NYC Property Values Rise 6%, Led by Single-Family Homes

Any impact of office vacancies on the overall value of NYC properties has been offset by the surge in single-family home prices last year—based on the city’s latest assessment, which projects a 6.1% increase in NYC property values for the fiscal year beginning in July.

According to a projection released this week by NYC’s Department of Finance, the city is setting a market value of $1.48 trillion for the estimated 1.1M properties in NYC. The citywide assessed values—the value of property for tax purposes—have been set at $287B, a 4.4% increase.

“The decline in office occupancy continues to impact retail stores and hotels in the city, contributing to the sector’s slow recovery. At the same time, single-family homes, which constitute a majority of residential properties, have exhibited a robust recovery and continued growth,” said Preston Niblack, commissioner of the Department of Finance, in a statement.

The property values for FY 2024 reflect real estate activity from Jan. 6, 2022 to Jan. 6, 2023.

The estimated market value of single-family homes rose 8.3% across NYC to $765B, with properties in Staten Island registering the largest gains among the five boroughs at 12.1%, the city’s projection said. By comparison, the values for co-op, condos and rental properties rose about 1% to $351B.

Commercial properties also fared well in the Department of Finance projection, rising 7.4% to $317B. This includes offices, which rose in market values by 7.1%; retail building (5.4%) and hotels (9.7%).

In June, a joint research team from NYU and Columbia University studying the impact of remote work on office properties said office buildings will lose 28% of their value by 2029 if remote/hybrid work patterns become the norm.

In an academic paper entitled Work from Home and the Office Real Estate Apocalypse, the team projected that the overall “value destruction” in the US office sector could total more than $500B by 2029 if hybrid work takes root and lease revenue shrinks along with office footprints.

The research team, including Arpit Gupta of NYU’s Stern School of Business, Vrinda Mittal and Stijn Van Nieuwerburgh—both from Columbia University’s Graduate School of Business—studied the impact of remote work on the commercial office sector.

The national projection of $500B in office value destruction was an extrapolation of the team’s analysis of the NYC office market, which the research paper found would lose an estimated $49B in valuation by 2029.

The team says it documented large shifts in lease revenues, office occupancy, lease renewal rates, lease durations and market rents as firms shifted to remote work during the pandemic.