New York Real Estate Market: Predictions for 2024?

The median home price in New York was $518,800 in January 2024. Quite close to the last year’s $488,200.

Yet 37.3% of homes sold for more than the list price in the Empire State. Shocking, eh? Given that the number of homes listed on the market increased by 5.9% YoY from 10,003 to 10,597 homes.

There are only 3 months of supply left! Does the scarcity of houses make New York a seller’s market? Let’s look at the facts.

Niagra Falls sold for a median sale price of $150,000 in January, up to a 50% increase year-over-year. Homes in Brighton sold for a median sale price of $443,000, a 47.7% increase year-over-year. There were a few markets, especially New York City where prices declined year-over-year.

Interest rates are at record highs, with few home buyers. But the inventory is so low that 37.30% of homes sold above the list price!

• If You Are a Home Buyer: You can avoid bidding wars and avail seller concessions if you buy a home now. The 7.28% interest rate and mortgage payments are significant, but rates are unlikely to drop in the next few months. If they do, you can refi.
• If You Are a Home Seller: You can lock in New York’s high home prices. The scarcity of homes in NY makes it a seller’s market. Homes listed on MLS sell faster and for 17.5% more than off-MLS homes. That could be thousands of dollars in additional proceeds if you sell via Houzeo.

The current New York real estate market statistics reflect the national trend of high demand and low supply. Despite the strong housing demand, home sales tanked. The property prices in New York have increased regardless.

So, How Is the Real Estate Market in New York?

Sluggish! Home values in New York rose by 5.7% in the last 5 years, at an average of ~$700,000.

But, home sales decreased by 3.2% in January 2024 YoY. Maybe due to the mortgage rate climbing to a two-decade high of nearly 8%! The number of houses for sale in NY was 37,803 in the month, 12.6% less than in 2023. New York’s housing market is bearish.

The decrease in home sales can be attributed to not having enough properties in the Empire State. The months of supply is 3 months, which makes NY a seller’s market. So, if you want to sell a New York property, now is the right time to list it on MLS.

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New York Real Estate Market Statistics

• Average Home Prices: The average median home price in New York is $518,800, up by 6.3% YoY. In 2024, the median sale price will keep increasing marginally due to NY’s tight inventory. The sale-to-list price ratio is at 99.80%, with an increase of 0.2 pt YoY compared to January 2023.
• Home Sales: As per January 2024 data, home sales decreased by 3.2% YoY! In January 2024, only 8,708 homes were sold, down from 8,997 in January 2023.
• Average Rent Prices: Rental costs vary statewide. An average tenant in Buffalo pays $1,285, while a person living in Rochester pays $1,371.
• Median Days on Market: The median days on the market for homes for sale was 45 days, down 1 day YoY.
• Pending Sales: The number of homes for sale declined by 12.6% YoY compared to 2023. Currently, there are 37,803 homes for sale in New York.
• Months of Supply: The average month of supply is 3 months. NY’s demand can’t be satiated with the low supply. NY’s house scarcity is worse than the national housing market.

New York Housing Market Predictions 2024

New Yorkers have survived the shockwaves of skyrocketing mortgage rates and rising home prices of 2023. Here’s what we predict for New York’s housing market:

1. Home Sellers Will Return to the Market in 2024: Sellers who chose the sidelines in 2023 will come back. Especially those who can’t avoid new jobs or want to move to a cheap place. Whitney, the analyst who predicted the 2008 financial crisis accurately, has forecasted that baby boomers looking to downsize will also add up to 30 million housing units. Yowaza!
2. Mortgage Interest Rates Will Stabilize by the 2nd Half of 2024: Mortgage rates hit 7.79% in October 2023, the highest level in 23 years. However, the rate dropped to 7.35% in January due to the softening labor market and slowing economy. Even the annual inflation rate went from 3.7% to 3.2%. We think the rates will remain above 6%, but they will stabilize in the second half.
3. The Number of Home Buyers Will Rise: The historically high interest rates averted buyers in 2023. But mortgage demand rose after the interest rates lowered to 7.35% in November. The easing inflation and stabilizing rates will bring back house hunters.
4. Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across NY YoY, reaching $519K in January 2024. Experts predict home prices will continue to rise until the low supply-high demand dynamic changes.
5. New Home Constructions Sales Will Increase: 12.3% of homes purchased in September were new homes, the highest since 2022. Home builders offered $30,000 worth of concessions to attract buyers in 2023. We think builders and sellers will compete for buyers in 2024.
6. iBuyers Will Continue to Make Lowball Offers: iBuyers offered 104.1% of market value in 2021. They offered 86% in 2022 and around 70% in 2023. Opendoor and Offerpad have lost billions of dollars in 2023. As they struggle to survive, they will make lowball offers.

Bonus Prediction: Buyer Broker Commissions Will Be Negotiable!

In a shocking turn of events, the jury in Missouri awarded more than $5 billion in damages to the Sitzer-Burnett plaintiffs. This motivated nationwide home sellers to file grievances against NAR’s Cooperative Compensation Rule.

NAR’s Cooperative Compensation Rule or Participation Rule states that listing brokers must offer competitive compensation to buyer agents if they want to list properties on a NAR-affiliated MLS.

Lawsuits like Moehrl, Gibson, Batton, Nosalek, and Batton 2 challenge the Participation Rule. They accuse NAR and other top real estate companies of colluding and conspiring to keep agent commissions high.

If the jury also finds the defendants guilty in these cases, buyer agent compensation may change. Buyer agents may become obsolete by 2025! Phew.

While buyer agents are unlikely to be obsolete in 2024, they may be open to negotiating commissions. That’s probably how they will still have some skin in the game.

When Will the Housing Market Crash in New York?

Even though Americans are moving out of the Empire State, a housing market crash in New York is unlikely.

New York stands as the 4th cleanest city in the US, with a cleanliness score of 5.86 out of 10. New York’s economic strength further bolsters its stability. With an unemployment rate of just 4.5% as of January 2024, New York boasts a thriving job market.

Additionally, New York ranks 17th in the US in terms of having an affordable average cost of living of $5,989 per month. The median household income is $127,100, making it an enticing destination for homebuyers.

The state has a population of ~19.7 million. A consistent population growth rate of 0.37% in 2023, coupled with its diversity, creates a solid foundation for continued housing demand. So, it is unlikely that New York’s housing market will crash anytime soon.

2024: Is It a Buyer’s or Seller’s Market?

2024 will be a terrific market for sellers. (And buyers, too!)

Home prices in New York are rising and will continue to rise till the supply-demand dynamic changes. The number of houses for sale in NY was 37,803 in January 2024. There is very limited inventory to satiate the demand from house hunters. This also makes it the best time to sell a house in New York.

After the mortgage rate plummeted from a two-decade-high rate of 8% to 7.28% in January, new listings rose. This shows that those who refused to sell due to mortgage rate lock are finally acclimatizing to 7% rates. In the coming Spring of 2024, more homeowners will follow suit and list properties on New York MLS.

As home listings in New York increase, home shoppers hugging the sidelines will also return. The recent uptick in mortgage applications shows that buyers are returning.

House hunters who could not find affordable homes in 2023 will also start shopping in 2024. The demand for New York houses will increase – and that’s why sellers may be able to dominate the market.

However, new builds will compete for attention from buyers. Home builders have persuaded buyers to buy new construction homes with mortgage buydowns worth $30K in 2023! Builders will continue offering concessions in 2024, and home sellers may have to wage wars against them.

Listings of new constructions, baby boomers looking to downsize, and desperate home sellers will flood the market in 2024. The properties for sale in New York will increase. So, whether you are looking for a condo in Newark or seeking to live in a co-op, you will find your dream home next spring.

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

Frequently Asked Questions About New York Real Estate Market

New York Real Estate Market