NYC has always been one of the most expensive places to live in the United States. Over the past 20 years, real estate prices have gone through major ups and downs due to big events like 9/11, the 2008 recession, and the COVID-19 pandemic. In this article, we’ll look at how much the average cost per square foot is in NYC in 2025, compare it to past years, and explain why the market keeps changing.

Average Cost Per Square Foot: Then and Now

Let’s start with the numbers. In Manhattan, one of the most tracked real estate markets in the U.S., the average price per square foot (PPSF) has changed a lot over the years:

  • 2005: Around $984 per square foot
  • 2015: About $1,563 per square foot
  • 2025: Roughly $1,349 per square foot

As you can see, the price shot up between 2005 and 2015, then dipped by 2025. But even with the drop, prices are still much higher than they were 20 years ago.

What Caused Prices to Rise So Fast?

Several things caused prices to rise so quickly between 2005 and 2015:

  • Luxury condos: New high-rise buildings with expensive units became popular, especially in Manhattan.
  • Foreign buyers: Wealthy investors from overseas saw NYC as a safe place to park their money.
  • Low interest rates: Borrowing money was cheap, which made it easier for people to buy homes.
  • Strong economy: The U.S. economy grew steadily during this time, making people more confident in buying property.

This led to a real estate boom. In some neighborhoods, especially in Manhattan and Brooklyn, prices doubled in just 10 years.

COVID-19 Changed Everything

In 2020, COVID-19 hit New York City hard. Suddenly, the things that made the city so attractive—restaurants, theaters, public transportation—were shut down.

Many people left the city to find bigger homes in the suburbs where they could work remotely. That sudden shift led to a drop in demand for city apartments and condos.

By 2025, things will be more stable, but the market is still recovering. The average price per square foot is lower than in 2015, but not by much. NYC real estate is still expensive compared to most U.S. cities.

How 9/11 Shaped NYC Real Estate

The terrorist attacks on September 11, 2001, had a big impact on the real estate market, especially in lower Manhattan. After the attacks, people were afraid to live or work in the area.

However, by 2005, confidence had returned. Rebuilding efforts and government support helped the market recover. In fact, real estate values in the Financial District and surrounding areas slowly began to climb again as the city rebuilt and added new attractions like the 9/11 Memorial and the Freedom Tower.

What’s Next for NYC Real Estate?

The future of NYC real estate depends on a few key things:

  • Remote work: Will people keep working from home, or will they return to the office?
  • Interest rates: If mortgage rates stay high, fewer people may buy homes.
  • New construction: More housing supply could help ease prices, especially in outer boroughs like Queens and the Bronx.
  • Global stability: NYC attracts global investors. If there’s economic trouble abroad, it may affect local real estate.
  • Still, New York City remains a global city. People want to live here for the culture, the jobs, and the energy. That’s why demand, especially for well-located properties, will always exist.

Final Thoughts

New York City real estate has changed a lot since 2005. Prices went up, then down, and are now finding a middle ground. Major events like 9/11 and COVID-19 left lasting marks on the market. However, one thing remains the same: NYC real estate is always in demand.

If you’re thinking about buying or selling in the city, it’s important to understand these trends and work with someone who knows the market. Even with its ups and downs, New York remains one of the most exciting and valuable real estate markets in the world.