It’s opening day here on Brownstoner Queens so it’s time to get caught up on the Queens real estate market.
On the surface, things looked healthy for the sales in the borough in the first quarter. Median prices were up 1.1% to $350,000 and sales volume rose a solid 9.2% to 2,377, according to Miller Samuel’s first quarter Queens report, prepared for Douglas Elliman (PDF)
But there are signs that the good times (for sellers) may not last: Listing inventory fell to 6,496, an 8-year low and down a big 26.6% compared to the prior year.
“We expect continued rise in sales through the spring,” Jonathan Miller, president of Miller Samuel, told Brownstoner. “At some point, though, the contraction of inventory is going to rein future sales growth.”
Low inventory is good news for developers who are able to break ground and bring new buildings to market. But it is, unsurprisingly, bad news for buyers, who have fewer options and more competition. This was reflected in the first quarter with a drop in price discounts to 5.8%, down from 6.9% in the prior year.
Although the Queens market is highly local, it mirrors some of national trends. Mortgage rates are low, with the 30-year fixed rate around 3.5 percent. But the problem, Miller explains, is the difficulty of actually getting mortgage approval. Most banks are looking for stellar credit ratings, and a small blemish like a few missed payments can damage your chances for getting financing.
This ends up hurting not just first-time buyers, but also resales. If a person isn’t able to get a new mortgage, he or she will likely stay put, weakening inventory further.
“Many sellers who want to sell can’t buy, so they don’t sell,” says Miller.
The popular solution for those with bad credit? Renting.