NYC and NYS Real Estate Update: Navigating the 2023 Market Landscape

Here are the most current updates in both the NYC and broader New York State property markets, straight from the heart of the real estate industry. We've been navigating through some challenging times in the housing market of New York State due to a prolonged scarcity of properties and climbing interest rates. The May 2023 residential report from NYSAR provides some vital takeaways.

We've observed a slight dip in home prices which could potentially turn the tide in favor of home buyers. But the chronic shortage of inventory continues to be a thorn in the side for buyers, as the quantity of available homes keeps dwindling. A decline in completed and in-progress sales, coupled with a decrease in fresh listings, mirrors the stringent market conditions. And with a marginal bump in interest rates, buyers must exercise caution when contemplating their financial strategies.

Now, let's dive into the most recent housing report brought to us by NYSAR and unpack the key highlights.

In-progress sales in New York State declined by 4.1 percent to 12,483 units. This metric is viewed as a future-facing indicator of home sales, based on contract signings. Completed sales reduced by 20.4 percent to 8,819. Homes available for sale witnessed a drop of 16.4 percent to 32,535 units. Price drops were observed, with the Median Sales Price down 2.4 percent to $400,000. The average sales price also went down by 3.1 percent, arriving at $532,696. On average, sellers received 101.4% of their initial listing price at sale, a year-over-year decrease of 1.6 percent. The number of days on the market saw an uptick of 13.2 percent to 60 days. The months' supply of inventory remained steady at 3.2 months. A dip in Home Prices amidst a persistent shortage of Inventory According to the NYSAR housing report, home prices across New York State showed a slight decline in May 2023. This minor drop could serve as an opening for home buyers to step in. The median sales price went down from $410,000 in May 2023 to $400,000 the following month, marking a 2.4 percent decrease.

Despite the price drop, the report brings to light a relentless shortage of inventory. The stock of homes in New York State went down by 16.4 percent in May as compared to the previous year. This is the 43rd consecutive month that the available home count has seen a year-over-year drop. The decreasing inventory is a hurdle for potential home buyers, as limited supply leads to a competitive market and necessitates quick decision-making.

A slump in Completed and Upcoming Sales The housing report unveils a notable slump in completed and pending sales. Completed sales went down from 11,075 homes in May 2022 to only 8,819 sales in May 2023, a significant decrease of 20.4 percent. Similarly, upcoming sales fell by 4.1 percent from 13,017 homes in May 2022 to 12,483 units last month. These figures indicate a slowdown in the overall property market activity, potentially due to the inventory shortage and other market dynamics.

A reduction in Fresh Listings Another critical takeaway from the housing report is the decline in fresh home listings. In May 2023, fresh listings went down by 18.4 percent in year-over-year comparisons. This downturn signifies a decrease in the number of homes entering the market, further contributing to the existing shortage of inventory. With a decrease in new listings, buyers may have to brace for stiffer competition and limited options.

A slight surge in Interest Rates May 2023 saw interest rates experiencing a minor rise. Starting the month at 6.39 percent on a 30-year fixed-rate mortgage, the rates climbed to 6.57 percent by the end of the month. According to Freddie Mac, the monthly average for a 30-year fixed-rate mortgage settled at 6.43 percent, slightly higher than the 6.34 percent average in April. While the hike is relatively small, it can affect the affordability and purchasing power of potential buyers.

Market Projections for 2023 Drawing from the current trends and insights from the May 2023 housing report from NYSAR, it's essential to anticipate what the remainder of 2023 could look like for the New York housing market. Though home prices have seen a slight dip and might present an opportunity for buyers, the ongoing inventory shortage remains a tough challenge.

With the available homes continuing to dwindle and the reduction in fresh listings, the market is likely to remain fiercely competitive. Given the slight rise in interest rates, it's vital for buyers to meticulously evaluate their financing options and the impact on affordability. These factors suggest that New York market conditions will continue to favor sellers, with buyers facing limited options and potential upward pressure on prices.

However, it's crucial to keep tabs on market dynamics as multiple factors, such as changes in the economy, mortgage rates, and housing policies, can sway the market direction. As a real estate professional, I strive to stay informed through NYSAR's market data reports to provide accurate guidance and insights to my clients for the remainder of 2023.