By Lokel Realty Group • Brooklyn, New York
Why Does Everything Feel So Expensive Now?
Because most things are.
I used to say that there were two things you could get cheaply in New York: laundry and barber services. I don’t know if that is still the case for laundry because we have a washer/dryer in our apartment. However, in my early years in New York, I was rather broke and lived in a Chelsea walk-up with no laundry in the building. Working long hours, I became accustomed to dropping it off at the local laundromat for full service. It was cheap, and I just loved the way my clothes came back perfectly and tightly folded.
Barber services, on the other hand, I know are significantly more expensive. Despite being hair-deficient, I still need to visit the barber (even more frequently with my buzz-cut style). For years, I paid $25 plus a 20% tip for a #1 head and beard clipper cut (it’s not that complicated). Barbers in NYC now charge almost double that. I also became accustomed to tipping more during Covid because I felt compelled to support my local small businesses and that tipping protocol has stuck.
The Stickiness Problem: Why Prices Haven’t Come Back Down
Which brings me to inflation and more specifically, sticky inflation. Inflation is bad, but I have discovered that the stickiness of it is even worse. The barber scenario is the perfect example. What used to be $30 is now $60, and it has stuck. The higher tip expectation also seems to have stuck (and not just at the barber).
What exactly happened? At the highest level, the simple answer is inflation. But the reality is more nuanced and more persistent than what the headlines suggest. During the peak inflation cycle in 2022, consumer prices rose at the fastest pace in over 40 years, topping out above 9% (Bureau of Labor Statistics). While that number has since cooled into the 3–4% range, that doesn’t mean prices have come down. It simply means they are rising more slowly. The step-up already happened, and it has largely stuck.
In addition, labor and insurance costs are higher (and get passed down). Supply chains were disrupted or in some cases permanently altered and businesses adjusted to survive. Add to that the post-Covid surge in demand for experiences and luxury items (have you tried to buy a Rolex watch or a unique Hermès handbag in the last five years? It’s not an option without a long wait). Now you have a perfect storm for sustained higher prices.
The NYC Premium: Expensive Has Always Been Relative
Now layer New York City on top. New York has taken it to another level, as it always does! The national news is very focused on the cost of groceries. As a New Yorker, it’s hard to relate to that not because I am out of touch with reality (a New York reality), but because there are so many other big-ticket costs required to survive and thrive in NYC. Groceries are obnoxiously expensive in New York, premise accepted by all who live here.
I do notice the smaller items, though. For instance, a glass of wine at a restaurant is now $20 or $30. Entrées at $50 or $60 are not uncommon, even at a place without a Michelin star. In any event, it is no secret that New York is much more expensive than almost anywhere else in the country (and the world). It always has been and always will be for a reason. And yet, this is the part I find fascinating (and heartwarming): people are not leaving en masse. They are still coming. Staying. Investing.
From Cost to Value: What New York Actually Delivers
But I would like to shift the conversation from cost to value.
New York delivers value in a way no other city can. We live in a city where you can walk out your front door (yes, walk) and choose between world-class dining or the best diner food you’ve ever experienced; Broadway theater, off-Broadway, opera, ballet; the best museums; or the best people-watching anywhere just by sitting in Central Park.
The energy is constant. The opportunities are limitless. The diversity of people, ideas, and culture creates something that simply cannot be replicated. It’s where industries are built, where careers accelerate, and where creativity thrives. There is a rhythm to New York, a pace, a level of engagement with life that is hard to describe but instantly recognizable once you’ve experienced it. And yes, there is a price attached to that.
But for many people, that price is a trade-off they are more than willing to make.
Why People Keep Choosing New York — and What That Means for Real Estate
I see it every day in my work: incredibly talented people at the top of their industries who could go anywhere they choose, any city. But they choose New York because of what it offers, both personally and professionally.
Even in a moment where everything feels more expensive, the demand to be here remains resilient. And that, to me, says something important. Very few people are immune to the impact of higher costs. But when it comes to where we choose to live, work, and invest, the decision is rarely based on price alone. It’s based on what you get in return.
And in that equation, New York City continues to stand in a category of its own.
That’s why we help our clients find the best value in every neighborhood. Whether you’re buying, selling, or just curious about what your home could be worth, we’d love to have a conversation. Reach out to Lokel Realty anytime.