Key Takeaways:

  • Over the past 11 years, home price growth has been noticeably slower in flood zones than in low-risk areas across NYC, rising 33% and 53%, respectively
  • Residential sales in the flood zones of Brooklyn, Manhattan and Queens were similarly slower paced, with transactions rising in Staten Island alone
  • Brooklyn led in terms of price gaps, with homes outside flood zones selling at a $190,000 median premium in 2023
  • Manhattan claimed two of the three neighborhoods where flood zone medians contracted since 2012
  • Six of the seven neighborhoods that logged triple-digit surges in flood zone medians were significantly affected by Hurricane Sandy

The recent record rainfall in New York City that, yet again, flooded subway stations, apartments, storefronts and entire streets was just another instance in an increasingly frequent line of similar weather events affecting the city. Granted, current effective FEMA flood zone maps already show large swaths of NYC neighborhoods at medium and high risk of flooding. But, as residents outside of these designated areas can increasingly confirm, the risk of floods has spilled over beyond these boundaries — and preliminary views of FEMA’s new flood zone maps back up their experiences.

However, before we speculate on the impact that future flood zone maps will have on the real estate market, we investigated the effects of the flooding events of the last 10+ years by analyzing residential sales data between January and September 2012 — before Sandy hit — and January and September 2023. Specifically, we focused on the differences in pricing and the number of sales between areas that fall within and areas that fall outside current FEMA-designated flood zones, in the 65 neighborhoods that met our minimum sale threshold.

Sales Tick Down in Flood Zones in 3 of 5 Boroughs

When looking at citywide residential sales data, we immediately noticed a decrease in the number of sales in flood zones compared to areas not designated as at risk. More precisely, across NYC, sales in flood zones represented 11% of all recorded residential deals in 2012, whereas in 2023, they accounted for only 9%.

That said, not all of NYC is affected equally: For example, flood zone sales ticked down in three of the city’s five boroughs, with Staten Island and the Bronx bucking that trend. Specifically, sales in Bronx flood zones remained fairly constant, representing 12% of the borough’s sale total both in 2012 and 2023. And in Staten Island, flood zone sales went from accounting for 10% of the borough’s total in 2012, to supplying 11% of all residential sales.

Meanwhile in Manhattan, flood zone sales ticked down from 10% of all sales to 8%. In Queens, flood zone home sales went from accounting for 9% of all residential deals in 2012 to 7% in 2023.

Brooklyn, however, saw the most significant changes: Transactions in areas at risk of flooding accounted for 17% of Brooklyn’s home sales in 2012, but by 2023, that share dropped to 11%. And, with preliminary views of FEMA’s updated flood zone maps showing Brooklyn as the borough with some of the largest increases in at-risk areas, there could be an even more drastic change in the near future.

View the expected increase in Brooklyn’s flood zones according to preliminary FEMA projections:

Map of Brooklyn FEMA Flood Zones

Brooklyn’s Flood Zones Log 16% Price Increase in 11 Years, Prices Outside At-Risk Areas Surge 74%

Notably, it’s not just the number of sales that shows changing market dynamics in areas at risk of flooding: Price growth has also slowed in these areas compared to those outside of flood zones. Price changes were most dramatic in Brooklyn and Manhattan, with the latter marking a 25% price gain in floodable areas and a 40% increase outside of flood zones.

Brooklyn, however, showed the starkest differences in terms of pricing: While the median for homes sold outside of flood zones jumped 74%, the median sale price for homes located within at-risk areas gained just 16% — by far the smallest increase in the city. Queens too, saw slower price growth between 2012 and 2023 in flood prone areas (49%) compared to price gains recorded in areas designated as low risk (72%).

Queens and Brooklyn showed an additional sign of the influence flood zones have had so far on pricing and buyer preferences: While in 2012, medians in flood zones were higher than in low-risk areas, by 2023, price trends had reversed, resulting in lower median sale prices in at-risk areas. For example, flood-prone zones in Brooklyn had a $64,000 higher median in 2012 than properties in areas with low or no risk. For comparison, by this year, homes in Brooklyn’s flood-prone areas were selling at a $190,000 lower median than those outside flood zones.

While sales in Staten Island’s flood-prone areas increased at a faster pace than those in low-risk zones, in terms of pricing, the fifth borough also saw price growth in no-flood zones outpace price gains in flood zones. Here, the median sale price for homes in flood-prone areas grew 59% in the last 11 years, whereas the median for sales outside of flood zones jumped 71%.

And while the Bronx slightly different trends by logging a marginally sharper price appreciation in flood-prone areas (43%) compared to places not at risk (41%), city-wide numbers still reflected the wider trend of slower price gains in areas at risk of flooding. Specifically, flood-prone sections of the city experienced a 33% increase in the median sale price of homes, while the rest of NYC saw prices climb 53%.

Price Growth Slower in Flood-Prone Areas in 38 of 65 Neighborhoods with At-Risk Zones

When zooming in to the neighborhood level, we found that of the 65 neighborhoods with at-risk areas, 38  logged sharper price increases in areas outside of flood zones, while 20 experienced sharper price gains in flood zones.

Furthermore, among neighborhoods where prices in flood zones grew at a slower pace than in areas with no risk, three neighborhoods actually saw prices contract within floodable areas: in Manhattan’s Clinton-Hell’s Kitchen area, a 25% drop lowered the median of flood zones to $878,000 in 2023, while the rest of the neighborhood ticked up 18% to $930,000.  

In the same way, the fellow Manhattan neighborhood of Sutton Place logged a 6% price contraction in floodable areas, while the median of the rest of the neighborhood appreciated 12%. Likewise, Staten Island’s Arden Heights logged a 5% price decrease in flood zone prices, dropping $22,000 between 2012 and 2023.

Far Rockaway, Red Hook & Greenpoint Among Neighborhoods Where Flood Zone Price Gains Outpace Low-Risk Areas

In neighborhoods where at-risk areas underwent sharper price increases in the last 11 years, seven saw triple-digit gains. In particular, Brooklyn’s Red Hook showed a stark difference in price gains: While the median of low-risk areas surged 169% to hit $1.45 million this year, prices in Red Hook’s flood zones shot up a whopping 279% to rest at $2,488,000.

Red Hook was joined by the fellow Brooklyn neighborhoods of Greenpoint and Gowanus. In Greenpoint, the median sale price of flood zone sales jumped 188%, yet in low-risk areas, the median rose 81%. In Gowanus, floodable areas surged 172% compared to 169% in no-flood zones.

Meanwhile, home prices in Manhattan’s Hudson Square and Roosevelt Island also grew at a sharper rate in areas at medium and high risk of flooding. Specifically, flood zone medians in Hudson Square jumped 170% to $reach 3.16 million compared to the 123% increase in no risk areas.

At the same time, Roosevelt Island experienced a 145% jump in flood zone prices while the rest of the neighborhood gained only 38%. Although not among the five neighborhoods with the sharpest increases, Queens’ Far Rockaway and Arverne also made waves with gains of 113% and 109%, respectively.

It’s also worth mentioning that of both Gowanus and Greenpoint saw significant impact during the late-September flood event, while Red Hook, Far Rockaway, Hudson Square, Roosevelt Island, Gowanus and Greenpoint were all impacted by Hurricane Sandy, only Arverne spaced virtually unscathed.

View the expected increase in NYC’ flood zones according to preliminary FEMA projections:

Map of NYC FEMA Flood Zones

What Next?

With FEMA’s updated flood maps for NYC expected to be released in 2024, thousands of residents and owners are anticipating increased housing costs in the form of mandatory flood insurance and additional safety measures.

That said, preliminary maps of FEMA’s updated flood zones show significant increases in areas at medium and high risk of flooding across the five boroughs, but especially in Brooklyn. As such, it will be interesting to see how home prices and the number of sales will be affected, considering the changes observed throughout the last 11 years.

Explore the table below for flood zone price and sales trends in 65 NYC neighborhoods with at-risk areas:

Methodology

To calculate median sales prices and price changes, we took into account all residential sales between January and September of 2012 and 2023, including condo and co-op units as well as single-family home sales. All medians were rounded to the closest $1,000 and package deals were excluded.

Neighborhoods included in this study had to record a minimum of five sales in their respective flood zones in 2023.

We defined flood zones the areas designated by FEMA as code 0.2% PCT moderate risk, and code A and AE high risk. Areas defined as outside of flood zones are the areas designated by FEMA code X moderate to low risk. All designations were based on FEMA’s current effective flood zone map

Eliza Theiss

Eliza Theiss

Eliza Theiss is a senior writer reporting real estate trends in the US. Her work has been cited by CBS News, Curbed, The Los Angeles Times, and Forbes among others. With an academic background in journalism, Eliza has been covering real estate since 2012. Before joining PropertyShark, Eliza was an associate editor at Multi-Housing News and Commercial Property Executive. Eliza writes for both PropertyShark and CommercialEdge. Reach her at [email protected]