How to Value New York City Apartments For Sale

Before purchasing a high-end property in NYC, it’s important to determine the value so that you can ensure that it’s a sound investment. However, to do that, you’ll need to understand how apartments in New York City are appraised. To look into the value of New York City apartments for sale, there are several different factors you’ll need to consider. Some are pretty universal truths for property buyers, while others are more specific to the market in New York City. Here’s a guide for buyers looking to determine the value of luxury property in the always-changing New York City real estate market.

Neighborhood

You already know that the location of any real estate is paramount when it comes to determining the value of any given property. But this factor is especially important when considering New York City apartments for sale. In New York, every neighborhood has a distinct identity, and therefore a different impact on the value of apartments. For example, you’d probably pay more than double the price per square foot in neighborhoods like Greenwich Village and SoHo as you would in Harlem.

Overall, the median price for a Manhattan apartment is nearly $1 million. According to the latest report from The Wall Street Journal, the value of apartment buildings in Brooklyn rose by 18.2% and the total value of real estate rose 16%. Hamilton, Morningside Heights, Chelsea and Fort George have experienced the highest increase in real estate sales prices in recent years, making them popular places for affluent investors.

Proximity to Attractions 

In addition, you’ll need to consider the apartment’s proximity to important amenities that could drive the value up (or down). If you’re conveniently located near public transportation, restaurants, parks and other attractions, it could drive the value up. But if you’re in a location where it could be inconvenient to access those things, it could have a negative impact on the property’s value. Each neighborhood in the city has its own set of amenities and attractions that could appeal to potential buyers. So it could be worthwhile to research some of the most popular streets, businesses and other places in the neighborhoods that you’re considering. Then you can gauge the location based on how close each apartment is to those attractions.

Square Footage

The square footage of a property can clearly have a large impact on the property’s value. Even though there are plenty of people willing to pay top dollar even for apartments that would seem small in other markets, a larger space could bring you even more value. The price per square foot of New York City apartments for sale can range from about $1,100 to almost $3,000. Of course, that depends on the location and other factors on this list. But clearly, more total square footage can lead to a higher value overall. In addition, outdoor space, whether it’s a small balcony or a rooftop terrace, can add to the value. In many cases, you can assess the outdoor space at about half the value per square foot of the interior space.

Number of Rooms

 In addition to the actual size of an apartment, the layout and number of rooms can have an impact on the value of real estate in NYC. For example, an apartment with a higher number of bedrooms, even if those bedrooms are on the small side, can appeal more to families, which could drive the value up, especially in family-oriented neighborhoods. This can have an even greater impact if you’re considering purchasing an investment property and renting it out, renters tend to pay premiums for additional bedrooms. In addition to the number of bedrooms, buyers could also look for things like open living space, bathrooms and the efficiency of the space. Some layouts can make a relatively small apartment at least feel large to potential buyers, while others can essentially waste space and lead to a decreased value. This shouldn’t have as great of an impact as the location or square footage, but in some cases it can impact the value.

Age of Building

The actual apartment building can also have a major impact on the value of New York City apartments for sale. The building’s age and general upkeep are two of the major factors that can impact the value of apartments in a particular building. For instance, brand new buildings with state-of-the-art features can demand a premium. But older buildings that might be in need of some maintenance could drive apartment values down. There is a caveat though. If a building is old enough to be considered pre-war (built before WWII) but still has enough modern features and amenities to appeal to today’s buyers, that could make the value of an apartment even higher. Particularly if a building is well known or prestigious, apartments could demand premium prices.

Building Amenities

The amenities that the building offers can also have a major impact on the value of apartments. For instance, is there a doorman in the lobby of the building? What kind of utilities are included? What about parking? Is there a gym or a pool or any other special features that could attract more buyers or renters?People will pay for convenient and upscale features like these, whether they’re buying or renting. So if a building offers them, it could drive the value of each apartment way up.

Type of Property

 In New York City, there are two main types of real estate investments that you can make, co-op and condo. A co-op means that you are essentially buying shares of a corporation. And in turn, you receive a proprietary lease in the building. In a condo, you own the actual physical unit that you reside in. Co-ops can be difficult to break into financially, as they can require more of an upfront investment or proof of financial stability. You’ll also need to get approval from a co-op board in order to be considered. There are less hoops and restrictions when it comes to buying a condo property. But regardless, it’s important that you understand which type of investment you can and want to make, as it can also impact the value of your property or investment.

Quality of Materials

Inside the building and the apartment itself, you’ll also want to take a look at the quality of the building materials used. Buyers clearly will pay more for an apartment with real hardwood floors and granite countertops than they will for one that’s covered in linoleum and a bunch of cheap, synthetic materials. Take a look at the building materials used throughout the apartment. But also pay attention to what is used in the common areas of the building it resides in, if there are any. Because cheap materials in any part of the space can really decrease the value of a luxury apartment in NYC.

Extra Features

There are also some features that could go above and beyond to make an apartment even more valuable. For example, things like fireplaces and security systems aren’t essential for all buyers or renters in NYC. But they provide that little something extra to make an apartment seem special. Particularly for high-end or luxury buyers, these extra features can make an apartment stand out from all the others available on the market. And thus, they can have a small but positive impact on the value of a property. However, the impact that these little extra features can have on apartment values also depends on the neighborhood and other apartment features. If you’re looking at properties in less expensive neighborhoods, extra features like fireplaces aren’t going to impact the value very much, if at all. But if you’re in a more expensive or prestigious area, high-end features are more likely to be in-demand. So they can have more of an impact on the value of a property.

Views

This is another location based factor. If the apartment you’re considering is in a place that offers views of the skyline, water or even any parks or green spaces, it could drive the value up. Buyers and renters alike will pay a premium for certain views, even up to 80% in some situations. So this might be another thing to consider when you’re looking into different locations. In addition, the higher up your apartment is, the more value it is likely to hold. Apartments on the second floor of a building are much less likely to have great views. But top floor apartments often have access to the best outdoor scenes. They also tend to hold the most prestige, which can have an impact on the value of NYC apartments.

Recent Improvements

Having quality finishes in an apartment is a great way to keep the value up. But you should also take into account how recently those finishes and other upgrades were added. A builder might have used quality materials when finishing the apartment initially. But if that was 50 years ago and it hasn’t been updated since, they might not look or feel very high-end anymore. And that could drive the prices down. You don’t necessarily want to have everything brand new, particularly if the apartment is in a historic building or if a few older finishes bring some character into the space. But you will likely want to consider when some of the main features or finishes were added. Particularly things like air conditioning units or security systems, if old or outdated, could have a slight negative impact on the value of an apartment.

Market Value

New York City’s Department of Finance has certain legal requirements for determining the market value of each property. While these don’t take all of the factors that could impact buyer opinions into account, the market value can have a major impact on the actual value of a property in NYC. There are different classes of buildings and properties that go into making this determination. The Department of Finance outlines those classes here.

Market Trends 

The real estate market in New York City is never stagnant. The city and each neighborhood within it is constantly changing. And that means that there are trends that could impact the market and the value of each apartment within it. You need to be prepared for prices to fluctuate, as the median price for an apartment in the city has increased by about $250,000 from 2004-2013, according to data from Douglas Elliman Real Estate. When considering the value of New York City apartments for sale, it’s probably worthwhile to look into some of the current trends that are impacting the market. For instance, are there any up-and-coming neighborhoods that could provide good investment opportunities? Or are there styles of apartments that are becoming less desirable, and thus less valuable?

Rental Income

If you’re buying real estate in NYC as an investment, you have a couple of different options for getting the best ROI possible. You could fix up the apartment to make your money back in an eventual sale. Or you could rent the apartment out in the interim.

If you decide to go the latter route, then you’ll need to understand what’s most popular among renters before considering the value of your potential property. For example, renters tend to be more concerned with the number of rooms in an apartment, wheras buyers are often more concerned with the actual square footage.

You’ll also need to research what rent costs are in your target neighborhood. On average, Manhattan apartments cost about $4,000 per month to rent. But that price can go up if you’re in a popular or growing neighborhood like SoHo. And it can also go up depending on the building amenities and other features of the space. You should also look into the policies surrounding rentals in any potential building. Some may have policies against renting out apartments, so it’s important to find that out before making an investment.

Potential Profits

However, if you’re looking for an apartment that you can sell at a profit later, you’ll want to consider some other factors. You’ll likely want to look at the trends in the neighborhood. For example, are apartment and rent prices increasing? That could signal that your property investment is likely to gain value before you go to sell it. In addition, you might consider looking for a space that has some room for improvement. Maybe you’ve found an apartment that needs some of its finishes upgraded. Or maybe you could add some extra features like air conditioning or a security system. You’ll still want to consider the neighborhood most carefully, because in some areas people aren’t as willing to pay for extra amenities. But if you can add some simple upgrades while you own the property, it might lead to a higher ROI when you go to sell. And that could make the property more valuable to you right now.

More Resources

 The values of New York City apartments for sale are constantly changing. The guide above provides a good starting point for determining the value of various properties within the city. But you’ll need to keep up with the ever-changing trends if you want to really gain more knowledge on the subject and make your apartment search a successful one.

Here are some blogs and resources that you can use to gain more knowledge and keep up with the New York real estate trends.

• AddressReport – this online resource provides a platform for learning more about various properties. You can type in the address and access information like property values and neighborhood quality.
• Curbed NY – this blog includes information, trends and projections all related to real estate and rentals in New York City. You can find statistics about values in different neighborhoods, tips for buyers and much more.
• Brick Underground – this is another blog dedicated to real estate and life in New York City. Here, you can find feature stories, statistics and advice all related to the New York City real estate market.
• New York Times Real Estate – the Real Estate section of the New York Times includes listings, tips and other resources about buying property in New York and beyond. You can peruse the listings to get an idea of what various properties are selling for. And you can also use it the section to keep up with the changing trends in the market.
• StreatEasy Blog – another blog focused on New York City real estate, this site features information about everything from renting to finances and even things to do in NYC.
• Trulia Heat Maps – Trulia’s real estate listings service offers one feature that New York City buyers might find to be especially useful when it comes to assessing the value of different properties. The site’s heat maps feature shows maps that outline the listing prices, sale prices and valuations of properties in different areas. So you can check it out to see which areas are producing the highest apartment values in NYC.
• An expert realtor – and of course, an actual in-person expert can be absolutely paramount to finding the best values when it comes to New York City apartments for sale. Real estate agents study the market every day and can help call your attention to various issues you may not have considered that can impact the value of various properties and help you make the best investment possible.