Is New York City Growing?
Depending on the data you study, the City is either dying or surging. Rents are high, but so is outmigration. What's going on?
Thesis Driven dives deep into emerging real estate themes, giving our readers enough context to understand the trend as well as personal introductions to GPs executing on opportunities. This week’s letter takes a bit of a different approach, analyzing New York City’s demographic situation.
New York City remains one of the most puzzling demographic and economic stories of the pandemic. No city got hit harder and was declared dead with as much certainty. Stories of families leaving New York abounded, and the City still tops the charts of post-pandemic population losers.
Despite not yet recovering its post-pandemic population and a steady narrative of crime and decline, New York City’s real estate market is doing—by almost any metric—tremendously well. Manhattan and Brooklyn rents are at all-time highs, and Manhattan residential rental vacancy had returned to sub-3% levels by the end of 2021. And unlike those in many Sun Belt and West Coast markets, New York City rents and home prices largely held up through the back half of 2022 despite the City leading the nation in new unit deliveries over the past year.
These seemingly conflicting sets of facts have led to a wide variety of narratives at odds on the fate and future of New York City. One can easily pick numbers that tell a dire story of perpetual decline. But it’s just as easy to pick numbers that illustrate the city’s resurgence and rebound past even the headiest months of 2018 and 2019. Which view is correct, and what does it mean for the City’s future?
The truth is somewhere in between and perhaps even more interesting. Let’s dive in.