While real estate “gurus” are anticipating a downward spiral for the Long Island housing market, we should be looking at the data for ourselves. The truth is, the Long Island housing market may very well be on the rise.
As prices in New York City continue to skyrocket, more and more buyers are looking to Long Island where they are being met with an ever-shortening supply of housing. Additionally, the L train shutdown is driving even more buyers to look elsewhere, and Long Island is amongst the most popular places for them to begin their search. This is all convincing, but it takes a bit more digging to see the full picture. Let’s take a look.
First of all, let’s face the facts –– taxes, as well as home prices continue to rise in Long Island. These truths absolutely have an adverse effect on people’s inclination to buy in Long Island, especially when it comes to younger buyers who place a greater emphasis on affordability.
A Seller’s Market
As you already know, there are two parties to consider when talking real estate: the buyers and the sellers. Well, for sellers, the Long Island real estate market is booming. In Nassau County, the home value median sits at $512,900 with home values rising by 5.6 percent in the past year alone. According to Zillow predictions (which are subjective of course), that median will continue to rise by another 1.9 percent in the next year.
On a rental scale, the Long Island real estate market beats out New York Metro. While the median monthly rent for the New York Metro is $3,000, it sits at roughly $3,100 per month for Nassau County (Long Island).
Hope for Buyers
While all the glory seems to be tied up in the seller’s favor (which, let’s face it, a majority of it is), there is hope for buyers in the Long Island real estate market as well. However, it doesn’t come in the form of lower prices and tax rates.
Where buyers can win in the Long Island real estate market is with interest rates. Since the beginning of the year, the average 30-year fixed mortgage rate has dropped from 5 percent to a little over 4 percent by mid-2019. This doesn’t seem like an impactful decrease, but it is definitely a huge benefit in the long run. In fact, a 1 percent drop in mortgage rate results in approximately a $40,000 increase in home purchasing power for buyers.
For the buyer who is looking to eventually sell or rent in Long Island, right now is a promising time to buy as well. As mentioned earlier, the price of real estate in the Long Island area has been rising rather rapidly, more specifically to the tune of a 5.6 percent increase in the past year alone. For the investor looking to scoop up some profitable property, Long Island may be a great place to prospect for a new investment property soon.
If you purchase real estate now, you can enjoy a market that is only expected to rise. Considering you play your cards right, this can result in a handsome profit machine either in the form of a buy-and-flip or a long-term rental property.
by Peter Manley