Downtowns from coast to coast are still recovering from unprecedented change as a result of the COVID pandemic, and home prices have varied since then as a result.
Now, data provided by PropertyShark indicates that the downtowns of the Northeast’s most populous cities remain notably more expensive than areas outside the center, compared to other regions.
Data was analyzed over around 10 years of price growth between 2014 and 2023 across the 40 most populous cities in the country, and various other factors were taken into account, such as smaller downtown condos versus small-town suburban homes, as well as work-from-home conditions and the ability to be outdoors safely—all affecting price balance of homes.
Cities studied in this report included Boston, Brooklyn, Philadelphia and New York City—which was split into two boroughs for data, Manhattan and Brooklyn.
Downtown Philadelphia had the widest price gap in comparison to the rest of the city, with downtown homes listed as four times (+$629,0000) as expensive, while Boston’s median sales price spiked, leading to the downtown’s pricing edge dropping from $569,000 to $488,000 over the past 10 years, according to the report.
Delving deeper, Brooklyn’s prices essentially doubled, as the report showed that listing prices are going from $158,000 more expensive in its downtown area than the rest of the borough—$518,000 higher. And just across the bridge, Manhattan and downtown Manhattan home prices rose at nearly equal rates, 25% and 22%, respectively.
In contrast to these East Coast cities, Kansas City, Missouri, witnessed the widest gap of the 31 locations where median sales price of the city grew at a greater rate than its downtown. Between 2014 and 2023, the median sales price in downtown Kansas City rose 39%, while the median sales price throughout the rest of the city drastically spiked at 122%—more than doubling.
“Like in many other large cities, the balance shift between downtown prices and city prices started in 2020—the first year when home prices across Kansas City surpassed downtown price tags—and the gap has widened ever since. Beyond the generalized increase in home prices experienced by all large urban areas, Kansas City’s performance was influenced by the city’s growing population and robust employment growth,” the PropertyShark report explained.
Los Angeles buyers, way back in 2014, could expect to pay a median $570,000 for a home downtown, and 7% less for a home elsewhere citywide. Fast forward to 2023, the median downtown price rose 10%, and the rest of Los Angeles increased 84%.
Now, downtown Los Angeles homes sell for $353,000 less than city properties, influenced by previously limited inventories across the city, similarly to Dallas.
“That said, (downtown Los Angeles) experienced a condo boom in the early aughts with new builds commanding higher prices at the time. When the housing bubble burst and the Great Recession hit, many units were left unsold, dampening price growth in the area,” the report said.
In terms of countrywide data, downtown prices notably trailed in 31 out of the 40 largest cities, and 17 downtowns in the U.S. have a lower median sales price than the rest of the city, increasing from only nine a decade prior.
To read the full report, click here.
