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Co-op and Condo Values to Rise 7.3% in Coming Fiscal Year

New York City

Residential real estate values, co-ops and condos, interest rates, apartment listings.
Jan. 20, 2025

With co-ops and condos leading the way, residential real estate will lead a rebound in property values in New York City in the upcoming fiscal year, as a dearth of listings and stubbornly high interest rates are expected to keep a lid on sales, Bloomberg reports.

The overall market value of the city’s more than 1 million properties is projected to rise 5.7% to $1.6 trillion in the upcoming fiscal year that begins on July 1, according to a tentative assessment roll released by the Department of Finance. Last fiscal year, values rose just 0.7%, reflecting the Federal Reserve’s aggressive interest rate hikes in an effort to curb inflation.

The picture is even better for co-ops, condos and rental apartment buildings where market values are projected to rise 7.3%. Rents surged after the pandemic, driven by a shortage of inventory. The median rent for a one-bedroom apartment in New York City rose 21% from Feb. 2020 to September 2024, according to the city comptroller’s office.

Brooklyn is expected to lead with an estimated market value jump of 9.4% as rental apartment values in the borough climb 15%. The data reflect real estate activity from Jan. 6, 2024 to Jan. 5, 2025 as well as expense information for commercial properties during calendar year 2023 and submitted to the Department of Finance in 2024.

But inside every silver cloud, there's a dark lining. In this case, it's the fact that rising values will bring rising property taxes. Real estate taxes are pegged to a property's assessed valuation, and they're the biggest contributor to New York City’s coffers, providing almost one-third of the revenue for its $115 billion budget. Property taxes are also the primary source of funds backing the city’s approximately $42 billion of general obligation bonds. As apartment values rise, the city can be counted on to collect higher property taxes.

There are even signs of recovery in the closely watched commercial real estate sector. With more workers returning to the office the total market value of commercial properties are expected to climb 3.8% to $339.5 billion, while assessed values are projected to rise by 2.9% to $135.9 billion. Trophy office buildings are leading the bounce.

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