Here are the latest trends in the NYC real estate market as well as the statewide market. A prolonged scarcity of properties on the market across the Empire State, along with high prices and growing mortgage rates, continues to impede the New York housing market in 2022. In September 2022, closed sales fell 12.6 percent from 13,797 units in September 2021 to 12,057 homes last month, a drop of 12.6 percent, according to the New York State Association of REALTORS®
Pending sales declined 11.2 percent, from 12,686 last September to 11,269 in September 2022. New property listings also fell from 16,656 in September 2021 to 14,461 in September 2022. In year-over-year comparisons, this is a 13.2 percent reduction. The median sales price of homes in New York State jumped slightly in September, climbing 2.4 percent from $370,255 in September 2021 to $379,000 this month.
In September 2022, there will be only 39,370 available properties for sale. This marks a 14.4 percent decline from the 45,987 properties on the market in September 2021. A balanced market has a supply of six to six and a half months whereas New York has now 3.3 months. The housing affordability index decreased by 22% to 99 as compared to September of last year when it was 127. An index of 120 means the median household income is 120% of what is necessary to qualify for the median-priced home under prevailing interest rates. A higher number means greater affordability.
Source: NYSAR.com
NYC Real Estate Market: Are Home Prices Dropping?
The New York resale housing market (statewide data) slowed down in the third quarter of 2022 as increasing inflation and soaring mortgage interest rates finally caught up with most market players. Many buyers looking to purchase a home have lost eligibility for a mortgage or are unable to purchase a home in the present economic situation, resulting in a precipitous decline in buyer interest. The Housing Affordability Index in New York dropped by 25.6% QoQ to 93. A higher number means greater affordability. As borrowing costs continue to rise, many buyers and sellers are choosing to wait while the market resets before making their next move.
Pending Sales in New York State were down 9.8 percent to 37,292.
They are considered a forward-looking indicator of home sales based on contract signings
Closed Sales decreased 10.9 percent to 38,743.
Inventory shrunk 14.4 percent to 39,370 units.
Prices gazed upward as the Median Sales Price was up 5 percent to $400,000.
The average sales price was up 6.2 percent to $530,937.
Sellers received, on average, 102.5% percent of their original list price at sale, a year-over-year improvement of 0.5 percent.
Days on the Market decreased by 10.9 percent to 41 days.
Months Supply of Inventory was down 8.3 percent to 3.3 months.
NYC Real Estate Market Trends in September 2022
Let us now look at the most recent trends in the New York City real estate market. New York has also been one of the hardest hit by the COVID-19 pandemic, with the highest job losses among the country’s major metropolitan areas. It has been recovering from the economic effects of the pandemic. Inventory shortages and strong buyer demand continued to drive up home prices, with multiple offers on a limited number of homes being a common occurrence in the majority of market segments.
Data by Redfin shows that the median sales price of homes (all types) in New York was $800,000 last month, up 0.1% since last year.
In September 2022, New York home prices were up .0% compared to last year, selling for a median price of $800K.
On average, homes in New York sell after 54 days on the market compared to 58 days last year.
There were 3,185 homes sold in September this year, down from 3,815 last year.
The average sale price per square foot in New York is $617, down 4.8% since last year.
New York Migration & Relocation Trends
In Jul ’22 – Sep ’22, 27% of New York homebuyers searched to move out of New York, while 73% looked to stay within the metropolitan area.
Across the nation, 3% of homebuyers searched to move into New York from outside metros.
Philadelphia homebuyers searched to move into New York more than any other metro followed by Boston and Los Angeles.
73% of New York homebuyers searched to stay within the New York metropolitan area.
Miami was the most popular destination among New York homebuyers followed by Philadelphia and Los Angeles.
The current market dynamics point to a slowdown in New York City housing market as well. According to StreetEasy data, the cancellation rate – listings under contract that have returned to the market without closing, as a percentage of all in-contract listings – increased to 1.7% by September, the highest level since the pandemic began.
The rise in cancellation rates in early 2020, which reached 2.1% by June of that year, was an outlier when the NYC real estate market ground to a stop due to the COVID-19 epidemic. When mortgage rates were mainly below 3% (a historically low level) in 2021, the cancellation rate averaged under 1%. The median number of days listings spend on the market is low, and the fraction of listings providing price decreases are similar to seasonal behavior before the pandemic, suggesting NYC is still in a seller’s market.
Homebuyers shouldn’t expect a buyer’s market soon despite lowering prices. After a fierce spring shopping season as buyers raced to beat rising mortgage rates, properties stayed on the market longer, boosting inventory. Any significant mortgage rate decline will attract purchasers who have been sidelined. Due to low mortgage rates during and before the epidemic, homeowners had little motivation to sell, reducing new listings. Rising seller reluctance will restrict home price declines.
Realtor.com’s latest data shows that NYC was a buyer’s real estate market in September as it had a total sales to total listings ratio below 0.12 which tends to favor buyers. In other words, the supply of homes is greater than the demand for homes.
In September 2022, the median list price of homes in New York, NY was $828K, trending down 5.4% year-over-year.
The median listing price per square foot was $823.
The median sale price was $635,000.
The sale-to-List Price Ratio was 97.77% — homes sold for approximately the asking price on average.
A buyer would prefer a sale-to-list price ratio closer to 90%, whereas a seller would always prefer scenarios that yield a ratio of 100% or higher.
The median days on market (109 days) in New York City have decreased somewhat over the past month and decreased slightly over the last year.
Tribeca is the most expensive neighborhood, with a median listing price of $3.9M.
Riverdale has a median listing price of $360,000, making it the most affordable neighborhood in New York.
NYC Real Estate Market Forecast 2022 and 2023
Among metropolitan areas, the New York City metro remains the country’s largest real estate market by value, but by a narrowing margin. The NYC-area housing market is valued at $3.51 trillion, with the Los Angeles metro right behind at $3.27 trillion, according to a report published by Zillow.
What are the New York City real estate market predictions for 2022 & 2023? New York City has a track record of being one of the best long-term real estate investments in the U.S. The New York real estate market has been booming year over year. NYC home prices nearly doubled over the last decade. With supply and demand continuing to favor sellers, prices continue to rise year over year.
According to NeighborhoodScout’s data, the cumulative appreciation rate over the ten years has been 77.08%, which ranks in the top 40% nationwide. This equates to an annual average real estate appreciation rate of 5.88%. Despite the pandemic drastically affecting the New York real estate market, during the period between 2021 Q2 – 2022 Q2, New York’s appreciation rate has been 10.54%. In the latest quarter tracked by NeighborhoodScout’s data (2022 Q1 – 2022 Q2), they show that house appreciation rates in New York were at 0.91%, which equates to an annual appreciation rate of 3.71%.
Let us look at the price trends recorded by Zillow over the past few years. ZHVI is not the median price of homes that are sold in a month within a geographic region. It is calculated by taking all estimated home values for a given region and month (Also called Zestimates), taking a median of those values, and applying some adjustments to account for seasonality or errors in individual home estimates. It, therefore, represents the whole housing stock and not just the homes that list or sell in a given month.
By this calculation, the current typical home value of homes in NYC is $781,622. It indicates that 50 percent of all housing stock in the area is worth more than $781,622 and 50 percent is worth less (adjusting for seasonal fluctuations and only includes the middle price tier of homes). In Sept 2021, the typical value of homes in NYC was around $730,055. NYC home values have gone up 7.1% since last September.
Typical Home Value: $781,622 (September 30, 2022)
1-year Value Change: +7.1%
0.990 Median sale-to-list ratio (August 31, 2022)
27.6% Percent of sales over list price (August 31, 2022)
56.2% Percent of sales under list price (August 31, 2022)
Here’s Zillow’s housing market forecast for New York-Newark-Jersey City Metro. According to their forecast, the supply and demand dynamics will likely push prices south over the next 12 months.
New York-Newark-Jersey City Metro home values have risen by 9.66% to $619,306.
The New York Metro housing market forecast ending September 2033 is slightly negative.
Zillow predicts that New York Metro home values may decline by 1% by Sept 2023.
If this forecast is correct, New York Metro home prices will be lower in the 3rd Quarter of 2023 than they were in the 3rd Quarter of 2022.
Source: Zillow
Impact of Rising Mortgage Rates on The NYC Real Estate Market (New York City)
Let’s discuss some more interesting trends. The StreetEasy Market Reports are a monthly overview of the Manhattan, Brooklyn, and Queens sales and rental markets. It’s been two years of unpredictability in the New York City market. Their latest data shows that the rising mortgage rates are not only discouraging buyers but also causing more purchases to fall through.
The average 30-year mortgage rate has nearly doubled in the last nine months, reaching 6.7% by the first week of October. The last time it soared so quickly was in the spring of 1980. The cancellation rate—the percentage of in-contract listings that have returned to the market without closing—rose to 1.7%, the highest level since the pandemic began.
Mortgage rate fluctuations have hurt low-income buyers, especially first-time buyers. By September, 2.8% of purchases below $800K—the median closing price of NYC sales this year—were canceled. That’s double the 2021 rate for this sector and more than three times the cancellation rate for in-contract sales above $800K.
However, two data factors indicate that we are still in a seller’s market: the median number of days listings are on the market is low, and the share of listings suggesting price reductions is consistent with seasonal practice prior to the pandemic. Despite declining prices, homebuyers should not anticipate a buyer’s market in the near future.
Although NYC is still in a seller’s market purchasers are progressively regaining bargaining power. Listings in New York City lingered on the market for longer, with the median days on the market increasing to 80 days in September from 69 days in August, although they went under contract 10 days earlier than the average house around this time of year between 2017 and 2019.
As properties linger on the market for longer, more listings are lowering asking prices in 2022. In Q3 2022, nearly one in every four (24%) listings offered on StreetEasy reduced asking prices at least once, significantly more than one in every five (19%) in Q3 2021. This, however, is not cause for fear.
Buyer demand roared back in 2021, pushed by low borrowing rates, and greater price drops are common in September as sellers try to generate more interest in their summer listings that are still on the market. The present share of price reduction is consistent with pre-pandemic sales market norms. Bidding wars with many offers above the asking price will become less prevalent as the market rebalances.
NYC Home Prices Are Falling
According to the StreetEasy Price Index, NYC home prices are past their peak reached in July since the start of the pandemic. The index fell modestly by 0.7% month-over-month in September after staying essentially unchanged in August. The indices for Manhattan (-0.5%), Brooklyn (-1.1%), and Queens (-0.8%) also declined modestly in September from the previous month, while still being higher than one year ago.
The citywide median asking price rose slightly to $995K in September from $975K in August, just slightly below the mansion tax threshold of $1M, due to a large influx of higher-priced listings mostly in Manhattan after the Labor Day holiday. In September, the citywide median asking price for new listings was $999K, with 25% priced above $2M.
In September, Manhattan accounted for half of all new listings, with a median asking price of $1.475M – 48% higher than the citywide norm. As a result, Manhattan’s median asking price reached $1.5 million, the highest amount since the pandemic. The most expensive listing in September was on Billionaires’ Row, asking $250 million.
New York’s Recovery From The Pandemic
Changes in house prices, rents, and mortgage interest rates can affect households’ income and wealth, as well as how much money they spend and on what. Housing costs and policies can also shape where people chose to live, work, and study, as well as their ability to move or change jobs. Rising house prices, by discouraging potential migrants, could significantly reduce the growth potential of the economy, shifting the balance of labor market growth from employment to wages, with a consequent deterioration in competitiveness.
When it comes to the job market and real estate, the relationship is generally correlative: when one rises, so does the other, and when one falls, so does the other. According to preliminary figures released on October 20, 2022, by the New York State Department of Labor, New York State’s seasonally adjusted unemployment rate increased from 4.3% in July to 4.7% in August 2022. From September 2021 to September 2022, the unemployment rate (not seasonally adjusted) fell from 5.7% to 3.9%.
The number of private sector jobs in New York State increased over the month by 17,400, or 0.2%, to 8,061,500 in September 2022. The number of private sector jobs in the U.S. also increased by 0.2% in September 2022. New York State’s private sector jobs (not seasonally adjusted) increased by 361,400, or 4.7%, over the year in September 2022, which exceeded the 4.2% increase in the number of private sector jobs in the U.S.
On a net basis, the total number of nonfarm jobs in the state increased by 15,600 over the month, while private sector jobs rose by 17,400,
in September 2022. At the same time, the total number of nonfarm jobs in the nation increased by 263,000, while private sector jobs increased by 288,000.
New York City’s unemployment rate decreased over the month from 6.6% to 5.6%.
Outside of New York City, the unemployment rate increased from 3.2% to 3.3%.
The number of unemployed New Yorkers decreased over the month by 39,400, from 445,100 in August to 405,700 in September 2022.
Source: New York State Department of Labor
New York Rental Market Report
The Zumper New York City Metro Area Report analyzed active listings across 15 metro cities to show the most and least expensive cities and cities with the fastest growing rents. The New York one-bedroom median rent was $2,334 last month. New York City was the most expensive market with one-bedrooms priced at $3,950 whereas Newark was the most affordable city with rent at $1,350.
Here are the places where it makes sense to invest in rental properties in the New York City Metro Area. These are the places where the demand for rentals is growing strong in 2022.
The Fastest Growing Cities For Rents in New York City Metro Area (Y/Y%)
Jersey City had the fastest growing rent, up 49.7% since this time last year.
West New York saw rent climb 47.3%, making it rank as second.
New York City was third with rent jumping 33.9%.
The Fastest Growing Cities For Rents in New York City Metro Area (M/M%)
West New York had the largest monthly rental growth rate, up 6.1%.
Jersey City rent grew 6% last month, making it the second fastest growing.
Yonkers was third with rent climbing 4.9%.
Source: Zumper
Where to Buy a House in NYC?
New York is dominated by renter-occupied one or two-bedroom apartments. 76.75% of New York’s dwellings are rentals. As per Neigborhoodscout.com, a real estate data provider, one and two-bedroom large apartment complexes are the most common housing units in NYC. Other housing types prevalent in NYC include single-family detached homes, duplexes, rowhouses, and homes converted to apartments.
The New York housing market has affordable townhomes. New York’s single-family homes account for just 1.15% of the city’s housing units. During the latest twelve months, the New York real estate did cool off. However, the cumulative appreciation rate over the ten years has been 38.81%, which ranks in the top 30% nationwide. Evaluate the specifics of the NYC housing market at the time you intend to purchase. Hiring a local property management company can help in finding tenants for your investment property in NYC.
New York City’s housing market is one of the most costly and competitive in the country. There are 237 neighborhoods in New York (as per Realtor.com). Tribeca has a median listing price of $3.9M, making it the most expensive neighborhood. Riverdale is the most affordable neighborhood, with a median listing price of $360K.
There are some buyer-friendly neighborhoods in New York City where buyers have a bit more negotiating power in neighborhoods as compared to sellers. Jackson Heights is one of New York City’s most buyer-friendly neighborhoods at the moment with home prices under $700,000. Other buyer-friendly markets with a median sales price below $700,000 include Rego Park, where the median sales price in Oct 2021 was $389K, trending down -by 8.9% year-over-year. The sale-to-list price ratio was 100 percent.
The median list price of homes in Sheepshead Bay was $499K in Oct 2021, trending down -by 5% year-over-year. The sale-to-list price ratio was 97.72 percent. The median list price of homes in East Flatbush was $650K, trending up 8.9% year-over-year. The sale-to-list price ratio was 100 percent. The median list price of homes in Brighton Beach was $569K, trending up 16.4% year-over-year. The sale-to-list price ratio was 97.03 percent.
Buyers have a bit more negotiating power in neighborhoods where the median home price falls between $700,000 and $1 million. In areas like Midtown East, where the median sales price is $872,500. Homes in Midtown East sold for approximately the asking price on average in Oct 2021. The other neighborhoods best for buyers looking to spend between $700,000 and $1 million are Bayside, where the median sales price in Oct 2021 was $720,000 and the sale-to-list price ratio was 99.37 percent; Gravesend ($684,500, 96.98 percent); Flushing ($838,000, 96.38 percent); and Bay Ridge ($499,000, 98.14 percent).
All of this could vary from time to time and can be checked on Realtor.com. Check out some of the best neighborhoods for investing in New York for the long term→ These neighborhoods have been selected from all five boroughs.
If you think of investing in NYC, you have decided on a long-term investment property. Here are the ten neighborhoods in NYC having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.
Inwood North
Marble Hill
Washington Heights Southeast
Roosevelt Island
W 115th St / Amsterdam Ave
E 57th St / Madison Ave
Madison Ave / E 52nd St
W 58th St / Grand Army Plz
Tribeca South
W 70th St / Amsterdam Ave
Top Real Estate Estate Markets in New York
Buffalo real estate market
The Buffalo real estate investment offers a surprisingly good deal with low prices and relatively high rental rates. The Buffalo real estate market is dominated by older homes. A majority of homes in the Buffalo housing market were built before World War 2. Interestingly, this also means that many small apartment buildings are designed to serve a population that rented small units close to their jobs.
For example, roughly a third of homes are single-family detached homes, while almost half take the form of small apartment buildings. This creates an excellent opportunity for those in the market for Buffalo rental properties. You could buy a small apartment building with multiple tenants for the cost of a single rental property in a more expensive New York real estate market.
Syracuse real estate market
Syracuse’s real estate market offers cheaper property with a higher return on investment and a less hostile legal climate. It is one of the better choices if you want to invest in New York state. Another issue that factors into the equation is the job market. Lots of cities have a great quality of life but almost no one can afford to live there.
The Syracuse housing market ranked 6.3 out of 10 for its job market. That’s better than rural and much of upstate New York. And it is why there is a slow trickle of people moving in to replace those who leave. That’s why the Syracuse real estate market has a net migration of 5 or a stable population. This is in sharp contrast to the depopulation seen in most Rust Belt cities. It also means Syracuse’s real estate investment properties will hold their value for the foreseeable future if they don’t appreciate it.
Albany real estate market
Albany is a steadily appreciating real estate market. While it isn’t as famous or hot as NYC, it offers an affordable entry point and a massive pool of perpetual renters. Though it may not be somewhere you want to live, many locals are choosing to stay and make their homes here. And that will continue to drive demand for Albany real estate investment properties as long as they are priced right.
Rochester real estate market
You can also consider Rochester. The Rochester real estate market is stable, offering slow appreciation, affordable properties to outsiders, and good returns. It has strong, long-term potential that is only buoyed if NYC collapses. And this is one of the reasons why being everything the Big Apple isn’t is in your favor.
The Rochester real estate market enjoys a healthy population profile. Roughly a quarter of the population consists of children, and many are likely to remain due to the healthy job market. It also means that the Rochester housing market won’t crash if the job market weakens the way San Francisco collapses whenever the tech bubble bursts. Others choose to remain here because of the low cost of living.
Some of this article’s information came from referenced websites. Norada Real Estate Investments provides no explicit or implied claims, warranties, or guarantees that the material is accurate, trustworthy, or current. All information should be validated using the below references. Norada Real Estate Investments does not predict the future US housing market. Buying a rental property needs research, planning, and budgeting. Not all investments are good. Always do research and consult a real estate investment consultant.
References
https://www.redfin.com/blog/data-center
https://www.zillow.com/new-york-ny/home-values
https://www.realtor.com/realestateandhomes-search/New-York_NY/overview
https://streeteasy.com/blog/nyc-housing-market-data/
https://www.redfin.com/city/30749/NY/New-York/housing-market
https://www.elliman.com/corporate-resources/market-reports
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