Real Estate, Finance Experts Predict Impacts of Rate Hikes and Return-to-Work on NYC Housing Market
Real Estate In-Depth | September 28, 2022
WHITE PLAINS—The Hudson Gateway Association of Realtors, Inc. and OneKey MLS recently hosted a virtual panel discussion where financial and real estate experts explored the impacts of rising interest rates and return-to-work orders on the New York City housing market in the fourth quarter of 2022. Panelists agreed home buyers may want to move sooner rather than later, increased rental demand and pricing could make buying the smarter choice, and workers will commute farther when it’s fewer times per week.
Richard Haggerty, CEO of HGAR and president and chief strategic growth officer of OneKey MLS, the regional multiple listing service for New York, opened with a market update. He cited OneKey MLS regional data comparing this past August to August 2021 that showed declines in the number of residential transactions in the Hudson Valley – including 8.5% in Westchester and 16.7% in Rockland County – a 12.5% drop in Suffolk County, while sales rose 6% in both the Bronx and Queens.
“However, if you compare 2022 to 2019, we are above those numbers consistently across the board,” Haggerty said. “It’s a case of trying to find that middle ground, to compare it to what used to be a ‘normal market’ versus the pandemic year of 2020, where we still had a strong year, and the boom year of 2021. That’s the challenge we’re going to continue to have.”
Haggerty added that 2022’s median sales prices are up across the market, over 2021.
“Getting the Deal Done in New York: Taking Stock—What’s in Store for Q4” featured Doreen Courtright, licensed associate real estate broker, Douglas Elliman Real Estate; Marissa S. Tracey, managing director, relationship management, First Republic Bank; and Jonathan Miller, president and CEO, Miller Samuel Inc. The event was moderated by Brian D. Tormey, NTP, president of TitleVest, a leading NYC-based provider of title insurance and related real estate services.
The panel weighed in on the Federal Reserve’s recent 0.75 percentage point rate hike, and explained it is intended to be aggressive in the short term, through the next few months. While rates are not expected to continue to increase over the long term, buyers may want to consider making a move now before the rates rise again in the fourth quarter.
Courtright, of Douglas Elliman Real Estate, says she’s seeing demand increase for rentals. “Manhattan is still a place people want to be, especially younger people who have graduated in the past couple of years and have been living with their parents. They’re looking to rent in the city,” she said.
But the inventory is still low, which puts pressure on pricing. “Right now, there is between four and five months’ supply, while in a normal market we typically have more like eight months’ supply,” said Courtright. She said brokers are constantly fishing to find out who has inventory that’s not yet listed and predicts that prices will continue to increase.
When thinking about renting versus buying, the panel advised those searching for a home to review the numbers and calculate what your amortization monthly payment would be with a mortgage. Buying in this climate may be more cost-effective than renting, and if rates come down in two years there’s always the option to refinance.
Courtright agreed, “You can either pay your mortgage or pay someone else’s.”
Miller, of Miller Samuel Inc. pointed out that the pandemic has changed the former norms of living and working in the city. “I don’t think we’ll go back to five days a week since there was such a long, sustained period of time where people got used to new working habits,” he said. “Because people are working in the office only a few days a week, they’re willing to do a longer commute, which has implications for the housing market.”
For more, view the webinar here.
“Getting the Deal Done” is part of the “Be Your Best” webinar series created by HGAR and OneKey MLS, to help Realtors and agents navigate a changing landscape amid the pandemic. The event was sponsored by TitleVest.