Among the global Covid-19 pandemic and the declining US economy, there are a handful of industries that have seen growth; one of these is the housing market. How is this possible?
The April 2020 US jobs report sighted a staggering unemployment rate of 14.7%. This is the highest rate since the Great Depression with over 20.6 million jobs lost since mid-March. However, according to the National Association of REALTORS® (NAR), home prices have seen strong growth during the second quarter of 2020.
This phenomenon is nothing short of the stars and moons aligning. A combination of low inventory, high demand (fueled by the COVID-19 pandemic), and historically low interest rates has led to the increase in home valuations and sales. In New York, the state mandated social distancing rules have spilled over into the housing sector. People are just afraid to be on top of each other. We have seen an exodus from heavily populated boroughs of Brooklyn, Queens, Manhattan, and Staten Island to the suburbs of Long Island. On my recent listing in Commack, about 60% of the prospective buyers were from Queens.
Nationally, this perfect storm has led to the median price of single-family homes to rise by 4.2% year-over-year to $291,300 during Q2 of 2020. The increase is even more substantial in Nassau and Suffolk Counties. According to the May 2020 Market Update reports, by OneKey™ MLS, Nassau County reported a $585,000 median sales price in May 2020 which was up by 10.4% from $530,000 in May 2019. In Suffolk County, the median sales price in May 2020 was $429,450 which was up 10.1% from $390,000 in May 2019.
It is definitely a seller’s market and buyers are left wondering whether they should buy now or wait until the housing market slows downs and home prices decline. I always tell my clients that in the current market condition, it is a gamble to wait. If home prices come down by 10% in a year but interest rates tick up by one point, the result is basically the same. I welcome you to use one of the readily available mortgage calculators online and run the numbers for yourself; the one at Credit Karma is one of my favorites. My recommendation is to buy what you can comfortably afford and start living your new lifestyle as a proud homeowner.
National Association of REALTORS® (NAR) – https://www.nar.realtor/
OneKey™ MLS – https://www.onekeymls.com/
Credit Karma – https://www.creditkarma.com/calculators/amortization
Real Estate Salesperson
Daniel Gale Sotheby’s International Realty
77 Main St. Northport, NY 11768
c: 516.263.6690 o: 631.754.3400
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This post is sponsored by Daniel Gale Sotheby’s International Realty