Local real estate prices reflect supply and demand economics
STATEN ISLAND, N.Y. (June 13, 2016) – Although relatively low inventory and rising prices are the current norm of Staten Island’s housing industry, the local market is not headed for the bubble envisioned by doomsday soothsayers.
Low inventories and escalating prices that currently define the residential real estate market on Staten Island mirror a trend taking place across the nation.
“The median number of days a home sits on the market before being sold has fallen by more than half over the last four years, from 98 days to 46 days,” wrote Yun in NAR’s Market Pulse column of May/June 2016.
“The 2006 bubble burst was the result of irrational lending, which then sparked an irrational building spurt in many parts of the country,” Krueger said. “Neither of those conditions exist today.”
High-tech cities like San Francisco, Washington D.C. and New York are experiencing skyrocketing rents along with higher salaries, which encourages people to purchase homes, Krueger said.
“This, along with the growing desire for people to live closer to the urban areas than we have seen in the past, is helping to drive up sales prices as supply can’t keep up with demand,” he said.
In the past, such conditions might have been tempered by the new developments that were rapidly transposing the South Shore of Staten Island; but today, there aren’t the large tracts to allow that to happen at the same pace, Krueger explained.
“So, Staten Island, like many areas in the region and the country, is in the thick of an exciting period of residential real estate activity, often with multiple offers that are near, at, or even above asking prices, depending on the factors of the particular home and submarket in question,” Krueger said. “Part of the demand is probably also related to the persistent talk of rising interest rates coming later in the year with folks hoping to get into lower loans before that happens.”
Nothing about the current market appears to have the irrational elements that were present in the 2006 environment, and therefore seem wholly unfounded, Kruger said.
According to the latest statistics, which reflect the Island’s real estate activity in May as compared to a year earlier, sale units decreased 5.4 percent, median sales price increased 9.9 percent, inventory levels fell 35 percent and “Days on Market” was down 21.4 percent.
“These numbers reflect a market where demand is outpacing supply, but do not reflect an overheated or out-of-control marketplace,” Krueger said.
About The Staten Island Board of REALTORS® (SIBOR)
Having marked its 100th anniversary in 2015, the Staten Island Board of REALTORS® (SIBOR) is the largest not-for-profit professional and trade association in Staten Island, N.Y.
SIBOR exists to enhance the ability and opportunity of its members to conduct their business successfully and ethically, and promote the preservation of the public’s right to own, transfer and use real property.
Comprised of approximately 1,800 members, SIBOR serves real estate agents, brokers and affiliated professionals throughout the borough and surrounding areas.
SIBOR is the provider of the Staten Island Multiple Listing Service Inc. (SIMLS), which works as a clearinghouse through which more than 250 local real estate firms exchange information on properties they have listed for sale. Together, its members participate in over 3,700 real estate transactions every year.
All SIBOR Realtors belong to the New York State Association of REALTORS® (NYSAR) and the National Association of REALTORS® (NAR).
SIBOR may be reached at 718-928-3220 and viewed online at www.SIBOR.com. SIBOR may also be visited on Facebook at “Staten Island Board of Realtors” and on Twitter via @SIBOR.