As with plenty of other highly coveted products, real estate is a never-ending game of supply and demand. Over the past couple of years, the New York marketplace has experienced what is known as a Sellers’ Market, which is generally defined by a high demand for real estate with very limited inventory. Coupled with decreasing interest rates and an influx of overseas buyers, this type of scenario causes real estate prices to skyrocket.
“A couple of months ago, Staten Island only had about 600 properties on the market,” said Michael Dukhovny, CEO of United National Realty. “My agents could not list homes quickly enough. We experienced plenty of multiple-offer situations on properties, and frequently closed homes at above asking price.”
Lately, however, the market seems to be shifting into a Buyers’ Market as prices slowly begin to dip, interest rates inch up, and overseas buyers are being more stringently controlled by new laws. There are currently over 1,500 properties available in Staten Island, more than doubling in only a few short months as homeowners scramble to list their homes and catch the final wave of the Sellers’ Market. Even so, it is evident to anyone closely keeping an eye on the market, that prices are adjusting.
“As sellers rush to list their homes, naturally buyers have more options to choose from so prices inevitably begin to dip,” said Mr. Dukhovny. “Interest rates have slowly started to inch up and that causes the prices of properties to fall as well. Another interesting thing that many people don’t know about is what is happening with the Asian market. We have had a surplus of very strong Asian buyers in recent years, many of whom bought properties for cash. While China has a monthly cap on funds that could be transferred overseas, many people realized that there was a loophole to the laws. Hong Kong did not have a limit on the amount of money that could be funneled out of the country so people would transfer their money to Hong Kong, and from there to the United States. As of the end of June, this loophole was eradicated, and a cap also placed on the funds that can be transferred out of Hong Kong.”
How will these simultaneously occurring variables effect the real estate market? Prices will continue to fall at a steady rate for the next couple of years, making it an ideal time for people looking to buy a home. Working with professional real estate agents and brokers will make the task of monitoring the flow of the market place a simpler process and reduce the uncertainties many people experience. It is always wise to be an educated consumer and plan what may very well be the largest transaction of your life with professionals who understand the market and will help guide you in the right direction.