Growth in Property Market Value Slows

After years of rapid growth, the market value of properties in the city is now rising much more slowly, having increased by an estimated 1.44% last year, city officials said yesterday. The total market value of property in the city is $807.4 billion, up from $796 billion last June.

In 2006, the market value of properties grew by 18.1%, with double-digit growth in all five boroughs.

Last year, the estimated market value of properties rose 5.16% in Manhattan and 6.02% in the Bronx. The estimated market value of properties declined by 0.58% in Brooklyn, by 0.7% in Queens, and by 3.29% in Staten Island. The value of one-, two-, and three-family homes dropped by 2.76%.

The estimates are from the city's Department of Finance, which released its annual tentative property assessment roll yesterday. Used to calculate property tax bills, the roll provides a snapshot of estimated real estate values in the city.

The value of properties in New York "still seem to be holding very strong, but there is a slight decline, with people lowering asking prices as well as things staying on the market a little longer," the city's finance commissioner, Martha Stark, said.

If the property tax rate stays steady, property taxes citywide are projected to rise by varying amounts in almost all cases, depending on the type of property owned. The average tax bill for the owner of a Manhattan condominium could expect to see the property tax bill grow by $548.58, to $8,331.07 from $7,782.49.

The city is facing a projected $3.1 billion budget gap and to balance the budget Mayor Bloomberg may consider raising property taxes and cutting a $400 property tax rebate for homeowners. He lowered property taxes by 7% last year, but presented it as a one-time reprieve the city would continue only if it could be afforded. Jonathan Miller, the director of research at a real estate and data analytics firm, Radar Logic, said the downshift in growth and property values has broad implications for city tax revenues.

"Real estate has been one of the key reasons why the city has been running a surplus," he said. He added that the roll reflects "the transition most major markets across the country are going through, from a period of rapid escalation in property values to modest growth to declining values."

A jump in the estimated market value for hotels in the city helped buoy the overall estimated property values. Hotels saw their estimated values grow by more than 20%, while the estimated market value for cultural and recreation buildings jumped by nearly 70%. The St. Regis Hotel, for example, is worth $236.9 million, up from $165.2 million last year. Le Parker Meridien Hotel rose in value to $248.5 million from $184.2 million.

Ms. Stark attributed the rise in hotel values to record tourism levels in the city, strong occupancy rates, and high room rates.

The most valuable building among notable properties singled out in the tentative assessment roll is the Time Warner Center, which is listed at $1.1 billion, up from $1.05 billion last year. Mr. Bloomberg's Upper East Side townhouse is valued at about $14.9 million, up from $13.5 million last year.

The president of the Real Estate Board of New York, Steven Spinola, said the real estate market in New York is one of the best in the country. "We are still doing well, although we are not continuing to go up in the way we were going up 18 months ago," he said.