Our work focuses on analyzing cities at the neighborhood level. But when we combine these individual neighborhood analyses, they give us a more complete and detailed picture of a city's housing market. And when we combine those analyses, it gives us a chance to see how different cities compare.
Metrics matter: Average prices, and price ranges
Before we look into cities as a whole, let's take a moment to explain how our analyses are structured.
When we analyze neighborhoods, we often explain why we use the metrics that we do. Price per square foot allows us to meaningfully compare properties in different neighborhoods – even if they are different sizes.
However, price per square foot, by itself, doesn't tell the whole story. As a result, we also show the price range for each neighborhood. For example, two neighborhoods may have the same average price. Let's assume $500 per square foot. However, one may have a tight price range of $400-600, while another may range widely, from $100-$1,000.
The price range offers insights into each neighborhood that might not be visible otherwise. A neighborhood with a broad price range may be healthy and economically diverse, with a heterogeneous mix of properties. Or it could suggest that an under-the-radar neighborhood is transitioning, and the sudden spike on the upper end of the price range might reflect price records from restorations of historic houses and new condo development.
For the first time, we're applying this same thinking to the price range for entire cities, to see how they compare. Too often, when we study a city, we only work within its boundaries. But it's worth looking at cities in context of each other, to see what insights this suggests.
Everyone feels that their city is expensive, and that certain neighborhoods are out of reach - but how do the average prices and the most expensive properties in those cities compare, nationally?
Glad you asked.
The infographic below shows how New York City is anything but a monolithic real estate market. The height of each neighborhood boundary reflects the average price for that neighborhood. What looks like the skyscrapers of midtown is actually the sky-high prices of midtown.
While the attention is often on the glamorous neighborhoods and new developments breaking price records, there are many neighborhoods in Brooklyn, Queens, Bronx, and Staten Island where properties can be found for under $150 per square foot.
Comparing housing prices across cities
When we compared prices across some of the cities that we cover, it was interesting to visually see how different the price ranges looked:
Who knew housing in Austin and Philly is almost the same price? The average prices and price range were almost identical in two cities that aren't usually mentioned in the same sentence: Philadelphia ($301/sq.ft., ranging from $71-1,680), and Austin ($345/sq.ft., ranging from $109-$1,640). (As an aside, Philly has a population density of over 11,000 people/sq.mi, while Austin is just over 2,600/sq.mi.)
On a per-square-foot basis, the most expensive property in New Orleans is more affordable than the average one in San Francisco. New Orleans was the most affordable of the cities that we cover, with an average price of $259/sq.ft. and prices ranging up to $999/sq.ft. for the most expensive property in the French Quarter.
Pricewise – and despite all the talk of unaffordability – Los Angeles is firmly in the middle of the cities we cover. The average price of $417/sq.ft. is only 20% higher than that of Austin. The most expensive property in downtown Los Angeles, a condo at the Ritz-Carlton, asks $1,894/sq.ft. – slightly higher than the upper end of Austin. However, prices for the hillside estates can go up to $4,321/sq.ft., although this can be skewed higher by land values.
The average price in Boston ($751/sq.ft.) is almost twice that of Los Angeles. At the lower end of the market in both cities, the pricing is almost identical. But the upper end of LA's market ($4,321/sq.ft.) far exceeds that of Boston's ($2,996/sq.ft.). That said, the upper end of Boston's condos are priced higher than those in Los Angeles.
The average price in San Francisco is $1,185/sq.ft., more than 57% higher than that of Boston. This is interesting for a few reasons.
While Boston and San Francisco's streetscapes appear similar, the population density in San Francisco is almost 42% higher than in Boston: 17,000 versus just under 12,800 people per square mile.
What is also notable is that the lower end of San Francisco's market – the lowest priced property on a per-square-foot basis – is $359/sq.ft., which is almost triple that of the comparable property in Boston ($143), Los Angeles ($136), or Austin ($109).
To put it another way, the lowest-priced property in San Francisco is more expensive than the average property in New Orleans ($259/sq.ft.), Philadelphia ($301/sq.ft.), or Austin ($345/sq.ft.). This highlights how San Francisco is becoming economically much more homogeneous. Now, the lowest prices per square foot are not always also the lowest asking prices (sometimes an affordable price/sq.ft. is only for a large building, so it ends up being millions to purchase), but this highlights the difficulty for first-time buyers trying to get a foothold in the city.
Astute readers will note that at the top of the chart is not a city, but a single borough. We analyzed Manhattan rather than New York City as a whole because it gives a clearer picture of pricing that the city overall, large swathes of which aren't yet considered by potential buyers.
According to Miller Samuel data, the average price for Manhattan is $1,773 per square foot, which is 49.6% higher than that of San Francisco. At the time of the study, the most affordable market-rate property on Manhattan is asking $437/sq.ft., 21.7% higher than the lower end in San Francisco, and 206% higher than Boston.
But the upper end is where Manhattan highlights what sets it apart from almost any other real estate market in the United States. Again using Miller Samuel data, the most expensive property on a per-square-foot basis asks $8,511 per square foot. And listings have recently gone as high as $10,000/sq.ft. in other units at 15 Central Park West.
For market commentary or for data regarding a story, please contact us at (917) 447-8800.
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