When Covid-19 hit in 2020, the suburbs and rural parts of New York were seen as good places to buy.
Mihal Gartenberg, a registered associate real estate broker with Coldwell Banker, says, “That really changed, and they turned into seller’s markets in the spring of 2020.” “In New York City, you could feel the change in the air by spring and summer 2021. We had a full-on seller’s market by fall.
We’re now in 2023, and people still want to buy houses. But sales are low because of a number of things. Low inventory across the state makes it more difficult for buyers to find homes, which drives up prices. Rising mortgage rates keep people who want to buy from taking the plunge.
New York State’s Real Estate Market Right Now
The world’s financial capital is in New York, but the state also has beaches, mountains, farms, and a lot more.
Jeffrey Decatur, an associate broker with RE/MAX Capital, says, “All of these add to the diversity of the housing market.”
Manhattan has the most expensive housing market in the U.S., and there’s a lot of interest in high-end homes there. On the other hand, people from all over the world buy homes in the tech hubs around Rochester, Syracuse, and Buffalo. People like to buy vacation homes and business properties in places that are good for families and depend on tourism.
Even though some people are still moving to New York, more people have been leaving since the plague started. The state’s population dropped the most between 2020 and 2023, when 2.6% of its people moved away, according to the Moving Migration Report from North American Moving Services.
These changes in population may be one reason why the state’s real estate market is changing.
Stats and Trends in New York Homes
Listings and sales of homes in New York state are down compared to last year. This could be because the market was so strong in 2021 and 2022. Also, there aren’t many homes for sale because people are waiting to sell until the market changes.
In New York, the number of homes listed and sold is going down.
The New York State Association of Realtors (NYSAR) says that compared to the same time last year, the number of new home listings fell 22.4% in the second quarter of 2023. The group also said that finished sales were 22.6% less than the previous year.
The amount of homes for sale dropped even more in some parts of New York. The NYSAR study says that compared to June 2022, the number of listings in Orleans and Putnam counties fell by 37.3% and 34.5%, respectively. During the same time period, closed deals went down in both areas.
One more entry was seen in Allegany and Essex, but not in any of the other 62 counties in the state. Only in Essex, Hamilton, Livingston, and Yates counties did closed sales go up.
New York home prices and inventory are going down.
Statewide, the median sales price was $405,000 in the second quarter of 2023. This is 1.8% less than the same time last year. The national median home price is $416,100, so that’s 2.7% less than that.
Prices aren’t going down everywhere in New York, though. In many places, especially those with low-cost homes, the lack of homes for sale is making it more competitive among buyers, which is driving up prices. During the second quarter of 2023, home prices went up in almost half of New York’s counties.
Re/Max Redfin says that as of Q2 2018, the following New York metro areas had the fastest-growing sales prices in the state:
- Livingston Manor. 60.8%
- Aurora. 59.9%
- De Witt. 51.9%
- Saratoga Springs. 47.1%
- Malta. 38.7%
Even though prices are going up, some homeowners are putting off the choice to sell. They bought homes or refinanced with super-low interest rates in the last few years. Now, they’re waiting for the market to get better before putting their homes on the market, which makes the already limited number of homes even smaller. A study from NYSAR found that New York had 3.2 months of housing supply in July 2023. This was 25.3% less than the previous year.
Because there aren’t many existing homes for sale, more people are also buying brand-new houses. In the past few months, construction and sales of new homes have gone through the roof. This has given builders more trust than they’ve had in a year.
Predictions for the New York housing market
Most people in New York are having trouble affording to buy a home because mortgage rates are high, home prices are high, and there aren’t many homes for sale.
The 2024 election is another reason why the home market may stay flat in the coming year, along with higher interest rates on loans.
BTIG, a global financial services company, says that presidential election cycles can hurt housing in the short run.
People who want to buy a home usually move more slowly because they don’t know what will happen with the economy and policies in the near future. Gartenberg says, “When people buy a lot of debt, they don’t like a lot of uncertainty.”
The possible slowdown might not last long, though. In New York, home prices have slowly gone up over the last 18 years. In 2005, the median price of a home was about $280,000, and it will be $405,000 in 2023, a 44% rise. NYSAR thinks that home prices will rise by 4% over the next year.
Is it better to buy or sell a home in New York?
“The market is still very active and healthy,” Decatur says, even though sales of homes in the whole state are down.
We understand why you might want to stay put. If you can’t afford a bigger monthly mortgage payment, you might decide not to buy or sell. You might not be able to find the right kind of home, or you might be happy where you live now. Also, it’s not a good idea if you want to time the market to make money.
However, buying may be wise if:
- Moving to a new area
- New home payment is affordable.
Selling your home may be wise if:
- Your house selling revenues let you put a significant down payment or lower your next home’s rate.
- Although you have less equity, you can afford a higher interest rate and home price.
- Relocation is necessary due to limited inventory in your community.
“The last thing you want to do is think yourself into doing nothing,” Decatur adds. “The water is fine for buying and selling. Jump in.”