New York real estate has an estimated market value around $1.26 trillion as of 2018, according to the New York Department of Finance. Some New York neighborhoods are more popular than others, putting upward pressure on home values and mortgage costs. Below we look into the phenomenon to find the New York City neighborhoods with the fastest-growing home values.
We looked at 2012 and 2016 data on median home values for New York City neighborhoods. Check out our data and methodology below to see where we got our data and how we put it together.
Key Findings
- Brooklyn homes are the hottest – According to our data, homes in Brooklyn are appreciating the fastest. In total six of our top 10 neighborhoods with the fastest growing home values are in Brooklyn.
- Staten Island falls behind – Staten Island’s highest scoring neighborhood was Grymes Hill-Clifton-Fox Hills which ranked 70th and had an 5.8% increase in median home value.
1. North Side-South Side, Brooklyn
North Side-South Side refers to a portion of Brooklyn’s famously gentrified neighborhood of Williamsburg. Located just across the East River from Manhattan, this neighborhood has seen the fastest-growing home values in New York.
According to our data, the median home value shot up over 41% in the five years between 2012 and 2016. In total the median home was worth $688,433 in 2012 and grew to $971,633 by 2016 – an increase of nearly $300,000 in value.
2. DUMBO-Vinegar Hill-Downtown Brooklyn-Boerum Hill, Brooklyn
Another Brooklyn neighborhood takes second. Like North Side-South Side this neighborhood is located on the water facing Manhattan. In 2012, the median home was worth just under $594,000. By 2016 that figure had risen to just shy of $809,300. That is equivalent to an increase of over 36%.
According to our data, this neighborhood went from having the 50th-highest median home value in 2012 to the 13th-highest in 2016.
3. East Harlem North, Manhattan
East Harlem covers the northeastern quadrant of Manhattan running north to south from 96th Street to 140th Street and west to east from 5th Ave to the East River. Residents who have lived in northern part of this area recently will have seen a remarkable increase in property values.
Census Bureau data shows the median value of homes in this neighborhood increased by about $30,000 per year from 2012 – 2016, for a total increase of $150,000 or 30%.
4. Ocean Parkway South, Brooklyn
Located in southern Brooklyn, Ocean Parkway South has seen the fourth-highest increase in median home values. Homeowners should be happy to hear the median home has seen its value increase by $180,000 in this neighborhood. That is equivalent to a 26% increase.
If you are looking to buy a home here to take advantage of rising property values you will need some serious savings. The median home here is now worth $863,000, meaning for a 20% down payment, you’ll need $172,500.
5. Carroll Gardens-Columbia Street-Red Hook, Brooklyn
South of the DUMBO-Vinegar Hill-Downtown Brooklyn-Boerum Hill neighborhood is fifth-place Carroll Gardens-Columbia Street-Red Hook. Homes here even in 2012 were pricey. According to Census Bureau data, the median home in this neighborhood was worth $781,300 in 2012. By 2016, our data shows that figure moved up to $978,000.
That’s an increase of over 25% – not a bad return for people who bought a home in 2012, but probably bad news for the area’s renters.
6. Gravesend, Brooklyn
If you are looking for an affordable home with potential to grow, Gravesend may be your best bet. The average home in this south-central Brooklyn neighborhood was worth $632,500 in 2016.
However if you bought a home here in 2012, you would have gotten a better deal. Census Bureau data shows the median home was worth $515,000 in 2012. That means from 2012 – 2016 the median home’s value increased by 23%.
7. Midtown-Midtown South, Manhattan
One of the most touristy and commercial parts of New York, Midtown-Midtown South takes the seventh spot. In total the median home saw its value increase by 23% from 2012 to 2016. The most recent data shows the median home here is now worth $813,600, which would make it the 11th-most expensive neighborhood in the data set.
8. Prospect Heights, Brooklyn
The median home in Prospect Heights was worth about $7,000 more than the median home in Midtown-Midtown South (the No. 7 neighborhood) in 2012 and by 2016 the median home in Prospect Heights was worth $6,000 more than the median home in Midtown-Midtown South. In total, the median home in Prospect Heights has seen its value increase by 22% from 2012 to 2016.
9. East Concourse-Concourse Village, Bronx
The only Bronx neighborhood to occupy this top 10 is East Concourse-Concourse Village. The median home here was worth $70,000 more in 2016 than it was in 2012, for a total increase of 20%. That is roughly an increase in home values of $14,000 per year.
The most recent Census Bureau shows that the median home in this Bronx neighborhood is worth $433,300.
10. Kew Gardens, Queens
Our list ends in Kew Gardens, Queens. The median home here is worth 20% more in 2016 than in 2012. In total the median home in this neighborhood went from being worth $260,000 to being worth $312,000. That is great news for most homeowners. However an increase in property values comes with an increase in property taxes.
Data and Methodology
In order to rank the New York City neighborhoods with the fastest-growing home values, we looked at data for 174 neighborhoods. We came up with the list of neighborhoods by mapping Census Tract data from the 2010 New York City Census. We ranked the neighborhoods using the following two data points.
- 2012 median home value. Data comes from the Census Bureau’s 2012 5-year American Community Survey.
- 2016 median home value. Data comes from the Census Bureau’s 2016 5-Year American Community Survey.
We found the percent change in median home values for every Census Tract in the city. To ensure the quality of our data, we excluded any Census Tract which had a standard error above 20%. Then we found the change in median home values in each neighborhood by finding the average percent change in home values for all the Census Tracts in that neighborhood. We ranked the neighborhoods from highest to lowest based on median home value change.
Tips for Buying a Home
- Start saving early. It can take years of saving before you have enough money to afford a down payment. That means you need to start saving long before you are ready to buy a home. This is especially true in a market like New York with its high home values.
- Watch out for the extras. While the mortgage is the most important part of any monthly home payment, extras like property taxes, homeowners insurance, closing costs and general upkeep are other factors to consider when knowing how much home to buy. For example someone who owns a $500,000 home in New York City will pay may nearly $820 per month in property taxes.
- Stay patient. While it can be frustrating missing out on the home of your dreams it is probably worth it if it means buying a home you can’t afford. If you get into the negotiating part of the home buying process and the price is steering outside of your affordability range, you may need to wait for the next home.
Questions about our study? Contact us at press@smartasset.com.
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