After a strong kick-off to the 2018 housing market, only time will tell how rising interest rates will affect Staten Island, N.Y., residential real estate sales.
In fact, if the market value of homes dips this year, real estate professionals say it will likely be due to a hike in mortgage interest rates.
With interest rates unusually low for the last five years — dipping to 3.65% — they are beginning to creep up again to between 4.15% and 4.3% for a fixed rate mortgage.
“The big question facing the market in April, May and June — typically our strongest months — is just how much of an effect the interest rate increase will have on the marketplace,” said Robert Kelly, broker/owner of Master Realtors in Prince’s Bay.
“Typically, it affects the lower end of the market more because these are first-time buyers and people with limited income trying to get into the market or trade up in the market,” said Kelly.
The rise in interest rates is already causing the bidding wars that have become commonplace over the last few years to gradually lessen, Realtors say.
“The market has been very strong, however, an overall lack of inventory has kept the market from overheating,” said James Prendamano, managing director/associate broker for the St. George-based Casandra Properties.
“… as the interest rates have crept back up, that playing field is beginning to level. We are seeing homes return to their pre-recession values. This has allowed more sellers to enter the market as they are able to get out from underneath their mortgages,” added Predamano.
In addition to interest rates, there are other factors, like new federal tax laws, that will likely impact Staten Island’s residential real estate this year.
“Rising mortgage rates, uncertainty of the impact of the Federal tax laws and various interpretations of the future of the stock market are also major factors,” said Sandy Krueger, CEO of the Staten Island Board of Realtors (SIBOR).
Despite this, there are many potential homebuyers — including those seeking investment properties — currently in the Staten Island real estate marketplace.
“We are also seeing a significant increase in Asian buyers who may have exhausted other borough opportunities. Inventory levels continue to be historically low for this market — although the days on the market are creeping higher, possibly the result of unfavorable weather conditions in recent months,” said Krueger.
And many buyers priced out of the other boroughs continue to come to Staten Island in search of a home.
“As far as who is coming to purchase on Staten Island, we are still pretty much 50/50 between people moving from Brooklyn and southern Queens and people trading up or entering the market who currently live on Staten Island,” said Kelly.
There are also many first-time buyers — most, who need large down payments — seeking Staten Island real estate.
“Mostly first timers, who appear to have a lot of cash to put down [are in the marketplace],” said Jon Salmon, broker/owner Salmon Real Estate in Castleton Corners. ” In many cases it’s ‘family’ money [used for a down payment]. Also, many buyers, originally from overseas, are looking to buy on Staten Island .Again, with lots of cash to put down.”
Median home prices for March 2018 were $550,000 — up from $499,000 in 2017 — with 305 homes sold this year to date, according to SIBOR. By this time last year, there were 365 homes sold, according to SIBOR.
But this year there are more homes on the market.
There were about 1,400 Staten Island homes for sale last March, compared to 1,500 for sale last month, according to SIBOR.
While there seems to be more homes on the market than last year, there’s still a lack of “affordable houses for sale.”
“There isn’t enough affordable inventory for buyers,” said Joan Camerlengo broker/owner of Joan Camerlengo Realty in New Dorp. “That said, all types of properties — from low-end to high-end — are selling, and especially those priced below $599,000.”
However, it’s homes priced over $1 million that tend to stay on the market for longer periods of time.
“Anything [homes] under a million dollars [on the] the market has been very strong over all,” said Prendamano.
“While we have seen improvement over the million dollar mark, it is not as nearly as strong as the markets below it. Entry-level pricing and the move-up market have been particularly strong throughout that period. I would define that as $300,000 to $750,000,” he said.
Tribune Content Agency