Different regions of the United States are categorized as “overvalued,” “undervalued,” or “normal” according to a study conducted by Fortune. The home price increase is vastly surpassing income growth everywhere. Specifically, in downstate New York, Suffolk, Nassau, and Westchester counties have been identified as “overvalued,” according to the research.
Other upstate counties likewise received this distinction, although the markets in the remainder of the state have stayed substantially intact. Fortune found that roughly 68 percent of metropolitan housing markets are “overvalued,” an increase from prior research, while 24.5 percents are “normal” and 7.6 percent are “undervalued.” These findings are based on data from CoreLogic, which examined hundreds of metropolitan housing markets.
According to the report, “overvalued” markets have experienced an increase in mortgage rates, which is affecting new and existing house sales, as well as mortgage applications, which are seeing a precipitous decrease. Meanwhile, CoreLogic now says only 24.5% of U.S. housing markets are “normal” and just 7.6% are “undervalued.” CoreLogic predicts that home prices throughout the nation will continue to grow over the next year, with the exception of four cities, including Bridgeport, where there is a “very high” possibility that home prices would decline.
Will Prices Drop in Long Island Housing Market in 2023?
The home prices will likely decline in Westchester and Long Island as they are overvalued housing markets. As a result of the present housing bubble, homes in some areas of downstate New York are deemed “overvalued.” A separate report from Moody's Analytics is more pessimistic. The report says that 96% of the nation's 392 biggest housing markets are “overvalued” relative to local salaries.
This contains 149 home markets that are at least 25% “overvalued.” In the future, Zandi anticipates the annual growth rate of U.S. housing prices will collapse from 20 percent to 0%. Moreover, he anticipates house price declines of 5 to 10 percent over the next year in the most “overvalued” property markets in the United States.
These regional housing markets are the most likely to see home prices decline: Boise; Colorado Springs, Colo.; Las Vegas; Coeur d’Alene, Idaho; Tampa; Atlanta; Fort Collins, Colo; Sherman, Texas; Jacksonville; Idaho Falls, Idaho; Lakeland, Fla.; Greeley, Colo.; Longview, Wash.; Charleston, S.C.; Albany, N.Y.; Denver; Clarksville, Tenn.; Greensboro, N.C.; Charlotte.
Long Island Housing Market Trends 2022
Numerous prospective purchasers were deterred from entering the Long Island housing market in 2021 as a result of the pandemic-era increase in home prices, mounting job insecurity fears, and rising mortgage rates. The housing market saw intense bidding wars and selling prices over the asking price, following the highest yearly increase in 45 years.
Lack of supply was a major contributor to the price increase in Long Island housing market. Buyers snapped up properties at an unprecedented rate, creating a highly competitive seller's market. It is evident why dissatisfied purchasers are anticipating a market correction in 2022. However, you may have to wait for some time.
In June 2022, housing prices on Long Island reached all-time highs, with the market showing no signs of abating. Home prices in Suffolk established a new record, according to NYSAR's latest report. In May, when the median sales price in Suffolk reached $555,000, the previous record was set. In June, the median sales price increased to $559,500. Even greater price increases occurred in Nassau County. The median sales prices reached $720,000.
This is an 11.9% increase in Nassau and a staggering 10.7% increase in Suffolk. Despite rising prices, the number of homes sold continues to decline. Compared to June of last year, 8.4 percent fewer homes were sold in Suffolk, totaling 1,564. In June, 1,272 homes were sold in Nassau, a 13.8 percent drop over the same month last year when 1,475 homes were sold. Home prices had begun to decline from the all-time highs reached last summer, but have begun to rise again. The prices of pending sales are significantly greater than they have been, suggesting that home values may continue to rise.
The housing supply in Suffolk county is 2.4 months, a slight increase of 4.3% from last year. Low housing supply and high demand will sustain a seller's market, but one that is less fierce than at its peak in 2021. Buyers may anticipate an uphill fight, but one that is not as severe. As more properties hit the market, prices should begin to decrease, changing the balance between sellers and buyers toward a more balanced market. And when last year's double-digit percentage gains begin to taper down, buyer pressure should subside.