The current state of the New York City real estate market is a topic discussed for quite some time. The economy, population growth, and climate are all factors in how real estate prices have changed over the years. These three factors have affected New York City’s housing market in recent history, the following being some of the main reasons why.
Economy and Population Growth
The economy and population growth are two factors that influence the housing market as a whole. In the past decade, New York City had an average of fifteen to sixteen million people pass through their city borders every year. The New York City real estate market, needs to be as large and diverse as possible, only expecting this number to grow. Population growth, therefore, is a positive factor in the housing market. In addition, the economy has changed over the past decade, which in turn has affected and altered real estate prices. With a more dynamic marketplace comes changing trends for housing needs. This push and pull and adapting to different markets fluctuate prices.
There is a government hurdle that affects real estate prices. As much as the population is growing, there need to be more housing options for those new residents and tourists. Several laws are set in place to help protect the environment, but it also hinders growth and construction efforts. “As a result of this legislation, if an applicant does not already own the property where a real estate development is planned, permission must be granted before any activity can begin on the land” (Bronx Community Board 6). Therefore, it is also a negative factor in the housing market.
Like most things, the climate has its pros and cons. On the one hand, it would be nice if NYC didn’t have any natural disasters to affect the real estate market since it is one of the biggest job providers in New York City. Natural disasters, though, also cause growth through reconstruction and re-development efforts. “Since 9/11…New York has spent approximately $34 billion on various infrastructure and property development projects.”
The factors that have the largest influence on the real estate market are the economy and population growth. The amount of people that come into NYC every year affects how much housing is needed. Also, if housing prices go down, then it becomes more accessible to less wealthy people. Therefore, any change in these two factors will greatly impact New York City’s real estate market.