The housing market has seen some serious fluctuation over the last 2 years, especially in places like New York. Many cities across America are struggling to keep up with housing demands, and rent continues to climb. So what is the real estate market like in New York right now ?
In 2020, living in New York seemed feasible for some people for a brief moment. Vacancy rates went up drastically as locals tried to escape the pandemic by fleeing to the less crowded states, making room for those who had been eyeing apartments in NYC for some time.
However, as we came into 2021, everything changed. The stimulus money ran out, and landlords stopped giving out handouts. As a result, the demand for housing has been more than anyone could have expected, and prices have been driven to an all-time high across the country.
Which parts of New York are most affected?
New York City has been rated the most expensive place to live in the US and is the 9th most expensive place to live globally. Roughly 64 percent of New York State’s population resides in the city, so naturally, this is where the high demand comes into play. While the median housing price for New York State is $371,000, it’s over double that in NYC at $850,000.
Prices were considered high before the pandemic, and it was a relief when they finally dropped. But now, in order to make up for that lost income, prices are continuing to soar past even what they were in 2019. The average rent increase is roughly 20 percent and climbing.
Manhattan has the highest median housing price of all the boroughs in the New York real estate market, at $1.4 million, followed by Brooklyn at $895,000, Queens and Staten Island both at $600,000, and finally the Bronx at $390,000. In these areas, prices for luxury housing can easily be several million dollars, with under $1 million being rare for family homes.
However, things are still very manageable outside the city, especially the farther away you get. While prices are still higher than before, the demand for upstate New York is not even close to the demand for city territory. If you’re looking to move to New York State but are not dead set on city life, there are some beautiful properties well under the median price range, ranging from a couple of hours away to the other side of the state.
Outside of the city, certain areas have not only a below-median price for New York, but it even falls below the national average. For example, Rochester, NY is the fourth most populous city in the state and is still extremely financially doable, with the median being only $149,900 thousand. Buffalo, NY comes in a close second at $160,000, followed by Liberty, NY at $174,100 thousand, and Albany, NY at $234,500. The only downfall may be that outside of the city; property taxes tend to be much higher.
What Is expected for 2022?
Inflation has been a topic of conversation for many months now, as the price of housing, gas, food, and pretty much everything else continues to rise. In addition, companies are still recovering from supply chain disruptions, and it appears everywhere is understaffed these days.
Fish, meat, and poultry prices are up over 12 percent from January 2021, and gas has increased even more so, with record-breaking prices around the country. As a result, the overall inflation rate via the Consumer Price Index was 7.9 percent through February, the most we’ve seen since 1982.
Unfortunately for the housing market, Inflation affects more than just day-to-day prices. Housing costs rise and fall on numerous factors, including building materials, the local cost of living, and housing demands for certain areas. As long as inflation continues, the cost of housing will continue to rise.
Mortgage rates have also gone up and are the highest they’ve been since 2019. Add the increased interest rates on top of the base cost of a mortgage, and you’re looking at an average monthly increase of $290 in the last year. In New York, mortgage rates are 1 basis point higher than the national average rate of 4.83 percent, with the average monthly payment ending up at about $2,800.
It’s difficult to predict what will happen for the remainder of 2022, with professionals estimating anywhere from a 3.9 percent increase up to 16 percent. But, at the very least, the continued growth should certainly be slowing down now, and we are unlikely to see a market crash in the next few months.
Is now the time to buy?
If you’re waiting for prices to go down, experts say you will likely be waiting a long while. As we’ve previously noted, the market is likely to slow down over the next year, but nevertheless continues to rise.
Until New York can catch up with supply-demand, vacancies will continue to dwindle, and choices will be scarce, so it may be best to pull the trigger sooner rather than later. Luxury housing is somewhat easier to find than more affordable options at the moment, but over the next couple of years, that should change. Developers may turn more office buildings into residential properties due to the increase of people working from home, and more people working from home means they don’t have to live near the city to do their job.
If you’re looking to grab up a commercial property, now is the time to do so. Investors have been known to buy larger units as a NYC real estate investment, subdivide it, and then sell it for a profit. Non-residential properties can be an excellent NYC real estate investment, especially with the actual New York real estate market, as long as you get the proper permission to turn them into condos, lofts, or apartments. There are also zoning regulations that limit housing supply, and New York City will give tax breaks to investors who can turn things like commercial properties or warehouses into livable rental units.
How can I best navigate the New York real estate market?
The housing market is certainly warm, and all signs point to it staying that way for some time. If you’re not looking to spend your life savings on a condo in NYC, perhaps real estate in Upstate New York is a better option for you. On the other hand, if you’re looking for the waterfront, amenity-packed apartment of your dreams, by all means, check out some beautiful Manhattan or Long Island real estate and grab it while you can.
Perhaps you’re looking for something to invest in and want to help solve the NYC housing crisis—there is certainly an opportunity for you. Whatever the case may be, BARNES New York has all the information you need, and real people to help guide you every step of the way.
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