Do you want to buy a new home or an investment property in New York City? Or are you considering selling your current one? Recognized by Time Out Magazine as the number one place to live even ahead of cities such as Tokyo and Paris, New York City has always been – and continues to be – a highly desired city for the wealth of cultural, artsy, sporting, and shopping options available to residents and tourists. However, it can help to know how the market is doing if you are contemplating navigating the real estate process. Read on to find out about current and future trends, how the New York real estate market is performing, and what is likely to happen in 2023!
1. The New York Real Estate Market
In mid-2022, the New York real estate market – along with many other major US metropolitan cities – started to show signs of cooling down. From Greenwich Village to Soho, there were massive price reductions, fewer bidding wars, and increased inventory. Despite New York City being extremely desired, the real estate market still showed signs of cooling down. After years of a hectic seller’s market during the pandemic, it is only natural that the market starts to slow down as it cannot sustain itself in the long term. Another reason for the cooling down of the market is the rising inflation and subsequently rising prices, which has caused some buyers to be priced out of many New York City homes. In addition, the federal mortgage interest rate is now at nearly 7% for a 30-year mortgage. All of these factors have contributed toward the current climate turning from a strong seller’s market to what is now more favorable for buyers.
The real estate market in New York City is changing. The median price for all home types in New York City is $851,227, with many selling for well above the million-dollar price point. However, some neighborhoods in New York City have considerably higher median prices. For example, the median price for Soho real estate is 2.2 million dollars, with many luxury homes priced well above that figure. As for West Village homes for sale, the median price is only 1.3 million dollars. However, both Soho and West Village experienced an 8% increase in median home prices year-to-date. Despite these small increases, the prices have been steady, with some dips over the past few years. This indicates that it is likely that this steady trajectory of prices will continue for the better part of 2023 as the market continues to recover from the dramatic effects of the pandemic.
2. Outlook for 2023
In 2023, New York City will likely experience continued slight home price decreases as it recovers from the pandemic. However, the limited inventory will cause many home prices to be driven up as many first-time home buyers and investors compete for the few homes available. Another factor contributing to home prices is the increasing inflation and federal mortgage rates. This will lead to still more home buyers being priced out of the New York real estate market altogether. Some buyers might be hesitant to buy now while the market is so volatile and may wish to adopt a wait-and-see approach.
As for the appreciation rates, those are likely to decrease as well. However, the decrease is likely to be slight at around 15%. Despite the likely decrease in home values, one sure thing is that homes will continue to appreciate again. The city of New York has experienced a 197% appreciation rate over the past two decades, rising at nearly 5% annually. With these numbers, homes in New York City will likely continue to appreciate, despite the decrease in home values expected in 2023.
3. What’s Next for Buyers?
If you need to relocate and find a first or a new home in New York City, you might be able to get a great deal on a home. However, with the rising inflation and interest rates, certain homes might be out of your budget. That is why it can be helpful to have a plan of action in navigating this extraordinarily challenging and volatile market. First, consider getting pre-approved for a jumbo mortgage loan so that you know how much you can spend on your new home. In addition to drastically streamlining the homebuying process, you can begin searching for luxury West Village homes for sale or anywhere in New York City within your allotted price range. You should next work with an experienced real estate agent who has experience navigating the New York real estate market many times. A real estate agent who is excellent at matching must-haves with homes can help you find the perfect New York property to begin the next stage of your life!
4. What’s Next for Sellers?
Those contemplating selling their property in 2023 might be able to capitalize on the current environment. Fueled by the increasing inflation and federal mortgage rates, home prices are higher than they were at the pandemic's peak. Furthermore, inventory is still tight, and many interested buyers are seeking to invest in Soho real estate or any other New York City property. This creates a situation where it is ideal for homeowners to sell their current properties. Since the prices are higher, sellers will likely get maximum dollars for their highly-prized New York City properties. Some buyers are willing to give the necessary funds to invest in a small piece of New York real estate, particularly for luxury properties in New York City. If you are interested in selling your home in New York City, you should work with a real estate agent. A real estate agent can help you stage, market, and list your home so it can sell for top dollar!
Interested in buying or selling a home in New York City? Then, you need to schedule a consultation with real estate agent Andrew Azoulay who can provide expert guidance on everything from negotiation tactics to marketing strategies. Whether you wish to find your dream home, an income-producing property, or sell one, Andrew can help you achieve all your real estate dreams!
