Already one of the most expensive cities on the planet, New York City has been experiencing a red-hot real estate market since 2012. Fueled by global buyers looking for a real estate haven that happens to be at the center of global finance, Manhattan’s condominium market is exploding, with the average sale price skyrocketing to nearly $2 million. The starting sale price for condos in one newly constructed condo tower is $3 million for a one-bedroom. While the housing market in Manhattan gets most of the attention for its astronomical prices, the more affordable housing markets in the outer boroughs of New York City are driving most of the sales activities, lifting the whole area way above pre-housing bubble levels.

Market Insights

As of May 9, 2016, the median home value in New York City was $616,100, up 8.2% over the past year and more than 40% above the market’s low in 2012. Since January 2013, the market’s trajectory has been nearly straight up, with average annual gains of 12%. Zooming in on the Manhattan borough, the median home value is $1.25 million, which is up 50% from the 2012 low. New York City home prices are projected to increase in 2016 by 3.4%.

New York City has been experiencing steady growth in home sales activity since 2011. Although sales in Manhattan have been relatively flat, averaging about 225 sales a year during that period, the other boroughs have experienced significant growth. Staten Island had the biggest increase, growing from 2,071 sales in 2011 to 4,053 in 2015. Queens always generates the most sales activity, and grew from 7,400 sales in 2011 to 9,300 in 2015. Brooklyn had 6,934 sales in 2015, up from 4,971 in 2011, and Bronx had 2,281 sales in 2015, which was an increase of nearly 700 sales over 2011.

Property and Transfer Taxes

For property taxes, New York City is divided into four different classes. Class 1 consists of most residential property of up to three units and condominium buildings with not more than three stories. For 2016, the property tax rate for Class 1 properties is 19.554% per $1,000 of assessed property value. Class 2 includes all other property not in Class 1 that is primarily residential. That could include rentals, cooperatives and condominiums in buildings of 11 units or more. The Class 2 property tax rate is 12.883%. The transfer tax rate in New York City is 1% of the sale price for residences under $500,000, and 1.425% on homes valued at more than $500,000.

Most Expensive Neighborhoods

With the most expensive neighborhoods centered in Manhattan, the ranking tends to fluctuate from year to year due to the low sales activity. One or two large sales can have a big impact on the median sales price in any year. However, three neighborhoods consistently vie for the top three or four spots – Little Italy, Tribeca and SoHo.

Little Italy is currently in the top spot, with a median sale price of $5.412 million, which is a 185% increase over the prior year. Once known primarily as a tourist location, Little Italy is now home to a culturally diverse population of young families and single professionals. Most of the residents live in 19th and 20th century brick apartment buildings that have their original facades preserved, with renovated interiors.

SoHo is typically found at the top spot, but comes in at number two in 2016 with a median sale price of $4.943 million after a 15% decrease over the prior year. The character of SoHo is defined by its fancy shops and trendy coffee shops located among warehouse-converted loft apartments with oversized penthouses that are popular with top celebrities.

Although not quite as glitzy as SoHo, the Tribeca neighborhood has more celebrities per capita. In addition to warehouse-converted loft apartments, Tribeca is home to newly developed luxury high-rises, with apartments fetching as much as $45 million. The median sale price in Tribeca is $3.303 million, which is down 30.4% from the prior year.

Top Real Estate Websites

New York City buyers and sellers have access to several great real estate websites. Two of the more popular sites are and Both sites offer a slew of resources, local real estate news and extensive neighborhood profiles. The real estate section of the New York Times website, replete with a multiple listings service (MLS), is as comprehensive as it gets for a digital newspaper.

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