Not so fast- it’s still a hot market and may be too early to call, but several key indicators were down in May. Average sale prices fell around $10,000 since the month of April to $566,449. Sold-to-list price ratio dropped about half a percentage point to 97%. In fact, this pullback is almost a mirror of February’s numbers, when we were unsure how long the prices would continue to rise.
The total sold volume was down slightly as well, and has been leveling out in general over the past four months. Total sold volume in Staten Island was $189 million in May, down $193 million in April.
Prices are, however, trailing indicators since it often takes several months for deals to close. Days on the market were also down last month. It took a home 82 days to sell on average during May, whereas April’s average home sold in just 74. Last May in 2017, total days on the market averaged 71.
Active Listings At A Two Year High, Sales Not Catching Up
The real crux of the current market, though, may lie in the number of new and active real estate listings. In May, total active listings shot up 14% since April to 1,892. The listing increase since last year is even greater. Active listings are up over 20% since May of 2017, when only 1,569 homes were listed on the market for sale.
New listings were up as well, from 707 in April to 730 in May. This also marks a two-year high. New listings in 2017 peaked last year in June at 702.
Total sold listings were neck-in-neck with May one year ago. Closed sales for May 2018 came in at 334, and 336 during May of 2017. Though it’s hard to believe, year to date sales was even closer. Staten Island has sold exactly one more home this year than the same time this year- 1660 in 2018, 1659 in 2017.
Are Sellers Missing The Boat? A Potential New York City Exodus
Since it’s safe to say the number of closed sales has plateaued, a price pullback makes sense. With little change each month in home purchases it’s hard to imagine prices could be driven up much further. And this could provide much-needed relief for buyers- home prices have climbed around 10% in the past year alone.
On the flip side, the uptick in listings (and subsequent price drops) could mean that sellers, having caught wind of these record-high sale prices, are trying to jump ship all of a sudden. Real estate news in New York City (including these reports we publish monthly) has been touting the fervor for quite some time. Like Bitcoin, the public catches wind of these economic booms and they often jump on opportunities all at once. Once many listings start hitting the market, demand falls. When demand falls, prices fall.
According to US Census data, 1 million people have moved out of the New York City metro area since 2010. Of course, the city has gained many new residents too, and has still gained a net half a million residents since 2010. Staten’s Island’s population has continued to rise as the most affordable borough.
But the amount of New Yorkers who have left already is not insignificant. Even more troubling is buzz over rising living costs that are leading many locals to set their sights elsewhere for the near future. Much of the workforce is retiring in friendlier climates, and the economy has improved in cheaper cities too, with remote work making us less location-dependent than ever. Real estate has been on a maddening climb for a decade now and signs are finally showing that it may begin to unravel.
While these things appear to mark a slowdown a real estate values, we do have to stop short of making this prediction just yet. Last winter, we predicted that real estate prices would hit a ceiling, before jumping over $20,000 in a single month. Real estate fundamentals are a funny thing, but the high number of active listings is just too big to ignore.
It will be interesting to see what the next 6 months bring!