If you are looking at buying an investment property in the NYC real estate market, you’ll find all the housing statistics on this page to help you make a sound decision. Let us first look at the statewide data. The New York real estate market has been booming year-over-year. With supply and demand continuing to favor sellers, prices continue to rise and temper homebuyer activity. The overall median sales price increased by 5.7 percent to $280,000 for the year 2019. Pending sales increased by 3.0 percent and closed sales were down 1.1 percent to end the year.
2020 began with increased sales activity in the New York housing market, with the year expected to be a strong one for the industry. The first quarter of 2020 started strong but as we moved into March, the spread and impact of COVID-19 became more apparent. Until mid of March 2020, neither pricing nor transactional real estate in New York saw any major threat emanating from the pandemic. As we moved further into March, the spread and impact of COVID-19 reflected more in the NYC real estate sales, as it started to diminish.
New homes for sale in New York decreased 9 percent and pending home sales were down 2.9 percent. Inventory levels decreased by 10.4 percent. Months supply of inventory was down 12.1 percent to 5.1 months. The median and average real estate pricing figures showed an upward trend. The Median sales price increased 6 percent to $291,532. Following the uncertainty and upheaval of March, April was marked by historical lows in sales activity and the strongest pricing trends of the year. As the health crisis stabilizes in the city and surrounding areas start opening up, the industry is watching May with hopes of returning activity and buyer interest.
More details of the latest housing market trends within the limits of the city of New York are given below.
NYC Housing Market Trends & Statistics 2020
Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. We shall now discuss some of the most recent housing trends in the New York area from multiple sources and compare them with the past couple of years. We shall mainly discuss median home prices, inventory, economy, growth, and neighborhoods, which will help you understand the way the local real estate market moves in this region.
New York is a fairly walkable city in Queens County with a population of approximately 8,174,290 people. NYC has been one of the hottest real estate markets in the nation for many years. Currently the NYC housing market is relatively more friendly to buyers than sellers. Despite the cooling off, New York City regularly ranks among the most expensive real estate markets in the world. However, that’s due to demand that simply hasn’t let up.
Since 2015, the median home price in NYC has appreciated by roughly 28.24%. NYC’s real estate appreciation rate in the latest quarter was around 1.08% which equates to an annual appreciation rate of 4.41%. As a seller you can choose to market your home to potential buyers. Any homeowner looking to cash out and sell off their property should do it in the current phase.
However, if you looking to buy a home, you should consider a thing called a tipping point. Nationally, the median tipping point is around two years but in New York it’s 5.8 years. The higher a home is priced, the longer you’ll need to stay in it to invest pay off relative to renting. It is smarter to buy a property if you plan to be in an area for seven years or longer. Please note that many variables can potentially impact the value of a home in NYC (or any other market) and some of these variables are impossible to predict in advance.
According to PropertyShark.com’s analysis of the impact of COVID-19 on the NYC residential market, despite a downward trend in the transactional activity, prices remain unaffected. The pricing trends were firmly positive throughout the crisis and the median sale price in NYC remained steady above the same period last year. The month of March saw a 5% year-over-year gain in the median sales price in the NYC real estate market. Pricing continued to strengthen in April as well. The month-end posted a year-over-year increase of 5.48% in the median sale price. At $724,900, the first week of April featured the highest median sale price of 2020 by that point, only to be surpassed by the third week of April with its $750,000 median.
Chart Courtesy of Propertyshark.com
The following analysis of the NYC housing market has been prepared by Redfin.com, a national real estate brokerage. The report compares year-over-year key housing metrics of the “city of New York” from April 2019 to April 2020.
In April 2020, about 3 percent of their customers waived either a financing or inspection contingency last month.
Home sales in the NYC housing market were down 68 percent from last April.
The typical home that sold last month sold for $640,000, which is equal to the year before.
At the same time, the number of homes for sale is declining by 23 percent over the year.
They also went off the market in 89 days-7 days faster than this time last year.
Median Days on Market was 89, down 7% year-over-year.
Average Sale-to-List Percentage was 97.7%, up 1.5% year-over-year.
New listing decreased by 84% year-over-year.
Total inventory increased by 23% year-over-year.
The no. of homes that were sold in April 2020 was 535, down by 68% year-over-year.
These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? While many have lost jobs, making them ineligible for a home mortgage, some sellers have taken their homes off the market. The decrease of 84% in the number of new listings indicates that new sellers are not willing to put their homes on the market until the pandemic is over or at least until the restriction orders imposed by the local government are revoked.
In a healthy, balanced market, it would take about six months for the supply to dwindle to zero. In terms of months of supply, the NYC market can tip to favor sellers if the supply drops to below six months of inventory. But as the inventory is increasing month-over-month, it will favor the buyers in price negotiations. The home prices are predicted to remain flat or drop by 2 to 3 percent until the first quarter of next year.
According to me, at no point in 2020 the buyers will have to enter into a fierce bidding war to start competing with each other. The NYC housing market will remain cool. It’d trend more or less like a balanced real estate market until the pandemic is over.
Let’s take a look at the statewide of the New York real estate market published by the New York State Association of REALTORS®. The figures include single-family properties, townhomes, and condominiums. The comparison is year-over-year for April.
The Median Sales Price in New York was down by 2.6 percent to $262,000.
The Average Sales Price was up by 2.7 percent to $361,663.
Days on Market decreased 7.3 percent to 76 days.
New Listings were down 68.4 percent to 6,507.
Pending Sales decreased by 66.6 percent to 4,287.
Inventory shrank 17.6 percent to 53,041 units.
Months Supply of Inventory was down 10.3 percent to 5.2 months.
The housing affordability index has increased by 7% to 138 as compared to April last year. An index of 120 means the median household income is 120% of what is necessary to qualify for the median-priced home under prevailing interest rates. A higher number means greater affordability.
Chart Courtesy of the New York State Association of REALTORS®
NYC Real Estate Market Forecast 2020 – 2021
What are the NYC real estate market predictions for 2020? Let us look at the price trends recorded by Zillow over the past few years. It has a track record of being one of the best long term real estate investments in the U.S. NYC home prices nearly doubled in the 2010s. According to Curbed by Miller Samuel/Douglas Elliman, the median home sale price for all of New York City in the first quarter of 2010 was $383,699.
Prices started rising in 2013 and by the end of 2018, that number had almost doubled to $658,000. 2018 was the sixth consecutive year of home price gains in New York City. Since last year the NYC home prices have remained flat. The real estate market was already cooling off and the pandemic has further slowed it down after NYC became its epicenter. The latest NYC real estate market forecast is that home prices may decrease by roughly 3% in the next twelve months.
The good thing for buyers is that NYC is currently a buyer’s real estate market – which refers to a situation in which supply exceeds demand, giving purchasers an advantage over sellers in price negotiation. It is expected that the supply exceeds demand metrics will continue to favor buyers at least until the first quarter of 2021.
Here is the visual representation of historical NYC home prices and the latest forecast until March 2021.
Snapshot Courtesy of Zillow.com
Here is a short and crisp NYC housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for New York City is 77% and it is predicting a positive trend. LittleBigHomes.com estimates that the probability of rising home prices in NYC is 77% during this period. If this price forecast is correct, the New York City home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the NYC Housing Market Forecast.
New York Real Estate Market – New York Homes for Sale
New York is dominated by renter-occupied one or two-bedroom apartments. 76.75% of New York’s dwellings are rentals. As per Neigborhoodscout.com, a real estate data provider, one and two-bedroom large apartment complexes are the most common housing units in NYC. Other types of housing that are prevalent in NYC include single-family detached homes, duplexes, rowhouses, and homes converted to apartments.
The New York housing market has affordable townhomes. New York’s single-family homes account for just 1.15% of the city’s housing units. At the national level, the single-family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single-family rental units. With 2020 being, theoretically, in the middle of a boom, there are still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.
Currently, there are 4934 homes for sale in New York, NY on Zillow, an online real estate database company. Additionally, there are 717 homes for rent. Under potential listings, there are about 15 Foreclosed and 2691 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
The median list price per square foot in New York is $660, which is higher than the New York-Newark-Jersey City Metro average of $294.
The median price of current listings in New York is $760,000.
The median price of homes that were sold in March was $573,600.
The median rent price is $2,900, which is lower than the New York-Newark-Jersey City Metro median of $2,950.
There are currently 26,552 homes for sale and 22,691 homes for rent in New York on Realtor.com, a real estate listings website. These could include open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. 705 homes were newly listed on the market within the last week. According to their statistics, in April 2020, the NYC housing market was a buyer’s real estate market, which means there are roughly more active homes for sale than there are buyers. The supply for housing outpaced the demand.
The median list price of homes in New York, NY was $649K in April 2020, trending down -23.2% year-over-year. The median listing price per square foot was $339. The median sale price was $635K. Ideally a buyer would prefer a sale to ask price ratio that’s closer to 90%. The sellers in NYC have managed to hold good leverage in these negotiations in the past month. On average, they could sell homes for 96.88% of the asking price. A seller would always prefer scenarios that can yield a ratio of 100% or higher.
Graph Courtesy of Realtor.com®
There are 190 new construction single-family houses for sale in NYC within a price range of $150,000 to $3.8M. You can find relatively affordable new construction homes in n Graniteville neighborhood. Graniteville neighborhood has a median price of $399,000. The asking price of single-family homes can start from $35,000 and can go up to $145M for a luxury property located in the North Shore neighborhood in the city of Staten Island, NY. North Shore is a popular neighborhood with a median price of $439,000. Some of the popular neighborhoods in NYC are Floral Park, Jamaica, Woodside, Queens Village, Brooklyn, Staten Island, Astoria, Teaneck, Riverdale, Rosedale, Flushing, Bayside, Kew Gardens, Queens and Maplewood.
Tribeca has a median listing price of $4.2M, making it the most expensive neighborhood to live in New York City. The Chelsea neighborhood has a median listing price of $1.9M. Another expensive neighborhood is Midtown, where the median sales price in 2019 was $1.85 million with a sale-to-list ratio of 90 percent. These are expensive but buyer-friendly neighborhoods in New York City. Buyers have a bit more negotiating power in neighborhoods as compared to sellers. Jackson Heights is one of New York City’s most buyer-friendly neighborhoods at the moment with home prices under $700,000. Other buyer-friendly markets with a median sales price below $700,000 are Rego Park, Sheepshead Bay, East Flatbush, and Brighton Beach. Riverdale is the most affordable neighborhood, with a median listing price of $382,000.
NYC Real Estate Market: Foreclosure Statistics In 2020
As per the New York City foreclosure data by Zillow, in New York 0.1 homes are foreclosed (per 10,000). This is lower than the New York-Newark-Jersey City Metro value of 0.9 and also lower than the national value of 1.2. The percent of delinquent mortgages in New York is 1.8%, which is higher than the national value of 1.1%. The percent of New York homeowners underwater on their mortgage is 6.7%, which is lower than New York-Newark-Jersey City Metro at 8.5%.
There are currently 791 properties in New York, NY that are in some stage of foreclosure (default, auction, or bank-owned) while the number of homes listed for sale on RealtyTrac is 1,509. In April 2020, the number of properties that received a foreclosure filing in New York, NY was 0% higher than the previous month and 0% higher than the same time last year.
Potential Foreclosures in New York
791 (RealtyTrac)
Homes for Sale in New York
1509
Recently Sold
3382
Median List Price
$280,000 (6% drop vs Mar 2019)
In NYC, the zip code with the highest foreclosure rate is 10026, where 1 in every 2441 housing units is foreclosed. 10027 zip code has the lowest foreclosure rate, where 1 in every 8766 housing units becomes delinquent.
Here is the graph showing the number of new foreclosure filings in New York by foreclosure type.
NYC Real Estate Market: Is It A Good Place For Investment?
Now that you know where NYC is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Is NYC a Good Place For Real Estate Investment? Many real estate investors have asked themselves if buying a property in NYC is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers in 2020.
If you are looking to make a profit, you don’t want to buy the most expensive property on the NYC real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in NYC that you might move into or sell at retirement in the future. Either way, knowing your profit potential and purpose is the first thing to consider.
Let’s take a look at the number of positive things going on in the NYC real estate market which can help investors who are keen to buy an investment property in this city.
1. The Impact of International Buyers in New York
Despite all the talk about the one percenter dominating this and that, the truth is that the international elite is bolstering the price of luxury real estate in New York City. They see NYC real estate investment as part of a multi-pronged approach. The property is almost certain to appreciate, so it is an investment. Owning a piece of the NYC housing market gives them a place to stay if they have to flee their home country.
The money invested in the NYC housing market is typically not reported to their government, and it is almost guaranteed not to lose value. Ironically, foreign owners like these are much more willing to take a modest loss when they sell when they are no longer interested in the property.
2. New York City’s Expanding Luxury Development
New York’s rent control laws don’t apply to luxury units, and developers have chosen to build these instead of the affordable housing the city needs. However, this development isn’t limited to the densest parts of New York City. For example, Staten Island’s North Shore is seeing new luxury condo construction. Interest in the area is driven by both the improved transit via the new ferry service and luxury buyers seeking relative bargains. This is aside from the oversupply of luxury penthouse units in the NYC housing market.
3. The Softening New York Luxury Market
The increasing supply of luxury real estate relative to demand is leading to more being done to sell units at their list price. For example, luxury apartment buildings are offering more and more amenities to justify their high monthly rents. Another sign that the market is softening is the growing time on the market for such properties. A few notable properties have sold only after being subdivided into more “affordable” luxury units.
This means that investors with the money could buy a larger unit as a form of NYC real estate investment, subdivide it, and then sell it for a profit. If you have the cash and can close on the property, you could buy these premium properties for up to half of the listing price, too. The alternative is buying slow-moving one and two-bedroom apartments knowing they’ll eventually be worth more.
4. The Legislation on the Table Will Increase NYC Rental Rates
There are around a million rent-stabilized apartments in New York City. There are several bills in the Democrat-controlled state senate and a massive tenant’s rights push that will likely lead to tighter restrictions on landlords. For example, it would be harder to get apartments removed from the rent-stabilization policy and limit the ability of landlords to raise rents after existing tenants move out.
While this hurts landlords who own rent-controlled properties, stricter rent control rules result in a reduction in housing supply and rents going up five percent more than they would have otherwise. Conversely, landlords who don’t want to deal with the hassle anymore may be willing to sell properties at a discount simply to get out from under the oppressive regulations.
5. NYC Rent Prices Remain High
The factors that led to the incredibly high rental rates in the NYC real estate market haven’t changed. One is the sheer number of people crammed into such a small space. Another matter to consider is all the zoning regulations that limit housing supply, though New York City has had the sense to give tax breaks for those who turn warehouses and commercial properties into rental units.
This means that non-residential properties can be a viable NYC real estate investment, assuming you can get permission to turn it into lofts, condos, or apartments. Strict eviction laws that make it difficult to remove tenants who are a nuisance, time-consuming to remove if late on rent, and nearly impossible to get rid of it in a rent-controlled unit all force property owners to charge much higher rent in the NYC housing market. It is the classic case of cost-shifting causing others to pay a fortune.
6. The High Average NYC Rental Rates
The median rent in New York City now exceeds three thousand dollars a month. One-bedroom apartments and studios rent for roughly three thousand dollars a month, while two-bedroom apartments rented for about 3,800 dollars a month. This is why the NYC real estate market is one of the most expensive in the world.
7. The Known Opportunities for Bargain Hunters
The NYC real estate market may seem dominated by five and ten thousand dollars a month apartments in Tribeca, but there are much cheaper neighborhoods. If you’re considering buying NYC real estate investment properties, start looking in neighborhoods like East Brooklyn, High Bridge, and Saint Albans. The average rent for apartments in Saintalbans is roughly 1200 dollars a month, while rents are less than 1500 a month in High Bridge. Since property values are based on multiples of the rental income, this means that you can snap up a small apartment building in the cheapest NYC real estate market for the cost of one luxury condo.
8. The Overall Cooling of the NYC Housing Market
The NYC housing market can be described as cool, though some will call it a buyer’s market. Things slowed down significantly in 2016 and 2018 as several groups of international buyers found it harder to buy properties or had less need to do so. On top of this is the trend of properties selling below their asking price unless they’re the cheapest unit in the neighborhood. Sales volume has increased somewhat, but there is a wider selection now than several years ago. More importantly, prices are a tenth to a quarter below their 2015 highs. This is a good time to buy an NYC real estate investment property because the market will continue to warm up as long as the economy remains stable.
9. The Tax Laws in New York City Are Triggering Sales
Any property in the NYC real estate market is going to be subject to high property taxes. That’s simply a fact of life for property owners in the NYC housing market. However, several tax law changes at the local and national level are hitting several property owners hard. The federal tax law change to eliminate the state and local tax deduction means that many property owners can’t write the entirety of their huge NYC property tax bills off their federal taxes. That will push many snowbirds to sell homes in the NYC housing market since they can no longer afford the carrying costs. For those who own multi-million dollar properties, the mansion tax that was approved gives them a reason to sell as soon as possible.
10. The Sellers Who Can’t Afford to Wait Any Longer to Sell
We mentioned the softening of the NYC housing market already, especially at the higher end. We brought up the increased amenities being used to fill luxury properties that aren’t being held as an NYC real estate investment. However, many properties may sit on the market for years. This is enabled by a large number of properties not lived in year-round and those who simply don’t want to reduce the price tag of their property to a point lower than what they paid for it. As listings pile up and the ongoing carrying costs like high property taxes rack up, expect to see a wave of sellers who will mark down their New York City real estate to move it because they can’t afford to wait to sell it.
Other Real Estate Investment Opportunities in New York State
Maybe you have done a bit of real estate investing in NYC but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. Prices are relative, and prices are relatively low given New York City’s recent market conditions. During the latest twelve months, New York did cool off. However, the cumulative appreciation rate over the ten years has been 38.81%, which ranks in the top 30% nationwide.
As with any real estate purchase, act wisely. Evaluate the specifics of the NYC housing market at the time you intend to purchase. Hiring a local property management company can help in finding tenants for your investment property in NYC. If it is your first time to invest in NYC real estate, then you would have to be aware of common beginner’s mistakes. Beginners would usually follow the media, buy a property, and wait for its value to increase. This could be risky. Real estate investing requires research. We recommend doing your research or hiring a real estate investment specialist for guidance.
The fact is that New York house prices are not only among the most expensive in New York, but New York real estate also is some of the most expensive in all of the U.S. Since NYC real estate is very expensive for many investors, there are several other areas where you can invest in real estate and we shall be discussing some of them here.
Here is a snapshot that shows the median home values in some of the popular neighborhoods of New York City.
Courtesy: Zillow
Apart from NYC, you can also invest in Buffalo, NY. Ignore the Big Apple and look to west if you want to buy rental real estate in New York. The Buffalo real estate investment offers a surprisingly good deal with low prices and relatively high rental rates. The Buffalo real estate market is dominated by older homes. A majority of homes in the Buffalo housing market were built before World War 2. Interestingly, this also means that there are many small apartment buildings designed to serve a population that rented small units close to their jobs. For example, roughly a third of homes are single-family detached homes, while almost half take the form of small apartment buildings. This creates an excellent opportunity for those in the market for Buffalo rental properties. You could buy a small apartment building with multiple tenants for the cost of a single rental property in a more expensive New York real estate market.
Another real estate market in the state of New York is in Syracuse. Syracuse’s real estate market offers cheaper property with a higher return on investment and less hostile legal climate. It is one of the better choices if you want to invest in New York state. Another issue that factors into the equation is the job market. Lots of cities have a great quality of life but almost no one can afford to live there. The Syracuse housing market ranked 6.3 out of 10 for its job market. That’s better than rural and much of upstate New York. And it is why there is a slow trickle of people moving in to replace those who leave. That’s why the Syracuse real estate market has a net migration of 5 or a stable population. This is in sharp contrast to the depopulation seen in most Rust Belt cities. It also means Syracuse’s real estate investment properties will hold their value for the foreseeable future if they don’t appreciate it.
Albany is another real estate market which is good for investment. Albany is a steadily appreciating real estate market. While it isn’t as famous or hot as NYC, it offers an affordable entry point and a massive pool of perpetual renters. Though it may not be somewhere you want to live, many locals are choosing to stay and make their homes here. And that will continue to drive demand for Albany real estate investment properties as long as they are priced right.
You can also consider Rochester. The Rochester real estate market is stable, offering slow appreciation, affordable properties to outsiders, and good returns. It has strong, long-term potential that is only buoyed if NYC collapses. And this is one of the reasons why being everything the Big Apple isn’t is in your favor. The Rochester real estate market enjoys a healthy population profile. Roughly a quarter of the population consists of children, and many are likely to remain due to the healthy job market. It also means that the Rochester housing market won’t crater if the job market weakens the way San Francisco collapses whenever the tech bubble bursts. Others choose to remain here because of the low cost of living.
Let us know which real estate markets in the United States you consider best for real estate investing!
*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References:
Latest Market Trends and Statistics
https://www.zillow.com/new-york-ny/home-values
https://www.redfin.com/blog/data-center
https://www.realtor.com/realestateandhomes-search/New-York_NY/overview
https://www.neighborhoodscout.com/ny/new-york/real-estate#description
https://www.propertyshark.com/Real-Estate-Reports/2020/05/20/nyc-real-estate-covid19
Foreclosures
https://www.realtytrac.com/statsandtrends/ny/new-york-county/new-york
International buyers
https://ny.curbed.com/2019/2/18/18229286/luxury-nyc-condos-real-estate-report
Why American buyers are replacing foreigners in the luxury market
Softening luxury market
https://www.businessinsider.com/new-york-city-luxury-real-estate-not-selling-penthouse-gimmicks-2019-2
Legislation
https://www.brickunderground.com/blog/2015/01/rent_stabilization_misconceptions
https://www.gsb.stanford.edu/faculty-research/working-papers/effects-rent-control-expansion-tenants-landlords-inequality-evidence
https://www.politico.com/states/new-york/newsletters/politico-new-york-real-estate/2019/04/09/mci-loophole-in-rent-regs-212895
Rules for high rents
https://ny.curbed.com/2019/5/14/18617990/new-york-rent-control-tenants-rights-landlords
https://www.forbes.com/sites/jeffreydorfman/2016/06/16/rent-control-treats-the-symptom-not-the-cause-of-rising-housing-costs
https://www.forbes.com/sites/scott-beyer/2015/04/24/how-ironic-americas-rent-controlled-cities-are-its-least-affordable/#7b7e3e048c62
High rental rates
https://www.trulia.com/research/rent-control-sf-nyc
https://www.rentjungle.com/average-rent-in-new-york-rent-trends
Potential for bargains
https://www.rentjungle.com/average-rent-in-new-york-rent-trends
The Overall Cooling of the Housing Market
https://www.forbes.com/sites/fredpeters/2019/03/12/the-real-estate-market-recovery-and-retreat-in-new-york-city/#3ee366d3100f
Tax law
https://www.cnbc.com/2019/04/01/manhattan-real-estate-sales-fall-for-sixth-straight-quarter.html
Expanding luxury development
https://www.businessinsider.com/nyc-penthouse-expensive-surplus- divided-up-smaller-units-sales 2019-1
https://object.cato.org/sites/cato.org/files/serials/files/regulation/2018/12/regulation-v41n4-2.pdf
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