Are real estate prices dropping in New York City according experts?
“This may be the worst time in my living history for the home buyer,” said one analyst as mortgage rates and prices are at their highest in years.
New York is one of the most expensive cities in the US. According to Property Club NYC, the boroughs with the lowest median house price were the Bronx ($519,000), Staten Island ($550,000), and Queens ($605,000). Brooklyn and Manhattan topped the list with a median sale price of $900,000 and $1.16 million, respectively. This compares to a median house price average of $454,900 for the whole nation.
However, it looks like these prices are set to drop as the nation deals with an overinflated market as well as high mortgage rates, at least in comparison to the last two decades.
“Mortgage rates are sky high, prices are sky high, and there’s no inventory,” said Mark Zandi, the chief economist at Moody’s Analytics. “This may be the worst time in my living history for the home buyer — it just doesn’t make sense.”
Mortgage rates are at their highest level for 20 years. The average 30-year fixed rate sits at 6.95%, more than double it was at the start of the year.
“Affordability was the worst it’s ever been, and that was before 7 percent mortgage rates,” said Rick Palacios Jr., John Burns Real Estate Consulting’s director of research.
Emphasising this, New York house prices have been rising every month for the last five years. However, after a surging in price between July 2020 and July 2022 have begun to decrease. This information is from the Case-Shiller Home Price Index.
Alongside this there are 9% less house listings compared to November 2021. While this could suggest that house prices would rebound, if the reason was the market isn’t there, it could also point to the lack of belief prospective home sellers have that they can sell their house for a good price. Number of sales are down 12.6% percent compared to a year ago.
How much could house prices fall by in New York?
Morgan Stanley predicts home prices will fall 7 percent, from the peak of pricing in June 2022 to December 2023. Moody’s Analytics expects prices to drop 10 percent, from June to summer 2024.