At the start of the year, the real estate market in New York City showed signs of returning to some normal seasonal trends. This is after two years of unprecedented fluctuations caused by the COVID-19 pandemic.
The market remains on a steady course, and while we are still seeing signs of normalcy, there are lingering questions for buyers and sellers on what to expect over the next few months. So, in this week’s blog, we’re answering some of the most common questions around what’s really going on in New York City real estate today.
What’s happening right now in NYC real estate?
Supply and demand are two important metrics to look at in the current NYC real estate market. As you can see below, while supply is getting stronger, it’s still not outpacing demand. This is leading to a competitive marketplace and higher prices within some segments.
We’ve also seen some small dips in the number of new listings and contracts signed through April. However, this shouldn’t be looked at as something indicative of a larger trend. This is more likely associated with New York City schools going on break during mid-April.
What does this all mean? If you’re buying, know that supply does continue to increase. However, demand continues to be high within certain neighborhoods, such as Greenwich Village and Brooklyn, as well as for larger, renovated apartments. This may drive up competition and prices.
If you’re selling, be realistic with your pricing. As supply continues to go up, the market may be more favorable to buyers and you’ll need to be realistic with what you’re asking.
Will rising interest rates impact NYC real estate?
During the COVID-19 pandemic mortgage rates hit incredible lows, which led to more buyers looking to take advantage of these favorable rates.
However, as the pandemic has subsided and inflation continues to plague the economy, interest rates are on the rise. With higher rates, we’d expect to see a slow down in the market.
While there are some signs of buyers shying away due to the higher interest rates, overall the market remains competitive. According to the New York Times:
“The problem is there are so few homes for sale that even a slower market is unlikely to create enough inventory to satisfy demand anytime soon.”
Early in the pandemic, lower rates helped enable higher prices, as the lower interest helped offset the higher list price for buyers.
Since we are seeing supply continue to tick-up, this could lead to prices going down. This is an area we will continue to watch!
Are real estate prices in New York City going down?
As we mentioned above, there are certain segments where pricing remains high. This includes higher demand neighborhoods, renovated homes and those with larger square footage.
According to the New York Times, the median home price in New York City has been on a steady rise for the last two years.
While we aren’t seeing a sharp decline, yet, as supply and interest rates continue to go up we should start to see some leveling off in prices.
As we always say, you can’t time the market! So it’s important to continue to watch these trends.
What’s happening with the rental market?
During the height of the pandemic, New York renters saw sharp declines in rental prices and broker fees, as city dwellers began to migrate out of New York and landlords struggled to fill vacancies.
Today, the rental market looks drastically different, with rents up almost 25% across the board. Those that scored unprecedented deals during the pandemic are now getting a bit of sticker shock.
Rental prices are not likely to ease anytime soon, as we’re heading into the historically busy season. However, the fall and winter months may bring some relief.
Have more questions?
As the market continues on its path back to normalcy, we know that there is a lot to unpack. We’re always here to answer your questions and help guide you! Feel free to contact us anytime!
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