Long Island Real Estate: What Was in 2013 and What Will Be in 2014
Who could have ever predicted that Long Island would have seen near 70º temperatures in December then bring the New Year in with a blizzard and below zero temperatures when you factor in the wind chill? We are becoming conditioned lately to expect the unexpected.
Thankfully, 2013 brought us some more predictability in the real estate world than previous years have. Many, myself included, believed that 2013 would be a year of stabilization and growth. Here on Long Island, it was a year to rebuild what Sandy destroyed. She struck with unprecedented force and left unimaginable destruction behind. But even Superstorm Sandy was no match for the resolve and sense of community Long Islanders, Strong Islanders, possess. 2013 proved that. People moved back into their homes. Fire Island had a record-breaking summer. And folks were boating and beaching all over the South Shore. While it’s true that not everyone has fully recovered and there are still many questions yet unanswered, this I can predict with 100% certainty; we will overcome these challenges together and become even stronger for it. We always do.
And as predicted, the national housing market is in a state of rebuilding, too. According to National Association of REALTORS® (NAR), homes on the market (inventory) was up 5% nationally in 2013 while the percentage of those available homes that were short sales and foreclosures (distress sales) were down to 14% from 22% the previous year. Here on Long Island, we are seeing something else. Here, we are experiencing a scarcity of inventory with our shadow inventory dropping to 10 months supply in 2013 from 15 months in 2012 with higher than national average being distressed inventory. However, the reason for the elevated number of distressed properties has more to do with housing legalities in New York than the economy itself.
Nationwide, NAR said the number of existing home sales was down 1.2% in 2013 yet the median home price was up 9.4% nationally. Again, our local numbers are a bit different. Suffolk’s median home price is up 1.25% from $314,500 to $318,500. Why are Suffolk’s numbers so different than the national figures? Our part of the country, thankfully, did not suffer the deep plummet that many parts of the country did so our bounce back numbers are going to be less dramatic as well. Also different, Suffolk’s number of existing home sales went up nearly 1% in 2013. This is consistent with our steadily depleting shadow inventory – buyers are buying!
With mortgage experts and economists agreeing that 2014 will be the year that interest rates will significantly rise -- most saying we’ll see 5% rates soon, some predicting rates will be as high as 6% by the end of the year -- there will be a BUY NOW urgency in the marketplace. We are already experiencing a shortage of inventory on Long Island, the increased demand will reduce that shadow inventory further and might even rapidly drive up home prices…something that the fence-sitting buyers were not expecting.
The bottom line:
- If you are thinking of BUYING a home, do it NOW while interest rates are still very low and home prices continue to be reasonable. You will never get more bang for your buck than right now.
- If you are thinking of SELLING your house, do it NOW while serious, qualified buyers are competing to purchase a home before the market changes again. If interest rates go up tomorrow, you might lose today’s qualified buyer.
- Either way, it is important that you ACT NOW. Whether you are selling or buying, it is crucial that you hire a true real estate expert whom you trust and who has a deep understanding of market trends so the unpredictable suddenly isn’t…and you can get the most the market has to offer.
Much happiness, health and prosperity to you in 2014!
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