The Long Island real estate market has seen some turmoil over the past few years. From a near-unprecedented surge to leveling off due to a number of factors, one thing it hasn’t been is consistent. Yet, based on what we know about the market, we can make sense of what’s happening in real estate and reassure both buyers and sellers that the answer to the question, “When is the best time to buy real estate? is yes.
It’s always a good time to invest in real estate as long as expectations have been adjusted to meet market realities. We know that mortgage rates are on the rise, limiting the purchasing power of those looking to invest. It is essential to understand that purchasing power is not an accurate reflection of the real estate market.
So if a buyer was able to afford a monthly payment in 2020 of $4,000 per month, which could have put them in a $600,000 home, that same payment today can only afford that family a $500,000 house. Does this mean the Long Island real estate market is down? No. But that means buyers have to come to terms with that reality.
Looking at closing prices for properties on Long Island, the market is stabilizing. It’s not going the other way, and it’s unlikely to be. The prices don’t go down. They will just stop going up for now.
What we can anticipate will happen, with rising interest rates, it will reduce the number of buyers and the purchasing power of buyers. The result is that it will take longer for a house to sell. This is one of the reasons why it is important to use a professional real estate agent.
People have stopped working from 9am to 5pm in an office and now so many people are working remotely. We saw a surge during the pandemic, but instead of going back to a pre-pandemic structure, things changed permanently. We see it in several ways.
Two things have happened to make real estate do so well during the pandemic and that’s still true. Because we were sheltering and working from home, the mindset was either A: I want to go buy my dream house because if I have to stay home, I want to love my house or B: I I’m sick of this door knob not working so let me fix it and let me paint this room and buy some new furniture.
So that makes a one-bedroom apartment in Forest Hills that makes it easy to get around town much less tolerable than a backyard and home office. It made the landscape of Long Island even more appealing and created this hot market due to the shift in mindset who considers what in a home? What do we want from our homes?
Real estate is still – and always has been – the best investment for people, as long as expectations are kept in check. For those worried that we are about to see a real estate crash like we did in 2004, rest assured that the reasons for the bubble burst do not apply here. Mortgage companies now have higher standards, with more regulations and safeguards to protect buyers.
For residential buyers, real estate should not be seen as an investment, but rather as a higher level in your life. You buy a house. You are not buying stocks. Residential home owners are looking to buy a home to live in because they moved out of their current home, they have a baby on the way, they want to be in a different school district for that child.
Now we’re leveling off from that surge, but it’s still going up. Even this gradual increase that we are seeing now will level off and become much smaller and slower in price improvements. It’s about managing expectations. I think the other thing is when you think from an investment perspective you care about timing and overpaying but that’s not what the residential market is or what it should be .