As the year winds down, most people tend to start thinking about the new year and what it might bring for them. It’s also a time when we set new goals for ourselves whether it’s losing weight, finding a better work-life balance, or even major life decisions like starting a family or buying a new home. In terms of the latter, people rely on market data to help with the decision-making process when it comes to buying or selling. While no one can offer a definitive outlook on the future of the NYC real estate market, you can always count on analysts’ predictions to give you a sense of what to anticipate. StreetEasy prepared a list of predictions for NYC real estate in 2023. Here are a few worth noting:
Home prices will drop but not significantly: Mortgage rates are expected to remain high in 2023 which may slow down buyer demand, pushing sellers to reduce their asking price. However, sellers may also be withdrawing their listings from the market to avoid forfeiting the low rates they locked in when they were at an all-time low. Therefore, we may not see anything significant in the way of discounts or negotiating power.
Homeowners will be better prepared for a possible recession: Given the significant drop in home prices month after month from the spring of 2020 through the summer of 2021—due to the pandemic—chances are most people would not be forced into foreclosure due to negative equity if we were to go into a recession. Added to this, only 0.4% of borrowers in the greater NYC area are currently in negative equity positions, so most homeowners should be able to withstand an economic downturn if we somehow end up in a recession.
The city will continue to attract new residents: StreetEasy search data suggests that interest to move to the city from potential residents living outside of New York has nearly doubled since pre-pandemic. While affordability has always been a deterrent, NYC’s economic recovery—which has proven more than positive with job growth up 97%—has most likely played a role in this possible influx of new residents.
While predictions should be taken for what they are—speculation at best, this at least offers some visibility into how things may unfold. If you’re already beginning to map out your real estate goals for 2023 and would like to talk, please reach out. I am happy to jump on a call with no obligation to work with me.