Even though we recently noted US housing supply could be finally catching up with demand, that doesn't seem to be the case for single-family homes in New York City's suburbs. The great exodus from the city for rural life continues, but there are not enough homes on the market, which dampened sales last month.
New York City's suburbs have been in a total euphoric buying frenzy over the last year due to an abundance of city dwellers buying up rural homes. This sparked insane bidding wars and homes that sold routinely over asking prices, many with cash offers that were willing to waive inspections and seller costs.
Bloomberg cites a new report from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate that says for the first time in more than a year, home sales for July in New York City's suburbs declined.
Single-family home sales in Westchester County fell 36% and 31% in Long Island last month over the same period the previous year, the first decline since June 2020. Signed deals in the Hamptons fell for the second consecutive time since May 2020, with contracts in July diving as much as 61%.
The lack of homes with high demand among city dwellers plus low-interest rates has kept a bid in New York City's suburban markets. A hybrid workweek has allowed many to work at home and float between the office. As long as a good internet connection in the suburbs can handle Bloomberg Terminals and Zoom calls, demand for suburban homes will continue.
Only 150 homes were listed last month in the Hamptons, 36% fewer than a year ago. Westchester recorded a 48% drop in new listings while Long Island listings sank 18%.
Scott Durkin, chief executive officer of Douglas Elliman, said new construction is needed to satisfy demand. Those familiar with purchasing land and building a home from scratch understand that permitting to the actual build can take anywhere between 1-2 years.
There was one exception, Greenwich saw a 10% rise in signed deals last month, though listings fell 8.5%.
Home sales in New York City's suburbs are sliding as many are unwilling to chase prices higher. This market will eventually correct the supply imbalance, and prices will adjust accordingly.