Trends & House Prices – Forbes Advisor

When Covid-19 hit in 2020, New York’s suburban and rural areas were considered buyer’s markets.

“That really shifted and they became seller’s markets in spring 2020,” says Mihal Gartenberg, a licensed associate real estate broker with Coldwell Banker. “[With NYC], by spring and summer 2021, you could feel the shift in the air. By fall, we were a full-on seller’s market.”

Fast forward to 2023, and the demand for homes is still there. But several factors are keeping sales down. Low inventory across the state is increasing buyer competition and pushing prices higher—and soaring mortgage rates are keeping would-be buyers on the sidelines.

Current Housing Market in New York State

New York is home to everything from the world’s financial capital to rural farmland, beaches, mountains and everything in between.

“All of these contribute to the diversity of the housing market,” says Jeffrey Decatur, a RE/MAX Capital broker associate.

There’s strong demand for luxury homes in Manhattan, which is the most expensive housing market in the U.S., while the tech hubs around Rochester, Syracuse and Buffalo attract new homebuyers from all over the world. Vacation homes and investment properties are popular in family-friendly areas and regions that rely on tourism.

But while people are still relocating to the Empire State, more have been leaving since the onset of the pandemic. The state saw the biggest population drop between 2020 and 2023, losing 2.6% of its residents overall, according to the Moving Migration Report from North American Moving Services.

These population shuffles may contribute to the state’s changing real estate landscape.

New York Housing Trends and Stats

Across New York state, real estate listings and sales are down compared to a year ago, but that may reflect how strong the market was in 2021 and 2022. Additionally, inventory is low as homeowners are waiting to sell until market conditions change.

Home Listings and Sales Volume Are Down in New York

Statewide, the number of new property listings was down 22.4% in the second quarter of 2023 from a year prior, according to the New York State Association of Realtors (NYSAR). The industry group also noted that closed sales had dropped 22.6% from the previous year.

Some areas of New York saw an even steeper drop in the number of homes for sale. Listings in Orleans and Putnam counties were down 37.3% and 34.5%, respectively, in June 2023 compared to a year prior, according to the NYSAR report. Closed sales declined in both areas during that same period.

Of the state’s 62 counties, only two (Allegany and Essex) saw an uptick in listings. And closed sales increased only in Essex, Hamilton, Livingston and Yates counties.

Home Prices and Inventory in New York Are Dropping

Statewide, the median sales price reached $405,000 in the second quarter of 2023, which is a 1.8% decrease year over year. That’s 2.7% lower than the national median home price of $416,100.

Prices aren’t dropping in all areas of New York, though. In many communities—especially in affordable markets—the low inventory is increasing competition among homebuyers and putting upward pressure on prices. Home prices climbed in nearly half of New York counties during the second quarter of 2023.

Real estate brokerage firm Redfin says the following New York metro areas have the fastest-growing sales prices in the state as of Q2:

• Livingston Manor. 60.8%
• Aurora. 59.9%
• De Witt. 51.9%
• Saratoga Springs. 47.1%
• Malta. 38.7%

Some homeowners are putting off the decision to sell despite the price increases. Within the past few years, they bought homes or refinanced into super-low interest rates. Now, they’re waiting for market conditions to improve before putting their homes on the market, further constraining the already limited housing supply. NYSAR’s report found that New York had 3.2 months of housing supply in July 2023, a 25.3% drop from the previous year.

More buyers are also entering the new-home market as a way to deal with the low inventory of existing homes for sale. Construction and new-home sales have surged in recent months, which is pushing builder confidence to levels not seen in a year.

New York Housing Market Predictions

A combination of elevated mortgage rates, higher home prices and tight inventory is posing affordability challenges to most homebuyers in New York.

In addition to higher borrowing costs, the 2024 election is another reason the housing market may continue to stagnate in the upcoming year.

“Presidential election cycles can have short-term negative impacts on housing,” according to global financial services firm BTIG.

Homebuyers generally proceed more cautiously because they’re unsure about upcoming policy changes and economic conditions. “People don’t like so much uncertainty when they’re buying so much debt,” Gartenberg says.

However, the potential slowdown could be short-lived. Home prices in New York have steadily increased over the past 18 years, growing from a median price of around $280,000 in 2005 to $405,000 in 2023—a total increase of 44%. Over the next year, NYSAR expects home values to increase by 4%.

Should You Buy or Sell In the New York Housing Market?

While home sales are down across the state, “the market is still very active and healthy,” Decatur says.
Sure, there are reasons to stay put. You might avoid buying or selling if you can’t afford a higher monthly mortgage payment. Or, you won’t be able to find the type of home you need and you’re happy with your current living situation. It’s also not a great idea if you’re trying to time the market to make a profit.

However, it could be a good idea to buy if:

• You’re relocating to a new area
• You can afford the new housing payment

And selling your home could be a good idea if:

• The proceeds from your home sale help you make a large down payment or pay down the rate on your next home
• You don’t have a ton of equity, but you can afford a higher interest rate and home price
• Inventory is very tight in your neighborhood
• You need to relocate

“The one thing you don’t want to do is think yourself into doing nothing at all,” Decatur says. “When someone has to buy or sell, the water is fine. Jump in.”