Spring and summer are usually some of the busiest seasons for the Long Island housing market. When the weather warms up and the school year draws to an end, many people make plans to move, whether it’s purchasing their dream home on the water, downsizing to a smaller property, or relocating to or from Long Island.
Rising interest rates and some economic uncertainty have continued to put stress on the housing market across the country. Q4 of 2022 presented a notable shift in a real estate market that had been red hot for months on end. On Long Island, this shift has created a particularly tight market with few properties available for purchase. Current interest rates sit at about 6.5% for a 30-year fixed-rate loan. Many homeowners however have a 2.5-3% interest rate on their property, owing to nearly a decade of low rates. For people who don’t absolutely have to move, today’s rates are definitely curbing home sales.
So, what can you expect from the Long Island housing market this summer? Here are our predictions of what the landscape will look like for both buyers and sellers.
Buyers Will Face a Competitive Market
Inflation is slowing down, which is the good news. However, the Fed isn’t expected to dial back its efforts to balance the economy. For home buyers, don’t expect interest rates to drop significantly, or at all, this summer. Six and seven percent interest rates appear to be the new normal. That means home buyers today have less buying power than they did a year ago. There are also fewer homes available at every price point. Multiple offer scenarios are possible for well-priced homes in the most desirable neighborhoods on Long Island.
Don’t let this scare you out of making a move though. We believe in educating our clients about the realities of the market and the potential challenges they’ll face. Now more than ever, who you work with matters. At the Pesce & Lanzillotta Team, we continue to set sales records and successfully close homes. We represent both buyers and sellers and know how to help you get to the finish line no matter the market.
Sellers Will Need to Make Choices
If you’ve been thinking of selling your Long Island home and purchasing something else, the reality is that you probably have a better interest rate on your current home. That said, there are still advantages to listing your home in today’s market.
First, buyer demand remains strong. We saw many buyers come back to the market at the tail end of winter and with few homes available, many serious buyers still haven’t purchased. Second, while home prices have decreased somewhat from last year at this time, they haven’t dropped significantly. If demand holds steady, home prices will likely hold steady as well. Long Island home prices may even rise as buyers compete for the few homes that are available. Third, you may have the option to use some of your equity and buy down the rate on your new home loan. This is a strategy available from some lenders and may be a great option for you. We can introduce you to a great lender to discuss – just reach out to us here. Fourth, Long Island traditionally experiences a “second wave of real estate” after Labor Day. While most markets around the country wind down significantly at the end of summer, we often see a spike in purchases and sales at the beginning of fall. If you’re not ready to list right now, selling later in the summer could still yield great results.
We would love to share what our team does differently to help our clients achieve their goals whether buying or selling a home on Long Island. Get in touch with us today to take the next steps!