Why Tech Execs Are Flocking to Buy NYC Apartments

As a co-founder of Prevu, I have had the opportunity to connect with and gain insights from homebuyers in New York City and other large metro areas. 

In NYC in particular, there has been a growing trend of apartment buyers working in the tech sector. Engineers and technology executives are increasingly scouring apartments across Manhattan, Brooklyn, and the Long Island City section of Queens. 

This wave of interest from the tech industry in NYC real estate can be attributed to the perfect storm of soaring stock prices for tech companies, more attractive prices for NYC apartments, the influx of engineering jobs in NYC, and the continuously growing list of newly minted startup unicorn millionaires (and billionaires). Even Jeff Bezos is getting in on the action with the recent purchase of three apartments worth $80 million on Fifth Avenue near Madison Square Park.

Historically, New York City real estate had been dominated by buyers from the financial services and media industries, with additional interest from successful doctors and lawyers. Today, tech executives are playing a pivotal role among the pool of NYC apartment buyers. 

So, why are tech execs and engineers flocking to buy NYC apartments?

Jobs, Jobs, Jobs 

New York City is finally getting the credit it deserves as a tech community that can rival the West Coast’s Silicon Valley with a plethora of engineering, design, and growth-oriented jobs. Over the past decade, tech industry jobs have grown by 80% in New York City.

First, there is an increasing presence of high-income jobs from publicly-traded technology companies, including a few members of the trillion-dollar market cap club. Recent media reports confirm that Google, Amazon, and Facebook are all snapping up office space to bring even more jobs to NYC in the next few years — with locations primarily along the West Side of Manhattan.

Second, NYC’s original tech area — affectionately termed "Silicon Alley" and located in the historic Flatiron District — continues to welcome venture-backed startups and a growing number of recently annointed unicorns. 

Overall, this rise in innovation jobs creates greater stability for successful engineers to consider buying their first NYC apartment.

Attractive Prices 

Federal tax reform passed in late 2017 (including deduction caps on state and local income taxes, also referred to as SALT), coupled with less demand from foreign buyers, and new graduated mansion tax rates imposed in mid-2019 drove NYC apartment prices down to current levels.

After three years of steady declines, NYC apartment prices have plateaued, kicking off 2020 with opportunistic buyers stepping in to purchase homes from sellers who have come to terms with market conditions.

With the influx of engineers and tech execs moving to New York from areas like San Francisco and Seattle, entering a buyer’s market is a welcome change from chasing inflated prices in other established tech cities.

Lower Mortgage Rates in 2020 vs. 2019

Mortgage rates aren’t usually an exciting topic, but when you’re planning to buy an apartment in NYC and rates are lower than they’ve been in previous years, it is very exciting! 

Lower mortgage rates have two potential benefits: 1) Increased buying power (if you want to splurge on that bigger apartment you always dreamed of), or 2) decreased monthly payments on the same purchase price.

Tech-Driven Home Buying Experiences

If you are an engineer, UX designer, or growth professional at a publicly-traded tech company or startup, you probably have high expectations when it comes to consumer experience. 

Luckily, there are modern real estate brokerages in NYC that are providing more sophisticated buying experiences. One of them even gives you cash back on your apartment purchase.

Prevu is a digital home buying platform focused on saving buyers money with an industry-leading commission rebate. By leveraging technology to deliver a hassle-free online buying experience, Prevu’s team of local experts is able to offer a commission rebate to buyers in NYC.

NYC Neighborhoods Attracting The Most Attention

With the clustering of tech offices along the West Side of Manhattan from SoHo up to Hudson Yards, plus many startup offices concentrated in Flatiron, all you have to do is follow the subway lines to determine where people want to buy apartments.

Neighborhoods with access to the West Side subways (A,C,E and 1,2,3) as well as the L train are attracting the most folks from the tech industry.

Below is a list of the top 10 neighborhoods attracting apartment buyers from the tech sector based on a recent survey of Prevu buyers.

Top 10 NYC Neighborhoods Tech Execs Are Buying In

• Chelsea
• West Village
• Tribeca
• Flatiron District
• Hudson Yards
• Upper West Side
• Williamsburg
• Long Island City
• Downtown Brooklyn
• Park Slope

The Trend of Tech Hubs Will Continue

New York City is not alone in the surge of Silicon Valley alternatives. With the rise of remote work, corporate tax incentives from growth cities, and tech professionals seeking a change from San Francisco, the trend of new tech hubs will likely continue.

In addition to NYC, a few examples of these tech hubs that are driving housing demand include Austin, Boston, Chicago, Denver, and even Los Angeles.

What the Tech Surge Means for the NYC Real Estate Market

Increasing demand (and budgets) are always a good sign in the real estate market. As more tech companies grow and establish roots in NYC, they will continue to attract high-level talent to the metro area. This will in turn heighten demand for local real estate.

I expect NYC and surrounding areas to continue to see an influx in tech professionals moving into the region.