New York (NY) state is one of the most populated states in the U.S and one of the world’s most crowded megacities, with approximately 19.5 million people in the metropolitan area. New York is renowned as financial multicultural capital, with strong influence leadership in the sectors of technology, commerce, tourism, art, entertainment, Research and Development, politics, sports, real estate, and international relations.
The state is divided into five regions: Manhattan, Brooklyn, The Bronx, Queens, and Staten Island.
The major characteristics of New York City are cultural diversity, along with creativity, and entrepreneurship.
In 2019, New York accomplished a world record of 13.6 million visitors according to the 2019 Euromonitor International report. (source: https://bigseventravel.com/2020/01/the-most-visited-cities-world-2019/)
Manhattan’s region is among the most expensive and powerful real estate markets in the world with relevant stability on the prices and demand.
New York has excellent infrastructure with 24/7 services in almost every means of transportation, has 120+ universities and colleges, and is the capital of Wall Street, NASDAQ, and many other world-renowned companies.
New York Taxation and Legal System
The United States’ multiplicity legal system is based on federal law, written constitution, and state law. The federal government, as well as each of the 50 U.S. states, have their own court systems.
The New York legal judicial system is divided into three levels; the Court of Appeals, which is equivalent to the supreme court, the Appellate Division of the Supreme Court, and the Trial courts. The legal system is very extensive; thus, its court links make it a vast and not so easily comprehended system.
Likewise, the tax system is built on both federal and state-level foundations, including several types of taxation i.e. sales, capital gain, income, and others. The state tax levels are entirely distinctive and have an autonomous authority on taxation charges. This structure designates that every state has its own taxation system and retains the solid proprietorship authority of charging and changing taxes according to its needs and political beliefs.
Legal and tax systems’ multilevel structures are very hard to comprehend; therefore, professional consultation is always needed.
New York Economy Brief Overview
It is widely known that New York’s real estate market is one of the strongest in the world. The state possesses some of the highest square–foot pricing properties in the world that targets ultra-high-end individuals (UHNWI) who are wishing to invest and earn a substantial yield. In fact, in 2017, New York City accomplished the record amount of over $1 trillion in property valuation. Therefore, it is justifiably considered as one of the most influential business hubs of the world, with gigantic entrepreneurship operations, i.e. New York Stock Exchange, NASDAQ, Wall Street, etc.
The top industries of New York city that contribute a significant percentage to the State Real Gross Domestic Product (GDP) are finance, trade, healthcare, real estate, media, publishing, manufacturing, and information technology. Indeed, the prominent industries of New York are not just propelling the state’s economy, but they are affecting and establishing their standards on a national and global level.
According to the statistics released by the U.S. Bureau of Economic Analysis of the second and third quarter of 2019, New York had positive leverage of 0.5% on its real Gross Domestic Product (GDP).
Whereas, the contribution percentage changed in New York’s Real Gross Domestic Product, for Q2 and Q3 2019 in the construction, real estate, rental, and leasing industry, resulting in a negative outcome of 0.07% in total.
In addition, according to the 2018 FINANCIAL CONDITION REPORT, Economic and Demographic Trends are defined by the U.S. Bureau of Economic Analysis
“In 2017: New York State’s GDP was over $1.5 trillion, 8% of the U.S. total and ranked 34th in the nation for economic growth, with real GDP growth of 1.1% from 2016, less than half the national increase. The financial activities sector comprised just over 29% of the State’s real GDP. The second and third top industries, professional and business services and transportation, trade, and utilities, together make up 27.2%.”
Additionally, according to the BEA and NYC Controller, New York succeeded in the economic growth of 2.4% in Q3 2019.
Why Invest in New York?
- As far as the overall real estate sector is concerned, New York can be classified as the state of renters, due to the state’s heavy entrepreneurship and business activities. Even though there is constant population mobility, the business and service sector in New York is constantly in a booming stage, while the real estate demand is always high and job growth is a fact and not just a trend, as observed in other states.
- New York is a very famous state for its tourist attractions like Finger Lakes, Adirondacks, Empire State, Niagara Falls, Central Park, Broadway shows, Times Square, and many more. There is a constant flow of tourists all year round; therefore, the tourist sector is constantly increasing.
- The unemployment rate according to The New York State Department of Labor, December 2019, is 3.7% which is relatively low compared to the other US states. This implies that there is a potential employment growth that will inevitably lead to a firmer rental demand, given that the economic, political, social, technological, environmental, and legal environments remain relatively stable without major fluctuations.
- According to the Victoria Shtainer Team at Compass insight information, New York’s real estate market is very strong and is expected to have continuous growth, if it is not affected by the 2020 elections.
As a matter of fact, they stated: “Looking back on the last year, decade for that fact, we saw the following: the market ended 2019 much stronger than it started the decade. The start of the decade was shortly after the Financial Crisis which rattled luxury housing markets such as New York City. 2019 was characterized by low transaction volume for most of the year, with a renewed sense of life observed as we closed the year. Prices were 15% higher at the lowest point of 2019 than they were a decade ago. Additionally, the Buyer’s Market fully took hold in 2019 in Manhattan, and interest rates continued to descend. 2019 did bring various legislative changes that hit the Luxury market hard including the Federal Tax changes as well as the passage of the Progressive Mansion Tax in New York.”
Moreover, a growth continuation is expected in 2020, but the Compass team noted the importance of monitoring the market closely since 2020 is an election year. Hence, the focus should be on the international economic and political events since significant fluctuations in those events may affect the behavior of the Luxury market more than the national average. This has to do with the fact that the real estate market in worldwide centers is significantly affected and directly linked with the macroeconomic growth of the international market.
- Moreover, the findings of the New Foreign Direct Investment analysis of the United States in 2018 and based on the U.S. Bureau of Economic analysis, revealed an increase of 8.7% indirect investment expenditures by foreign direct investors for acquiring, establishing, or expanding U.S. businesses.
“Missouri received the largest investment, but its value is suppressed due to confidentiality requirements. Whereas New York received the significant investment of $63.0 billion, Texas $31.1 billion and California $27.3.”
New York city is one of the most dominant real estate investor hubs of the world, with relative stable prices, capital appreciation and return on investment (ROI) through rental yield. It is a fact that New York state, by default, offers numerous notable opportunities for wealth growth and investing.
- Posted by EkAdmin
- On March 6, 2021
- 0 Comment