New York City’s housing market is undergoing a powerful rebound, fueled by New Yorkers trading up, out-of-staters moving in, and others looking beyond the pandemic’s aftershocks to make a long-term bet on the city. On the flip side, Boise prices are up 25% year over year.  How can both NY and Boise be hitting records?  What does this mean for the future of real estate values?  Which city will win the tug of war?


How is real estate in both NY and Boise performing?

  • New York Real Estate:

    • More than 4,500 Manhattan condo and co-op sales closed from July through September, according to a Douglas Elliman market report. That marked the most third-quarter sales in more than three decades, the firm said.
    • “Many of these people saw what happened after the [housing market] collapse in 2008,” said Donna Olshan, head of Olshan Realty Inc., a New York residential brokerage firm. “They saw that when New York goes on sale, it’s for a short period of time.”
    • Unlike past New York City real-estate frenzies, when overseas buyers lifted prices higher by gobbling up pied-à-terre and investment properties, Covid-19 travel restrictions meant foreigners factored less into this rally. International buyers accounted for only 11% of new-development sales in the third quarter compared with about 28% two years earlier, said Pamela Liebman, CEO of Corcoran, a real-estate agency.
  • Boise real estate:

    • Boise’s market continues to be one of the hottest markets in the West with the median home price surging 72% in four years. 
    • Currently Boise prices have increased 25% just in the last year.
    • If anything, the COVID-19 pandemic exacerbated the area’s housing woes, with more people lured to the City of Trees from major metro areas, such as San Francisco, as people sought more affordable remote-work housing and an outdoor-centric work-life balance.

How can both Boise and NY real estate experience booms?

When you look at the data, it shows a net loss of residents in places like NY with a net gain in places like Boise.  Based on this information, one would expect that NY would decline due to less demand and residents and Boise would increase due to more demand along with new residents.  The puzzling question is: why are both markets appreciating and should they?

Why is NY real estate still appreciating?

  • Draw to knowledge centers with cultural activities, nightlife, etc…: There is a reason that many like cities and Covid did not change these desires for most. Many still want nice restaurants, nightlife, cultural activities that cities offer
  • Companies will return to the offices of NY: As cultural and other city amenities open back up companies will likely be drawn back to these same locations for the same reasons as pre pandemic
  • Bet on NY coming back stronger than before Covid: NY real estate prices are rising as buyers are voting with their wallets that there will be strong national and international demand for real estate in the city.


Why is Boise real estate still appreciating?

  • Cost: Boise is considerably cheaper than any of the coastal markets or even the larger intermountain west cities (Denver, Salt Lake City, etc..)
  • Belief that fully remote/work from home will continue into perpetuity. There is a big bet by many workers that they will be working remotely forever which will allow them the flexibility to live in a place like Boise.

Is Boise or NY real estate the winner?

Economics is a zero-sum game and there will be winners and losers, who will win in this tug of war; Boise or NY?  You can substitute Boise in for any Western city (Denver, Salt Lake City, Las Vegas, etc..) and NY for any coastal city (San Francisco, Seattle, Boston, etc… ).  Unfortunately there cannot be a flight from NY while at the same time huge gains in real estate.  Conversely if people are buying houses in NY or other coastal markets this would lead to less demand in places like Boise.  Here are four theories:

  1. Work from home will not be 100%: In the last several months more companies have announced work plans that require in person work.  It would be difficult to work from Boise if you worked for a NY company that required you in the office 3 days a week.
  2. The idea of knowledge centers is not dead: Before Covid there was considerable research done on “knowledge centers” where a bunch of like-minded people live/work. For example Silicon Valley has been a hub for chip innovation and web innovation (Facebook, Intel, Yahoo, Netscape, etc…).  The theory of knowledge centers is not dead and is difficult to emulate.  Companies and workers will migrate back to these knowledge centers.
  3. Boise’s biggest advantage is cost: As costs continue to increase in places like Boise, the tradeoffs become harder.  For example, the average cost of a house in Boise is now 500k, the difference in renting a two-bedroom apartment in the city is now closer so the motivation for Boise is diminished as costs increased.
  4. Maybe both are overvalued: As Boise and NY have both increased, this leads to the theory that both markets might be getting a bit overvalued, but this still leads to the question is one more overvalued than the other one?


The pull between Boise and NY is playing out in cities throughout the country.  This leads to the question: which city will win?  I am going to hedge my bets on NY and other metro areas throughout the country.  I think the market is grossly undervaluing the draw of cities that will continue to attract young professionals and subsequently businesses.  I also think that employees are overestimating the number of companies that will be 100% remote in the future.  Even if companies allow full remote work, the employees in the office will get more opportunities for career advancement as they are closer to the boss; the adage out of sight out of mind still is true which will ultimately draw more back to the office.

Furthermore, I’m a big believer in following the money.  There are some extremely smart and wealthy people betting with their wallets on NY real estate and other cities throughout the country.  With this many people hedging that NY and other cities are going to come back even stronger, I would be hesitant to bet against them.


Additional Reading/Resources





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Written by Glen Weinberg, COO/ VP Fairview Commercial Lending.  Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors MagazineThe Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.


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