Judging from all the $100 million-plus penthouses on 57th Street, New York City may seem like the hottest real estate market in the country. But in fact, its overall price growth is lagging well behind the national average.
In the year through February, home prices grew by 5 percent in metro areas listed in the S&P/Case-Shiller 20-city composite home price index. Over the same period, prices in New York City grew by a mere 2.51 percent, according to the latest S&P/Case-Shiller index, released today (the index does not include co-ops, which still outnumber condos in New York City).
Denver and San Francisco recorded the highest growth rates, with year-over-year price increases of 10 percent and 9.8 percent, respectively. San Francisco in particular has emerged as the least affordable housing market in the United States, amid a booming tech industry and restrictive zoning.
While the latest data show strong growth nationwide, they also highlight a divide between urban and rural markets. Price growth in 20 metro areas alone accelerated in February to 5 percent from 4.5 percent in January, but overall price growth slowed slightly to 4.2 percent due to weaker growth outside the major cities.
Major metropolitan real estate markets have seen a disproportionate influx of foreign and institutional capital in recent years and have generally recovered more quickly from the 2008 crash. Since 2012, the S&P/Case-Shiller 20-city composite home price index has grown by 29.5 percent.