The real estate market in New York City is experiencing a significant decline in home values in some of the most expensive ZIP codes due to a variety of factors, including the pandemic, crime, and high taxes. Only three Manhattan neighborhoods remain on Zillow’s list of the 100 most expensive ZIP codes in the country, down from twelve in 2019. These neighborhoods have seen their prestige decrease, with average home values plummeting.
The pandemic-induced exodus and high taxes in New York City are contributing to the plummeting home values in some of the ritziest ZIP codes. The high combined state and local income tax rate in the city is deterring people from choosing New York City as their primary residence. This has led to a decline in home values as potential buyers consider the tax implications of living in the city.
Surging crime and homelessness in neighborhoods such as Soho, Tribeca, and Greenwich Village are also contributing to the declining desire to live in these areas, according to real estate experts. The shortage of housing and high-interest rates are further discouraging people from moving to New York City, leading to fewer transactions in the real estate market. Despite these challenges, some real estate agents remain optimistic about the potential for a rebound in the market.
Luxury realtors in New York City are hopeful that high-end properties, such as a six-bedroom condo in Soho listed for $35 million, will defy the negative trends in the market and attract buyers. However, the overall trend in the luxury real estate market in the city is one of declining home values and decreased interest in certain neighborhoods such as Tribeca, Soho, and Greenwich Village. Real estate agents are encouraging buyers to see this as an opportunity to invest in the market.
In addition to the three Manhattan ZIP codes, eight Long Island locales made the list of the 100 most expensive ZIP codes in the country. Areas like Sagaponack, Water Mill, Bridgehampton, and Amagansett are among the top 10 most expensive ZIP codes. These areas offer luxury properties with high price tags, attracting wealthy buyers looking for exclusive residential opportunities. The luxury real estate market in Long Island is seeing increased interest and investment, offsetting some of the declines seen in New York City.
Despite the challenges facing the real estate market in New York City, some areas, such as Long Island, are experiencing growth in luxury home values. ZIP code 94027 in Atherton, CA, home to prominent figures like Microsoft co-founder Paul Allen and Fleetwood Mac’s Lindsey Buckingham, has been the most expensive ZIP code every year since 2019. The typical home value in Atherton has increased significantly over the past few years, indicating a strong demand for luxury real estate in the area.
