A widely-read report documents the recent wild ride in New York's housing market. Or, one might better say, the wild rides in the City's several housing sectors, each in a way its own market. For many homebuyers, home sellers, and City residents generally, the current question may be whether to get in, get out, or simply sit on the sidelines. Which way is the wild ride headed, and how long will the wild ride last?
Factors Influencing the Wild Ride
Before trying to anticipate the trends, first consider what's been driving them. This widely-read report suggests the usual suspects. Interest rates are at historic lows, pushing housing prices higher. Housing inventories in some sectors are also at historic lows, again pushing housing prices higher. The pandemic, thought to have nearly pushed City housing prices off a cliff, turned out not to have done so. Indeed, with the pandemic and its restrictions easing, post-pandemic optimism is pushing prices higher. All three trends pushing prices higher, though, are likely nearing their ends. 2022 may see the same three factors pushing prices lower.
Factors Not Influencing the Wild Ride
The report suggests a few other factors not influencing current trends. We are not likely headed toward a mortgage-driven 2008-style housing market collapse. Lenders have stricter controls. Speculators and unqualified buyers aren't today's significant driving market forces. Prices may be high, even quite high, but they're not necessarily bubble high. They're high because of market fundamentals, not market distortions.
The trends and their factors suggest certain market opportunities. In a low-inventory, low-interest-rate market, high prices give homeowners a good reason to list and sell. Yet buyers can also see opportunities in the current market. Interest rates are very likely to rise and perhaps to rise fairly significantly and sharply. And inventories, though low, are growing. Purchases may no longer have to be over full price, without contingencies. Buyers may be able to proceed more thoughtfully and prudently.
But Risk Knocks with It
Every market, though, carries risk along with reward. Eager homebuyers currently risk buying high or without protective contingencies. Cautious buyers risk buying later at higher mortgage rates. Sellers risk missing a historically hot market with high prices. And those sitting on the sidelines, waiting out the wild ride for calmer times, risk missing a real estate market with historic anomalies. Historic anomalies make for both historic opportunities and historic risks.
Retain Premier Real Estate Counsel
Remember: New York City and its environs don't form a single real estate market. The City and its suburbs are several real estate markets. And each market has its own factors influencing its own trends, with its own risks and rewards. On the current wild real estate market rides, you need expert help identifying your real estate goals. You also need help executing sound plans to achieve them.
Retain premier New York/New Jersey real estate attorney Melvin Monachan to help you evaluate the opportunities and minimize the risks in your residential and commercial real estate transactions. Melvin Monachan assists with closings on New York and New Jersey real property and eviction strategies, and foreclosure defense. Call (347) 389-1682 or go online for an appointment with the industry-focused, relationship-driven Law Offices of Melvin Monachan, PLLC.