Several economic signals show that while Staten Island’s home affordability continues to be a problem, the craze is likely slowing down.
As we touched on in last month’s report, Staten Island home prices show signs of leveling out as of late. The latest median sales figure of $532,000 rose 1.14 percent over last month, a slight increase which is lower than previous months in 2017. The one-year price increase is also down to 8.3 percent, from 10.7 percent in September.
New Staten Island listings rose by an impressive 20.8 percent since this time in 2016. This is more than double September’s new year-to-date listings increase of 9.9 percent. The supply-demand curve will tilt in favor of home buyers if this trend continues.
As New York City’s stronghold for many working families, Staten Island’s real estate market speaks much about the working class economy. With a much different climate on the north and south ends of the island, let’s talk about the market conditions for each.
After much speculation on the development of Staten Island’s North Shore, prices hit a spike in 2016 but have since fallen considerably.
The North Shore’s median sale price over the past 3 months was $399,000, and the record highest sale price in the past year for the entire North Shore was $800,000.
The most plausible explanation is the current state of North Shore development projects, namely The New York Wheel and Empire Outlets shopping center. While initially touted as a boon for the North Shore’s economy, these projects have hit many roadblocks in the past year (no pun intended).
This quick market cooldown comes as the cynicism sets in. Staten Island’s North Shore will not become the next Williamsburg - at least not anytime soon. The initial buzz over gentrification and rising home values is tempered by The Wheel’s stop work order over safety issues and financial investment concerns.
Though both sides of the island experienced an upward price surge in 2016, the South Shore has returned to record highs while the North Shore has not. At $577,000, the South Shore’s median sales price for the past 3 months is nearly $180,000 higher than that of the North Shore. The year’s highest priced home sale here was also nearly double that of the North Shore’s, reaching $1.5 million.
There are a few factors to explain the price differences. North Shore homes are typically of older construction, with smaller lot sizes and square footage. Apartments comprise a much larger market share on the North Shore, and they are less expensive than detached homes and townhouses that dominate the South Shore.
However, hoopla over the New York Wheel and Empire Outlets is probably the biggest factor. When interest piqued on North Shore homes last year, the change in South Shore home prices was more subtle. Less speculation has happened on the South Shore since there are no new major developments taking place.
The best advice for home buyers in this real estate climate is to live within their means. As we learned during the foreclosure crisis during The Great Recession, it is unwise to take out large loans that are difficult to maintain. Financial situations can change overnight, such as sudden loss of income. A savvy buyer may have to downsize. A detached home which cost $400,000 just a few years back could cost $600,000 today, making a townhome the more realistic option for this price.