Real estate really sucked in 2020. Prior to that year, I had been purchasing and flipping properties in North America for a number of years. I wouldn't go into a project unless I knew I could get at least double in return from my purchasing price based on my ability to develop and renovate property relative to a specific area. Things had been going really well with my biggest flip going from a purchase in the low 40s to selling near 200k within a few months. My dream was to eventually focus on flipping Manhattan properties since I had mostly concentrated on houses.
I love the idea that space is limited yet so valuable in such a robust city like Manhattan. I was, and also still am, a strong supporter of the idea that if you can make it in New York, you can make it anywhere. By the beginning of 2020, I had prepared some assets to acquire my second property in Manhattan (the first purchase was strictly for my own residential purposes, and that condo didn't need any work). Unfortunately, the pandemic hit, and everything went completely cold. I spent the rest of the year building more funding through investments in the stock market, and analyzing how the real estate market was developing in light of the pandemic.
Historically speaking, New York has always rebounded
I read a lot of articles through various publications including the New York Times, Brick Underground, Realtor Lowdown, and StreeEasy reports. While the articles were interesting, I focused a lot on the article comments since I felt like those were just that much more unfiltered. Basically, there was an ongoing debate on whether the market was better or worse off than previous catastrophic times (e.g. 9/11, the financial crisis of 2007-2008, etc.). It was very fifty-fifty in terms of opinions. Half the commentors felt like the pandemic was worse than any other previous historical disasters while others were optimistic that New York would recover.
For 2022, I feel like I'm somewhere in the middle. Comparing articles and comments that were written before vaccinations became more readily available versus when vaccines did become available showed sharp contrasts in opinion. I think that a lot of the market will be impacted by the rate of vaccinations completed. This also needs to correlate with other available options for those who no longer see Manhattan as a mecca of awesomeness and opportunities since remote work has definitely started becoming more of a norm. If everything happens to move in the direction things currently are moving in then I believe that Manhattan will eventually recover, but to hit pre-pandemic prices, it will take at least a few years so 2022 will not accurately reflect peak prices. I really feel like 2024 will be a year for grounding New York's stable point of normalcy, and there are some reasons behind my prediction for this.
Why 2022 will still be a year in progress
According to the New York Times, Facebook has huge development plans in Hudson Yards, but these are not going to be completed by 2022 (more like the 2024 I had mentioned). Other tech giants like Amazon and Google have similar plans. So for the big entities, I think that the next few years will be used to build and develop spaces. They will likely be monitoring office work trends and how current spaces and future spaces must adapt to those trends. A lot of commercial space will likely go the same way with communal work spots that can be rented out becoming healthy competition against traditional offices.
Another reason why 2022 will be a year in progress is because there are still a number of properties stuck in inventory. While 2021 has seen a spike in properties that went into contract, there are still a number of property sellers that held onto their properties throughout 2020 hoping for higher prices. I think that the market will even itself out with buyers and sellers balancing out the current supply and demand. 2021 will likely just be a year where sellers come to terms with negotiating their property prices, but only if they're actually inclined to sell.
What will be the best places in Manhattan to invest in real estate going into 2022?
Considering that both big tech companies, and the city itself (just look at the changes done to Penn Station) have an interest around Hudson Yards, I think that for those with enough dough available, that area will have a bright future. Anyone who watched the market carefully in 2020 might still have enough time to buy up the best deals on properties in Midtown East in places such as Turtle Bay and Sutton Place especially with the city's interest in reinvesting in Midtown East. I'm imagining the employee who works at Facebook's new offices, doesn't feel like living in Hudson Yards, and can easily bike from Midtown East to work.
Areas I would be wary of (at least for the time being) would be Lower Manhattan, and parts of the Upper West Side. Both areas are facing a lot of politics at work, and new housing plans will impact prices of properties in those spots. Additionally, the Upper West Side faced disputes between locals and politicians over the homeless housing hotels. The sections of Lower Manhattan that will likely perform the best are places that are convenient for NYU students, but again, one thing to factor in would be the length of time needed for prices to recover to pre-pandemic levels.
Bottom line: don't buy property in Manhattan in 2022 if you're just trying to get rich
I think that New York has been, and will continue to be a melting pot of the world. 2022 is not going to change that, it will only allow the city to continue growing from the pandemic which I see as a hurtful, but manageable blow. None of the articles I read through discussed investing in real estate in Manhattan in terms of supporting the city itself. They just mentioned the types of current buyers: young buyers who had previously been priced out, and those who were curious about city life. There is a whole other sect of people who will return to the city with time. It includes the endless amounts of visitors that fuel the city's incredible multiculturalism, and those who want to work together to shape the city's future for the better. For my planned investments in the city, I probably could have bought a number of already beautifully-renovated homes in other cities that even include a washer-dryer unit and a dishwasher, but something about the charm of Manhattan is incessantly alluring. Ironically, as much as New York has always been about money and power, sometimes the incentive to actually live in the city and be a part of the city are more than such superficial things - it's about contributing to a future one believes in.