It’s an established belief that while real estate prices in most places will skyrocket and then eventually drop, the bubble in New York City shows no signs of bursting at any point in the foreseeable future. It’s noteworthy that a certain billionaire named Donald J. Trump had inherited and increased his fortune from investment in New York real estate, with the implication that real estate development has been extraordinarily profitable for decades and this trend shows no signs of abating anytime soon. Another interesting factor is the number of foreign investors who pick New York real estate as a safe and profitable option – if there were signs that there was a risk of any decrease in demand or value, this simply wouldn’t be the case. In other words, it’s quite obvious to investors that due to unceasing demand, investing in real estate in NYC simply doesn’t carry the inherent risk of a boom and bust scenario common almost everywhere else. This makes the situation in New York City rather unique, so it’s necessary to understand what exactly it is that investors like Joseph Sitt are looking for in NYC urban real estate development.
Interestingly, while the housing crash of the late 2000s affected property values across the United States, the Brooklyn real estate market (in particular) hardly showed any indications of decline. A rising population combined with the fact that New York still lags behind other cities in constructing new housing units might help explain the perennial growth in profitability of its real estate sector, but the annual rate of increase in value is still astonishing even considering the disparity between supply and demand. This is especially notable when one considers that the rental market in the city mostly stays flat from year to year, quite the contrast to property values.
Trump is hardly the only celebrity who’s been involved in urban investing in New York City, though he’s one of the few who was involved before he became a celebrity. Former NBA star David Robinson founded Admiral Realty Capital in 2007, but other names including Tom Brady, Jimmy Buffet, Mo Vaughn, and numerous others have found themselves involved in the New York real estate business in some way or the other, along with numerous foreign dignitaries and businessmen.