For anyone working in real estate, owning their home, or thinking about buying property, predicting where the real estate market is going in 2023 is not only top of mind – it’s become a near obsession.
Ongoing inflation, increasing interest rates, and slowing sales in much of the country have made many real estate watchers take pause and take stock of what the future holds.
But on Long Island’s North Shore what’s called for in these times of turmoil is a little less prognosticating and a little more perspective. Luckily, with an Oyster Bay and North Shore real estate expert like Tracy Clennon, you’ve got the kind of calm, heady perspective on real estate matters that this market calls for. In a recent conversation, Tracy outlined her tips for how to look at the current real estate market in Long Island’s “Gold Coast.”
1. People Who Tell You They Know – Don’t
Here’s what we do know. This won’t be a repeat of 2008. We don’t anticipate prices will fall dramatically. It might be a good time to score a slight deal, particularly if you have cash. Or you can refi later. And buying is cheaper than renting in the long run.
What more do you need to know?
Well, here is how we got here. After a long-established seller’s market, various factors are swaying the real estate industry back to the other side. Part of the reason for this shift lies with the Federal Reserve. Taxed with providing and regulating the United States with a stable and healthy financial system, the Fed stepped in when soaring property prices showed no signs of slowing down. During the pandemic, the Fed saw the need to support the housing market and paused interest rate increases in order to stimulate the market and the new Covid-affected economy. The plan worked – and kept on working.
The pandemic made sellers hesitant to list their homes, with many opting to instead begin home repairs and put off thoughts of selling. With little inventory on the market compared with demand, buyers began snapping up available properties, creating a heated seller’s market.
However, after the golden seller’s age of 2021-2022, things have shifted. Concerned over the rise in inflation, the Fed began raising interest rates this year in order to stabilize the market and prevent a rise in the cost of living. While these proposed increases initially caused a spike in both list prices and home sales, the market is indeed leveling off, and the projections for next year look entirely different—at least, in most parts of the country.
2. Home Sales Will Continue
Photo courtesy of Tracy Clennon
While recent months have seen a slowdown in home sales, and economists are predicting a softening market in the coming year, the decline in sales and prices is not predicted to be as much as you might think. The National Association of Realtor, forecasts a 0% increase in prices
, meaning half of the markets will go up and half will go down, but nothing like the big downturn of 10+ years ago.
People are still moving. The work-from-home revolution is prompting many to sell and relocate to cheaper or more comfortable locations. The job market has remained relatively strong. Because people are still living their lives that means many will still be buying and selling homes.
3. This Place is Never Going Out of Style
Because of its sought-after amenities and lavish estates, Oyster Bay has long held court in the real estate industry. The sprawling homes
, manicured yards, have been home to the country’s dignitaries for centuries. With the most famous of Oyster Bay luxury homes being President Theodore Roosevelt’s Sagamore Hill estate, a National Historic Landmark site.
The residents here cherish Oyster Bay for its spectacular waterfront properties, privacy, and elevated culture. Artistic and relaxing, Oyster Bay features posh art galleries, world-class restaurants, and panoramic bay views, making this a highly coveted retreat.
There’s a reason it’s called “The Gold Coast.”
Tumultuous interest rates – rising for most of 2022 but dipping in Q4 – have impacted buyers. According to Forbes, the market will still be strong, but the average buyer may find themselves with a smaller budget. The difference
between rates set at 3.1% versus 7% makes a significant impact, leaving buyers able to afford less than in 2021.
But is Oyster Bay expected to experience the same shifts and changes as the rest of the country? Not necessarily, according to Newsday
. More desirable markets in Long Island still have some supply constraints
keeping prices from falling dramatically. While generally speaking, the nation is projected to switch from a seller’s market to a buyer’s dreamland of high inventory and reasonable prices, the same is not true of the unique Oyster Bay community.
While other areas, especially high-growth communities and sprawling cities, offer a large selection of homes and condos, Oyster Bay does not subscribe to a typical housing market layout. In other cities and towns across the nation, higher interest rates and a flood of available inventory mean buyers are taking control of the market – the real estate market continues to be robust and healthy, but the cooling off of prices and increase in inventory put buyers in the driver’s seat in terms of negotiation power.
Within Nassau County overall, the median home price sits at $654,600
, according to the National Association of Realtors’ most recent local market report. This is a 9.4% appreciation
over a year ago. It is important to note that while there was an increase in prices, the rise was much less substantial compared to the timeframe from 2020 to 2021, when there was a significant spike in median home prices. This mirrors the slowing of the market.
In Oyster Bay specifically, inventory is an issue. A smaller area with limited land, Long Island does not have the development areas or available existing homes to ever be considered a high inventory market. As of December 2022, there were only 24
homes for sale in Oyster Bay, with a median price of $737,450. The exclusivity of the community is what brings some of the country’s most high-profile residents to live here. It’s also what keeps Oyster Bay experiencing a market that can be favorable for buyers or sellers – with opportunities on either side of a transaction – if you have a trusted advisor to help.
4. Another Word for a Slow Market: “Opportunity”
What was speculation only a few months ago has come to be accepted as fact – 2023 will indeed be a buyer’s market. According to most economists
, the next year will swing the real estate pendulum back to favor buyers.
After several years of rising prices, bidding wars, and low inventory, buying a home in a slowing market can feel like a breath of fresh air. But buyers now have the power. And buyers with cash have the most power.
Additionally, many people who thought they were ready to buy stayed on the sidelines in the past couple of years as prices escalated. Some of those people – you may be one – are ready to jump into this opportunistic real estate market.
5. You “Marry” Your House – But You “Date” Your Interest
Rate Certainly, the fed’s repeated raising of interest rates has made mortgage payments higher, and weakened affordability. But the fed has already indicated they’re not going to keep raising interest rates. And if there’s one thing we know about interest rates: Everything that goes up, eventually comes down. And that, of course, means time for refinancing.
Grabbing a house you might not have been able to land in a faster-paced market can be a priceless move.
Working with a real estate agent
As the National Association of Realtors proclaims, there are endless benefits to working with a real estate agent. Their studies have shown that over 85%
of home buyers work with an agent and for good reason. Even in the most tranquil of real estate waters, the multistep process of buying and selling a home involves detailed contracts, strategies, and carefully designed approaches that agents navigate with ease.
Not only can real estate agents seamlessly guide buyers and sellers through the complex maze of real estate requirements and transactions, but they can also help clients work through the pros and cons of investing, deciding when to sell, and aiming for success when buying and selling a home at the same time.
From extensive buying guides and the uncanny ability to recall inventory that may be perfect for their clients, to advising clients on the importance of curb appeal and advising them on how to maximize square footage
in their home to boost their list price, real estate agents offer unparalleled knowledge and expertise.
If you plan on selling your home, speak with your agent early to determine when and how to approach the upcoming market changes. If you are eager to get out and purchase a new home, get organized with your agent to plan accordingly to set yourself up for ultimate success. The same goes for investors – now is the time to strategize with your trusted agent
to secure funding, create a plan of attack, and step confidently into your real estate dreams.
If you are interested in exploring the Oyster Bay real estate market, contact luxury real estate expert Tracy Clennon
. With 10 years of top-notch experience in marketing, Tracy
is well-versed in the strategies that will get a home seen and sold. As a Realtor®, she is also passionate about helping buyers find properties that speak to their dreams. You could be next!