As the new year takes shape, we now have more evidence of a real estate slowdown.
In fact, every indicator we have reflects this. For one, average prices have now come back down to essentially where they were three months ago at $581,996. Sold to list price ratio remained under 97% as well at 96.7%.
However, the biggest standout this month was the drop in sales. Not only were January’s sales down from last year at (compared to 353 in January 2018), sales hit their lowest point in more than two years at just 307.
With cumulative days on the market now up to 96, nearly the highest in two years, we can look to new listing data around three months ago to see how those listings performed in January. In October, 605 properties were listed on the market. We can deduce that only half of listed properties are currently selling.
Coming Back Down To Earth
Last June, we were shocked to observe an average sale price increase of $12k over the previous month with the figure hitting $582,633. Well, here we find ourselves back in the same ballpark again. The real estate market has now essentially erased any gains from the past 6 months, where we saw a record-setting high in November of $599,999.
For the entire second half of 2017, prices hovered consistently around $550,000 and didn’t budge much. Looking back on 2018 we definitely had a wild year, and an average price increase of $30,000 is certainly not minor for a 12-month period. Prices are certainly up over last year, but have we hit another point where they settle for awhile?
It seems feasible to think so. This decrease in activity could be explained by the New York Wheel’s failure, a project which drove investor confidence during the past few years even though prices were high. Investors are a driving force in New York’s real estate market- much of their interest has pulled out across the five boroughs.
Our prediction? Prices have fallen back to earth, but softly rather than taking a rocky landing. Home sale prices may fluctuate in the coming months, but probably not drastically. We will likely observe a very steady rise or a flat plateau.