Real estate watchers say New York’s median real estate price may reach over $600,000 by 2030. Ready to invest in New York real estate? Find a lender here.
New York City may overshadow New York, but the state is more than just the city that shares its name. The state offers various real estate opportunities, from rural farms to single-family homes, condominiums and co-ops. From the majestic forests of the Adirondacks to the dunes of the Hamptons, New York is rich in scenic beauty and the allure of being home to one of the most exciting cities in the world.
According to census data, New York State has over 20 million residents and over 8.8 million in the New York City metropolitan area. That means New York City has an outsized impact on the state. How might the New York real estate market fare going forward?
Current Overview Of New York Real Estate
Buying a home in New York can be challenging. New York City remains the most expensive market in New York State, with average home prices exceeding $800,000 in many areas, including Manhattan, Brooklyn and Queens. Homes in Brooklyn and Queens offer a mix of luxury and more affordable housing. These areas have seen strong price appreciation in recent years as people spread out from Manhattan searching for housing.
Long Island continues to see high demand, particularly in affluent areas like Nassau County and Suffolk County, where prices are elevated but offer more space than urban settings. Homes in the Hamptons have achieved record prices in recent years as the luxury real estate market shows strength. Buyers in these affluent areas may be less interest-rate sensitive because they will likely be paying cash or putting down a significant down payment.
According to Redfin, the state's median price was $549,300 as of August 2024. That is above the median national price and up 2.8% year over year. This number reflects a large divide between the very expensive parts of the state, where homes routinely sell for millions of dollars and areas like the state capital of Albany, where the median price is $249,000, making it highly affordable, if not as fast-growing.
Factors Influencing New York Real Estate Prices
In a real estate market analysis, it makes sense to balance the impact of a high cost of living versus the area's desirability. When we look at New York real estate prices, there are a few overarching principles to consider. We can consider New York City almost as a separate state. Its price highly depends on the number of people moving to the area. Migration to New York and other large cities has dropped since the pandemic. The cost of living in New York City is 41% higher than the rest of the state and 77% higher than the national average, according to RentCafe.
New York City’s ability to attract new residents depends heavily on people having high-paying jobs that help them manage their expenses. As of August 2024, the unemployment rate in New York City was 5.2%, which is above the national average. Nearly 70% of households in New York City are renters. That is not the case in the rest of the state, where homeownership rates are closer to national averages.
What Makes New York Real Estate Prices Go Up?
New York real estate prices have risen in recent years. During the pandemic, many people in New York City purchased a home outside the city. Some residents have moved back to the city, but the expansion of homeownership and the demand for homes have boosted prices in some areas of upstate New York.
New York City’s real estate market thrives on scarcity. Although new luxury developments exist in the region, overall housing supply remains constrained, especially at the lower level. That keeps real estate prices on an upward trajectory.
What Makes New York Real Estate Prices Go Down?
New York real estate is highly dependent on economic conditions. In New York City, many buyers rely on high-paying jobs in technology and the financial services industry. Some large financial institutions have moved their headquarters away from the city, forcing their employees to relocate. New York City remains a tremendous draw, but a robust economy is necessary to support residents with high costs of living.
Cost is a major concern for many New York residents. A report from the New York City Comptroller’s office found that one in five New Yorkers is severely cost-burdened, with over 50% of their income going toward housing. That number includes renters and homeowners, but if housing affordability becomes too onerous for people, New York real estate prices could drop.
New York Real Estate Forecast For 2024
Like most regions, New York has seen home sales drop in 2024. Part of the issue has been high mortgage rates. As of August 2024, the New York State Association of Realtors reported that closed sales were down by 9.1% and pending sales were down by 2.9%. Existing homes for sale in New York are down 5.8% year over year. Inventory has dropped steadily. In 2022, there were 36,875 homes for sale. In 2023, the number fell to 29,787; in 2024, it was 27,851. Inventory has fallen for 18 months in a row.
Meanwhile, prices have risen. The New York State Association of Realtors showed that the median price in August was $444,713, up nearly 8.5% year over year. New York State prices have increased for 13 consecutive months and it is expected that prices may increase 10% by the end of the year. Sales are not expected to increase dramatically and will likely decrease 10% or more from last year’s levels.
New York Real Estate Forecast For 2025
The big question for the New York real estate market in 2025 is whether or not more homes will be listed for sale. While New York does have some homebuilders operating in the region, it has a different dynamic than Texas, which can count on builders to make up a significant portion of the housing supply.
If mortgage rates fall in 2025, more buyers will likely be looking to buy a home. If supply doesn’t increase, prices will be put under additional pressure. While overall national price growth is expected to moderate and sales are expected to rise year over year, a lack of inventory could alter that picture for New York. Lawrence Yun, Chief Economist for the National Association of Realtors, has forecast nationally that home sales could increase to 5.05 million in 2025.
New York Real Estate Forecast For 2030
Looking ahead to New York real estate in 2030 is complicated. One of the biggest questions is how robust New York City will be over the coming years. Will it see more inflows than outflows in terms of population and if so, will it be able to create enough housing?
In the rest of the state, it can be expected that New York real estate prices will experience modest growth. In the past 10 years, New York real estate prices increased by over 80%; however, most of that was during the past five years, fueled by pandemic buying. It is more likely that New York real estate prices will increase by 10 to 20% over the next five years, which would be similar to its previous pace.
Challenges And Opportunities In New York Real Estate
A dramatic change in how people view the area and its affordability could shift the New York real estate forecast. For the smaller cities and more modestly priced areas, the challenge will be keeping enough jobs to provide residents with a good quality of life. Some areas, like Buffalo, have seen the population drop for decades. If you are a real estate investor, you will want to ensure that you have a solid growth trajectory wherever you invest.
Being a real estate investor in New York City can be difficult because the barrier to entry is so high. However, the returns can also be rewarding. One way to invest in New York City real estate is through crowdfunding. Several major real estate crowdfunding and fractional companies have projects in New York City. See the Benzinga real estate screener for more details.
Is New York Real Estate A Good Investment?
The decision to invest in New York real estate depends on where you are investing and how you plan to use your property. If you are looking for a home for a long time, you will likely find affordable homes in the smaller cities and towns in the state but may not enjoy as much price appreciation.
If you are a more speculative buyer or investor looking toward the Big Apple, you will likely benefit from steady appreciation. However, becoming a landlord in New York City is difficult because the city has many rules to protect tenants from high rent increases. If you are buying a home to live in, you may be in a condominium or co-op and will need to factor monthly fees into the overall value of your investment. However, New York City’s global cachet should keep it in demand for decades to come.
Conclusion
New York’s real estate market is one of the most dynamic in the country. Led by the juggernaut of New York City, the state remains a top draw for businesses and individuals. Looking forward, while the market remains competitive, there is a forecasted stabilization. This may provide some homebuyers and investors the chance to buy even though affordability remains strained in many areas of New York State.
Frequently Asked Questions
Is now a good time to buy a house in New York?
Right now, prices are high and inventory is low. This makes it challenging for many buyers to find a home. You may have to be tenacious to find the right one.
Is now a good time to sell a house in New York?
Buyers are motivated in many parts of New York and inventory is continuing to drop. If you have owned your home for five years or more, you may benefit from price appreciation.
What is the current price for a house in New York?
According to Redfin, as of August 2024, the median home price was $549,300.