New York City is known for its iconic skyline and throngs of people -- and it could also constitute a solid investment if you're looking to move into the residential space. Here, we'll review the state of the local market and take a deep dive into a few key neighborhoods it pays to put on your radar.
New York City has a long history of attracting renters from all walks of life. It's distinct boroughs also make it a prime spot for residential real estate investors. The coronavirus pandemic has had a huge impact on New York City's residential real estate market. While New York City rentals may be harder to sell at present, the city is also prime for a major come back once the coronavirus crisis comes to an end and normal life can resume.
The median home price in New York City is $550,000, which represents a 10.2 percent uptick year-over-year. Currently, there's a five month supply of homes for sale. The rental vacancy in New York City is currently 5.1 percent. That's an increase of 0.8 percent year-over-year. Rent prices are down in New York City, driven largely by the substantial number of vacancies in the market. But this is likely to be a short-term phenomenon. Architectural billings are down 5.2 percent. This index fell more drastically on a national level than it did for New York City. Construction costs rose 5.2 percent from the previous year due to the mid-year lumber shortage in the supply chain disruptions. Some New York City construction jobs were also lost during the course of 2020.
Despite the high unemployment rate fueled by the pandemic, New York City is home to a number of thriving industries. New York City houses a number of leading investment banking and financial firms. The city is also home to a number of renowned hospital systems, including New York-Presbyterian, NYU, Mount Sinai, and Lenox Hill. Many media companies are located throughout the borough of Manhattan, with a large concentration in midtown. New York City houses a number of notable tech companies, including Spotify, Bloomberg, and Google.
Morningside Heights is a prime spot for investors due to its high concentration of students and academic professionals, perpetually turned a Greenwich Village is a smart investment choice due largely to the NYU Campus that's located smack in the middle of it. The Upper East Side has seen a decline in home prices, making this a good time to scoop up properties at a relative discount. Battery Park City is a residential community that's adjacent to the financial district. Short for Down Under the Manhattan Bridge Overpass, Brooklyn's DUMBO neighborhood features a host of trendy restaurants, cafes, and shops. There are also many tech jobs in the area. New York City has several 100 distinct neighborhoods across its five boroughs.
New York City is home to a number of well-known colleges and universities. This presents a real opportunity for real estate investors to capitalize on the need for student housing. Situated on the Morningside Heights neighborhood, Columbia University is part of the Ivy League. NYU's campus includes over 171 buildings spread between Manhattan and Brooklyn. City University of New York is a network of schools with locations throughout the five boroughs. Some of its campuses include Brooklyn College, Queens College, Hunter College, and Baruch College.
Investing in New York City residential real estate may be challenging in the near-term. But as the pandemic ends, nightlife will open back up, office buildings will reclaim their relevance, and renters will once again clamor for homes to be a part of the action. Given that there's a decent supply of housing available, now is a great time to explore the market. New York City has a strong history of overcoming challenges, and once again, will show its resilience in the wake of the pandemic.