The conclusion of 2012 paints a promising picture for 2013 and the Queens housing market. Falling inventory levels coupled with record-low mortgage rates, which drive high levels of demand, continue to drive home prices upward.
This pent-up demand is sustaining the market and record-low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales. Anticipated job creation and household formation will continue to fuel confidence growth in the Queens housing market. We expect both sales and prices to once again be higher in 2013.
The biggest impact of tight inventory is upward pressure on home prices, but after values fell below replacement construction costs, prices are still affordable in most of the county. While mortgage rates are expected to stay low for the first half of the year, and home prices still remain affordable for most, there is an urgency to buy now, before home prices increase more significantly.
Housing inventory fell again this month to 6,656 existing Queens NY homes for sale, representing a 9.3-month supply. When inventory supply is above 6 months the market is said to favor buyers, and when inventory supply is below 6 months the market is said to favor sellers.
Mortgage rates hit a record low of 3.35% in January, and are currently at or around 3.38%. NAR President Gary Thomas states that affordability conditions will remain fairly stable, “Although mortgage interest rates should gradually rise as the year progresses, they’re expected to stay below 4% during the first half of the year.” With the uncertainty of when interest rates might rise, there is a sense of urgency to buy now.
Home sales this month were down 9.4% from last month and up 17.7% from year-ago levels to a seasonally adjusted rate of 632 units. Residential 1-3 Family Home sales were up 7.7% from year-ago levels to a seasonally adjusted rate of 350 units; Condo Home sales were up 46.3% from year-ago levels to a seasonally adjusted rate of 79 units; And Coop Home Sales were up 28.5% from year-ago levels to a seasonally adjusted rate of 203 units. The 17.7% year-over-year increase in home sales coupled with shrinking inventory, is a strong sign that the market is recovering.
Queens NY Home Prices
The current median home price rose slightly in December to $359,000, which is 4.1% above this time last year. This marks the fifth consecutive month of year-over-year price gains. Residential 1-3 Family Home prices were up 18.6% from year-ago levels to $510,000; Condo Home prices were up 10.4% from year-ago levels to $360,000; And Coop Home prices were up 1.8% from year-ago levels to $185,000.
Queens NY Pending Home Sales
Pending Home sales this month were up 14.2% from last month and up 17.8% from year-ago levels to a rate of 733 units. Residential 1-3 Family Pending Home sales were actually down 8.5% from year-ago levels to a rate of 367 units; Condo Pending Home sales were up 119% from year-ago levels to a rate of 114 units; And Coop Pending Home Sales were up 49.1% from year-ago levels to a rate of 252 units. The significant increase in year-over-year home sales is another strong sign of the market stability that we have been seeing since last year.
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