Bloomberg News reports that the 1.1 million properties’ value in New York City will surge by 6.1% in the next fiscal year. The price of single-family homes will foster this value.
The city set a market value of $1.48 trillion for commercial and residential properties. This figure is set for the next fiscal year that begins in July, according to a Department of Finance’s tentative assessment released on Tuesday. On the other hand, the assessed values citywide that decide the property value for tax purposes are anticipated to rise 4.4%, recording the figure at $286.8 billion.
What do the Property Values for 2024 Reflect?
For the fiscal year 2024, property values give clues about the real estate activity between January 6th, 2022, and January 5th, 2023.
Taxes related to real estate properties have contributed the maximum to New York City’s coffers, providing approximately one-third of the revenue for a budget of $106.4 billion. The other source of funds includes property taxes which back New York’s $40 billion of general obligation bonds.
Sales have Lost Tempo
Bloomberg News reports that the market value of single-family properties surged 8.3% across the city, recording the figure at $765 billion. It was also found that the homes at Staten Island manifested the largest increase in value at 12.1%, per the finance department. In the meantime, the values for co-ops, rental apartment buildings, and condos surged by 1% to $351 billion.
It was found that in the latter part of 2022, the residential market slowed down. This happened due to the aggressive campaign of the Federal Reserve to raise the interest rates when profits on Wall Street were declining.
For straight quarters, the sale of homes in the city has dropped annually and declined to 17% below a year-ago level in the 3rd quarter. The same is projected to drop to approximately 5% in 2022 and 2023, as per the finance department.
What about the Office Market?
In the meantime, the office market in New York City is struggling as the workers are returning slowly to work as there is still uncertainty about remote work.
The market values of the offices surged by 7.1%, and that of the retail buildings and registered hotels manifested a market value of 9.7% and 5.4%. For commercial properties, the market value is still at levels that existed before the pandemic.
A surplus of new inventory coupled with weak leasing activity, especially in midtown, caused the vacancy rate to swell by 22% in November.
The city officials anticipate that this vacancy rate will escalate further in 2023. Meanwhile, asking rents might drop to the lowest levels, which will be the lowest ever in decades. This was released as per a financial plan released in the preliminary budget of Mayor Eric Adam.
