The pace of home sales continued to slow in July according to the Long Island Board of Realtors. July marked the highest year over year decrease in home sales this year at 11%. In other words, last July there were 736 home sales in Queens, while only 655 homes were sold this July. With that said, we have seen that buyers are getting stimulated to enter the market due to the trend of slowly increasing interest rates. Prices on the other hand, continued to rise in July, exacerbated by inventories failure to keep pace with the rising demand across Queens county. As rates rise they will likely continue to push buyers into the market in the near term; however, higher rates will eventually slow demand as affordability is reduced.
Month’s Supply: 6.9 Months
Last Month: 7 Months
Last year: 8.4 Months
*Month’s supply over 6 months is said to favor buyers, month’s supply below 6 months is said to favor sellers, and month’s supply of 5-6 months is said to be a balanced market.
Homes sold at a seasonally adjusted annual rate of 655 homes in July, down 5.1% from June and down 11% from the same month of the previous year. July was the second highest year over year decrease we have seen for home sales since August of last year. Indicators show August will likely be a strong month due to a rise in buyer activity as a result of the slow increase in interest rates; however, they point to the sales continuing to slow because inventory has not been able to keep up with demand, and the rise of interest rates will affect affordability, which ultimately leads to less home sales. Specifically, Residential home sales are down 5.2%, Condo sales are down 2%, and Coop sales are down 21.1% compared to July of last year. Over the last 12 months, sales are 4.7%.
Home prices increased once again in July to a median price of $420,000. The rate at which prices are increasing appears to still be increasing with July showing a year-over-year increase in prices of 9.1% and a monthly increase of 7.4%. Over the last 12 months, prices are up 9.3% which is higher than the 4-5% that is considered a healthy market. Specifically, Residential home prices are up 8.9%, Condo prices are up 8.7%, and Coop prices are up 2.3% compared to July of last year.
There were essentially the same number of homes for sale in July as there were last month, however, demand continues to grow at a faster rate. At the moment, we have 4,482 homes for sale in Queens, while last month there were 4,333. This led to the months of supply of inventory, which measures the relationship between supply and demand, to drop slightly to 6.9 months in July. This number remains tight as low interest rates spur more buyers to enter the market, and new home construction has not yet reached a pace which would provide significant relief to many of the County’s hotter markets.
Blog Courtesy of George & Abigail Herrera w/the Queens Home Team at Keller Williams Realty Landmark II.