Queens Real Estate Market 2015 Year in Review
Welcome to our first edition of the “Queens Real Estate Market: Year in Review”. Rather than comparing one month to the previous month and the same month of the previous year, this report will compare one 12 month period (2015) to the previous 12 month period (2014). This will give us a clear picture of what is happening with the Queens real estate market because a 12 month comparison takes into account all four seasons of the real estate market. Therefore, we hope that this report will give you a bit of insight as to what happened in 2015, in comparison to 2014, and what we are predicting for 2016 based on market trends we are seeing.
Absorption Rate: 759 sales/per mo.
Current Available Inventory: 3,538
Month’s Supply: 4.7 Months
Last Month: 5.4 Months
Last year: 6.3 Months
*Month’s supply over 6 months is said to favor buyers, month’s supply below 6 months is said to favor sellers, and month’s supply of 5-6 months is said to be a balanced market.
Interest rates held steady in December as the Federal Reserve’s change to the base rate was anticipated well in advance. Currently, Freddie Mac reports the following figures: 30-year fixed rate, 3.96%; 15-year fixed rate, 3.22%; 5/1-year adjustable rate, 3.06%.
Queens Home Sales
There were 8,444 Queens homes sold in 2015, a decrease of .2% from November and an increase of .6% compared to 2014. So what does this tell us? Well, for most of 2015, we were seeing year over year decreases in home sales, however, in November and December, we saw the first increases in year over year sales. While the increase is minimal, the trend is quite significant. What this tells me is that sales may start slowly trending upward, however, a lot of this speculation will depend on what happens with the interest rates and inventory levels this year. From my perspective, demand is still high, but there still seems to be a shortage of supply for home buyers.
24 Month Home Sale Trends
Queens Home Prices
In 2015, Queens home prices rose 7.7% compared to 2014. That’s a more modest increase than the double digit increases we were seeing in 2013 & 2014. However, this doesn’t tell the whole story because this is a general increase, including all property types. So, to be more specific: Residential home prices in 2015 were up 5.9% compared to 2014. In 2014, residential home prices were up 6.7% compared to 2013 so that can give you a little perspective and trend outlook. As for Condo prices, they were up 9.6% in 2015 (compared to 2014), and were up 1.5% in 2014 (compared to 2013). This was the largest price increase we saw and it is likely due in part to the increase in Condo development in 2015. Lastly, as for Coop prices, they were up 5.6% in 2015 (compared to 2014), and they were up 4.7% in 2014 (compared to 2013). In my opinion, last year reflected a steady increase in Residential and Coop prices that would likely be considered healthy among local economists. The more significant increase in Condo prices may speak to another trend that is harder to predict so we will need to keep an eye on that. Overall, I see a trend away from the extreme home price increases, and a move to more steady and modest home price appreciation in 2016.
*Economists tend to say that a healthy appreciation rate for home prices is one that follows along with general rate of inflation, about 4-5%.
24 Month Home Price Trends
Queens Housing Inventory
There are currently about 3,538 homes for sale in Queens county. That’s down 32% compared to the inventory level at the beginning of 2015. For perspective on that percentage, in January 2015, there were 5,190 homes for sale in Queens, and at this moment, we have 3,538 available. This is a very significant decrease in inventory and most likely the reason why we continue to see home price increases and multiple offer situations on many listings. There is still a feeling of much needed inventory for the demand for homes which continues to outpace the supply of homes hitting the market. In my opinion, the most important factor that can impact inventory will be interest rates, and how much they increase in 2016. Month’s supply at this time is 4.7 months, which means that for most Queens neighborhoods, the market is still in favor of Sellers.
Blog Courtesy of George & Abigail Herrera w/the Queens Home Team at Keller Williams Realty Landmark II.