Based on rising inventory over the last several months, we had to assume that prices would eventually fall along with demand. Well it finally happened!
And it’s significant. While small price fluctuations are normal and not indicative of a consistent trend, the average sale price in the month of August fell more than $25,000 to $559,874. This is the biggest one-month price drop in almost two years.
Somewhat curious though is the fact that days on the market fell to what also happened to be a two year low. Homes took just 65 days on average before they were sold. This is more in line with 2017 when homes sold in 69 days during September, and the market was hotter than it is now.
What this could mean is that Staten Island homes are still in high demand- just not all of them. The luxury market (ie. those above $800,000) seems to be cooling off. More affordable domiciles (ie. under $550,000) typically see a lot more bids.
However, the affordability factor alone does not dictate the interest level in a home. We cannot paint this entire island with broad strokes. It’s all about the neighborhood. More specifically, the neighborhood’s buyer demographic.
A Tale Of Two Markets
When we examine home sales data in the New York Metro area, two very different markets emerge: Neighborhoods which are sought after by foreign investors, and those that aren’t.
In Staten Island, many of those neighborhoods in the former category are earn their spot by proximity to the Verrazano-Narrows Bridge. Areas like Midland Beach, New Dorp, Dongan Hills, and Fort Wadsworth attract high numbers of bids, which drive up the prices in these areas. Other neighborhoods along I-278 get similar enthusiasm, particularly Westerleigh, Bulls Head, and Sunnyside.
While the foreign investor market is white hot, the rest of Staten Island is more tepid or even downright cool. Prices are still high, or in some cases rising hire, in the neighborhoods with quick Brooklyn access. But in neighborhoods outside of their purview, interest has fallen and prices are beginning to fall.
Homes listed for sale in neighborhoods like Eltingville and Arden Heights are experiencing more price reductions and longer days on the market, according to our agents. The South Shore seems to be more adversely affected by this than the North Shore.
However, interest has certainly fallen in St. George, New Brighton, Tompkinsville neighborhoods as well. The hoopla and subsequent disappointment over the New York Wheel has caused buyers to pull out in those areas closest to the Staten Island Ferry, where prices were increasing sharply just a year ago.
So where can we expect prices to head in the coming months? Look at two different metrics. First, the sold price activity over the last 12 months versus those same 12 months the year prior. Home sale prices were virtually the same 12 months prior in August 2017, when the average home sold for $560,481. We have seen spikes but they eventually corrected themselves. When examining the prior 12 months, the average sale price increased by about $50,000. So while at the beginning of 2017 prices were on the rise, it has become clear that they have been pulling back. Not falling necessarily, but stabilizing.
The second factor is active listings. Higher active listings mean slower demand and lower offers. Four months in a row now, active listings remain at an all-time high. In January, active listings hit a 12 month low. In the coming months, prices rose as those listings hit the closing table. So if active listings flatten, we can expect sale prices to as well.