330 million, making it the third most populous country in the world after India and China.

According to projections by the U.S. Census Bureau,the U.S. population will be the only developed country to continue to grow and will exceed 400 million people by 2060.

(Data from: U.S. Census Bureau, Population Projections, 2017-2060)

This population growth has a variety of positive impacts on the real estate market, one example being

Increased demand for housing: With population growth comes continued demand for new housing.

Concentration in urban areas: Populations tend to concentrate in metropolitan areas, especially in metropolitan areas such as New York City, for employment opportunities and convenience of living.

Stable rental demand: Increasing numbers of young adults and new immigrants lead to stable demand in the rental housing market.

MaintenanceandRise: Increased demand due to population growth will maintain and increase property values over time.

New York City itself experienced a population increase of approximately 7.7% between 2010 and 2020, and although the population temporarily declined after the pandemic, it is now back to pre-pandemic levels.This trend is expected to continue.This demographic is one of the key factors brightening the outlook for long-term real estate investment.

6. The dollar as a key currency

The U.S. dollar maintains its status as the world's reserve currency.This translates into the following advantages for real estate investment in New York.

For example,minimizing currency risk.For international investors, assets denominated in dollars provide a means of mitigating currency risk; despite the ongoing depreciation of the yen since the spring of 2022, investing in real estate in New York is valuable even as an asset dollarization.

In addition, as aninternational asset allocation, dollar-denominated assets can be an important part of an international investment portfolio, as well as ainflation hedge.They can also serve as ainflation hedge.

Furthermore, considering that U.S. monetary policy and economic trends have a significant impact on the global economy, we believe that investing in New York real estate denominated in U.S. dollars is an investment opportunity that is directly linked to global economic trends.

7. Low Vacancy Rates

Finally, New York real estate has consistently maintained low vacancy rates, for example,vacancy rates in the Manhattan rental market typically hover around 3-5%.This is very low compared to the national average.

Aside from temporary fluctuations following the pandemic, this low vacancy rate trend has been maintained over time, making it one of the most attractive features of New York real estate investment.

(Data from: Douglas Elliman Real Estate, Manhattan Rental Market Report, Q4 2023)

This low vacancy rate also has a significant impact onrent prices.Rent prices in New York City are on the rise.

I have been in the US since 2016 and moved to NYC in 2019.I have lived in Crown Heights in Brooklyn and then in Manhattan, Tribeca, Upper West, Upper East, Midtown, West Village, and Soho, and have seen firsthand the rise in rent prices in all these areas.

We expect New York real estate prices to continue to rise and vacancy rates to remain low.

From an investor's perspective, this willpromise stable rental income, upward rental trends, more efficient property management, and stabilized asset values.

In closing

Thank you for reading this article.I hope you enjoyed it.

As we mentioned at the beginning of this article, New York City has been the center of the world 100 years ago, is still the center of the world today, and will continue to be the center of the world 100 years from now.We hope you understand that real estate investment in such New York has the potential to bring great value.

We are the only Japanese and Japanese company to work withCORE, an American broker, to sell real estate.

The brokerage is a boutique organization with a small number of 30 people, but is the fifth largest in New York State in terms of transaction value, and its representative, Sean Osher, wasthe No. 1 seller (out of 131,488) in New York State last year in terms of sales value.942M (about $145B), making itsecond in the nation.(5th in 2022, with a 10th place person within the same brokerage).

Onodera, the president of Reinvent NY Inc, originally belonged to the same brokerage andis the only Japanese person to work with the company, utilizing his strong connections with local real estate agents in New York Cityto help sell real estate.

Our company, Reinvent NY Inc, continues to support individuals and companies entering or moving to the U.S. in 2019 and offers comprehensive services to support all aspects of real estate investment in New York City.

Please feel free to contact us by filling out the form below to get started.

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