Manhattan: Why Else Should You Buy?
Higher wages and lower unemployment
In the long run, Manhattan’s real estate prices could benefit from the strong wage and employment growth. In fact, between 2009 and 2015, Manhattan was the only borough in New York City where wages increased.
Going forward, the probability of an increase in Manhattan’s wage growth is quite robust—Governor Andrew M. Cuomo announced late last year that he plans to raise the minimum wage to $15 per hour for state workers. This is significantly higher than the current wage of $8.75 an hour and should encourage an increase in rental activity as more people move in to look for jobs.
Additionally, the unemployment rate in New York dropped under 5% in January this year. A combination of higher wages and low unemployment should boost the average household income in New York, which could be a boon for Manhattan’s housing market.
The income in Manhattan, which has grown decade after decade, is already far ahead of the income in the rest of New York City and the national median household income. Therefore, due to a strong employment scenario and wage growth, the demand for homes for both ownership and rental will go up, strengthening the real estate market.
All in all, due to improving employment conditions, it could be a good time to buy a two-bedroom home in Manhattan. Although you would be buying at one of the highest points in the last ten years, you need to take a closer look at the specific areas to avoid the pitfalls of a weak rental yield growth or a decline in the average price per square foot.