For the past five years, Westchester and Yonkers have become the next step for New York City residents who can no longer afford Manhattan or the outer boroughs. Data supports this story: prices in Yonkers have climbed 6 to 11 percent year over year, with some neighborhoods appreciating even faster. However, beneath these headline numbers lies a more nuanced reality about migration patterns, affordability constraints, and where experienced investors are allocating capital, according to Rummy Dhanoa, Team Leader and Principal Broker at eXp Realty.
Dhanoa outlines a clear sequence of buyer movement out of New York City. When Manhattan studio condos hit $500,000, buyers moved to Queens. As multifamily properties in Queens rose to $1.3 million, buyers turned to the Bronx. Once the Bronx became unaffordable, buyers focused on Yonkers. This migration is not theoretical, Dhanoa says, but a well-documented trend that has unfolded over the last 15 years.
Dhanoa uses his own investment as an example. Fifteen to twenty years ago, he bought a three-family house in Yonkers for $450,000. At the time, it generated $4,500 to $5,000 in monthly net income. Today, the property sells for $850,000 to $900,000, nearly doubling in value. Property taxes and insurance have increased, but rental income has also grown. This has kept returns strong for early buyers.
This pattern, Dhanoa explains, has been driven by buyers and investors chasing affordability. As each market becomes more expensive, people move further out in search of better value. “It’s about the migration,” he says. “People start in one area, save money, and move where properties are cheaper.”
Dhanoa argues that this migration chain has now reached its limit in Yonkers and Westchester. Prices have risen so much that finding a three- or four-family house with acceptable investment returns is now rare. For most investors, the minimum acceptable cash-on-cash return is 7 percent, but current pricing often falls short of that mark.
In practical terms, Dhanoa says, “In Yonkers and Westchester, you’re not going to find many deals that make sense unless you put down a hefty down payment.” The few properties that do offer attractive returns are often outside the immediate area, requiring investors to look further north or into adjacent states.
Consequently, capital that once focused on Westchester is now moving to Connecticut, upstate New York, North Carolina, South Carolina, Pennsylvania, and Virginia. Investors are also considering New Jersey, where three-family homes in select areas still trade for around $350,000 and can meet return targets.
“You can find something in Connecticut or, if you go further upstate, like Orange or Dutchess County, you can definitely get better numbers,” Dhanoa says.
Dhanoa notes that the supply of investment-grade multifamily properties in Westchester and Yonkers is shrinking. “There’s nothing available unless the rents are extremely high,” he says. While some properties are on the market, few meet the criteria for solid investment unless they offer unique features or are priced well below recent sales.
Recent transactions illustrate the point. Dhanoa’s team recently sold a three-family home with an in-law suite for $950,000—a property that still made sense for a buyer seeking both primary residence and rental income. But such opportunities are increasingly rare, and most attractive deals are now concentrated in new construction, homes with flexible layouts, or properties that can serve as both residence and investment.
Investors are also broadening their search beyond residential. Dhanoa observes that commercial buyers are now looking upstate, in Connecticut, Virginia, and Pennsylvania, as rising prices and compressed returns make Westchester and Yonkers less appealing.
Institutional investors looking at single-family rentals in Westchester or Yonkers face challenging numbers. Achieving acceptable returns now typically requires either large down payments or accepting weaker cash flows than those available in secondary or tertiary markets. The very migration that fueled the region’s growth has also set the ceiling for further appreciation and return.
Dhanoa’s team at eXp Realty has responded by following capital flows into North Carolina, South Carolina, Connecticut, and New Jersey. “We started expanding into North and South Carolina because we know investors are already pulling out and looking for better opportunities elsewhere,” he says.
Whether Westchester and Yonkers will see a price correction or simply a period of slow appreciation remains uncertain. What is clear, Dhanoa says, is that the investment logic that once brought capital into these markets no longer works at current price levels. Investors who bought early continue to benefit, but new entrants face far slimmer margins.
The shift is already visible in market behavior. Investors are less active. Inventory is staying on the market longer, and buyers are becoming more selective about property type and location. The days of easy returns in Westchester and Yonkers appear to be over, at least for now.
For buyers and investors considering the region, the message is clear: the migration trend that once made Westchester and Yonkers a haven for value-driven investment has run its course. Today’s opportunities lie further afield, in markets where prices and returns still align.
Dhanoa’s experience reflects a broader pattern across the Northeast. When a market reaches affordability limits, capital moves on, reshaping investment maps in real time. For now, Westchester and Yonkers are no longer at the center of that story. Investors seeking strong returns must be willing to look beyond the familiar, following the same logic that brought them there in the first place.
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