By: Hadassa Kalatizadeh
New York City real estate is picking up the heat, as California buying from technology sectors have been scooping up residential properties.
As reported by Crain’s NY, well-to-do tech execs from California are leaving the Pacific Coast and heading for the city, as Manhattan emerges as a tech hub. While the city was once known as the financial sector, now new young professionals from companies like Google, Facebook and Disney, have made it their home. The wealthy newcomers are leading a vivacious quarter for real estate, pushing sales and bidding wars. As per city brokerages, home sales have more than doubled year over year.
“There’s this new wealth that has entered the marketplace in the tech industry,” said Compass agent Leonard Steinber, referring to the jump in California buyers. “People used to say that all big money came from finance.” As banks have been fleeing the city for lower cost office space in Florida, big tech companies have been streaming into the city building new headquarters.
Google has spent roughly $1 billion to create a vast HQ, with three properties in Hudson Square. Facebook has signed a lease taking on approximately 2.2 million square feet of office space in Hudson Yards as well as at the Farley Building in Midtown. Disney is also building a 1.2 million-square-foot headquarters. Each of those companies will bring thousands of employees, which will enter the city with spending power.
Many of them will be looking for homes close either downtown, to be close to Hudson Square, or the Upper East Side and Upper West Side to be close to good schools for their small kids, Steinberg said. Compass data showed downtown sales made up 31 percent of residential deals overall, while the Upper East Side accounted for 20 percent.
As per Crain’s, while some New Yorkers fled to warmer weather areas, other newcomers from the Pacific are looking forward to Manhattan weather. “I have clients who experienced droughts and fires on the West Coast who do not want to go through that again,” said agent Pamela D’Arc, “Some of them have nearly lost their homes too many times.” Also, some are leaving San Francisco due to crime and homelessness. “The quality of life has dropped, and New York is looking better and better,” said D’Arc.
NYC Buyers keen to grab a bargain have even met with bidding wars. Current bidding war activity is at 6.8 percent of the market, said Jonathan Miller of Miller Samuel. That is a return to the normal range for Manhattan. “The market is normalizing fairly quickly,” he said.
