Best and Final in New York Rental Market
So, what’s going on in New York City? We’ve talked about how the housing market has stayed strong as a serious seller’s market in the past year, and we’ve touched on NYC specifically being extra frenetic, as apartments sell in 24 hours and renters offer extra money to secure a lease. In fact, data from StreetEasy showed that Manhattan rents are up 36% year over year, and rents are up 15% in Brooklyn and Queens.
Experts predicted that things would slow down as we got further into 2022, but if the numbers are any indication (and they should be), that doesn’t quite seem to be the case…yet.
Here’s what’s happening in NYC:
There Is Finally More Housing Available
We predicted that prices would slowly stabilize as more inventory became available, and in March this plan started to set into motion. Last month was the first month in over a year where new listings in New York have exceeded those put into contract or sold. While some say this will eventually cause prices to stabilize and the market to cool down, that’s not the case yet, and it’s due to interest rates. The Federal Reserve has clued us in on its plans to raise interest rates at every one of its 2022 meetings, so buyers are trying to purchase their property before the potential rise in rates. While this hasn’t led to the Black Friday-like craziness we saw this time last year, New York is still quite hot.
But Something Major Changed…And Experts Predict A Slow Down
Speaking of interest rates, the average 30-year fixed mortgage rate topped 4.67% at the end of March (up from 3.11% in December). This means some homebuyers may reconsider (or be eliminated from) buying property, and some borrowers will no longer be able to qualify for a mortgage. Translation: there will be less potential buyers, whether by their choice or by the banks. It’s unclear just how much this will affect the market, but many experts, such as the CoreLogic real estate research firm, predict that home price growth is about to decelerate by a lot. Specifically, CoreLogic predicts that home prices will rise just 5% in the next year, compared to the 19.2% increase we saw last year.
What’s The Final Word?
It seems that things haven’t slowed down just yet, and while experts predict that they will eventually due to rising interest rates and an increase in available properties, that doesn’t seem like it’s happening this quarter. If you’re looking to buy or rent in the big apple this year, good luck (you’ll probably need it). If you’re looking to sell, now is as great a time as ever.