New York would be the greatest city in North America if it weren’t for three things: 1) Tough weather for half the year, 2) Never ending crowds, and 3) outrageous prices! I’m currently spending the first week of my four week vacation/blogging research tour in Manhattan and I’m blown away by how much more expensive Manhattan is than San Francisco.
I used to live downtown when I worked in finance from 1999-2001 as a fresh college grad. My base salary for the first half of the year (started in July) was $40,000. Even then I thought $40,000 was pretty low as I could only afford to share a $1,800/month studio with a buddy of mine from high school after contributing to my 401(k). Thankfully our salaries were raised in the second year to $65,000 after Wall St. decided to pay new first year analysts $55,000 instead of $40,000. Still, a base salary of $65,000 wasn’t much to write home about when one bedroom condos were selling for 5X.
Fast forward 14 years later and the 600 square foot one bedroom condos in decent areas of Manhattan are now trading for $750,000+! I’m pretty familiar with these prices because my studio roommate actually bought a $325,000 one bedroom condo near the United Nations in 2000. He’s been looking to upgrade to a two bedroom condo with his future wife, but he’s taken aback by the ~$1.5 million price tag. They just might move out of the city instead. If a condo owner who saw his property’s value grow by 130% can’t even afford to comfortably upgrade to a two bedroom, can you imagine what a renter during this same time period is thinking?