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What’s Manhattan Worth? A Land Values Index from 1950 to 2013

Author

Listed:
  • Jason Barr

    ()

  • Fred Smith

    ()

  • Sayali Kulkarni

    ()

Abstract

Using vacant land sales, we construct a land value index for Manhattan from 1950 to 2013. We find three major cycles (1950 to 1977, 1977 to 1993, and 1993 to 2007), with land values reaching their nadir in 1977, two years after the city’s fiscal crises. Overall, we find the average annual real growth rate to be 5.1%. Since 1993, land prices have risen quite dramatically, and much faster than population or employment growth, at an average annual rate of 15.8%, suggesting that barriers to entry in real estate development are causing prices to rise faster than other measures of local well-being. Further, we estimate the entire amount of developable land on Manhattan to be worth approximately $825 billion. This would suggest an average annual return of 6.3% since the island was first inhabited by Dutch settlers in 1626.

Suggested Citation

  • Jason Barr & Fred Smith & Sayali Kulkarni, 2015. "What’s Manhattan Worth? A Land Values Index from 1950 to 2013," Working Papers Rutgers University, Newark 2015-002, Department of Economics, Rutgers University, Newark.
  • Handle: RePEc:run:wpaper:2015-002
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    File URL: http://www.ncas.rutgers.edu/barrsmithkulkarniwhatsmanhattanworth
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. “Empire State of Mind”: The Land Value of Manhattan, 1950-2013
      by Manuel Bautista in NEP-HIS blog on 2015-06-10 13:32:41
    2. Manhattan Profits (Part II): Return on Investment for a Superslim Skyscraper
      by Jason Barr in Building the skyline on 2017-11-27 02:19:24

    More about this item

    Keywords

    Land Values; Manhattan; Price Index;

    JEL classification:

    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • N9 - Economic History - - Regional and Urban History

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