In mid-to-late summer, the New York-Newark-Jersey City metro area experienced its first year-over-year increases in its new-home pending sales index since spring 2022.
Although a sign of some resiliency, New York's gains were some of the lowest among large markets across the United States. New-home sales across the nation have benefited from the use of incentives by builders to sell quick move-in (QMI) homes that are a great alternative to limited resale supply.
New York's new-home sales have been constrained, in part, by a low inventory of QMls. New York, Baltimore, and San Francisco—three markets particularly limited by land and lots—have seen the largest decreases in QMls compared with 2019.
Strengths
Resale listings remain down year over year and have been decreasing month over month since mid-summer. Although the rest of the New York metro has lagged in its pandemic jobs recovery, the New Jersey counties, particularly Central Jersey, have seen job growth surge since February 2020.
Weaknesses
Both millennials and baby boomers have been leaving New York. New York saw one of the largest outflows of people during the pandemic, and out-migration continues to be among the highest in the U.S. this year, according to a Bank of America Institute analysis.
Supply
Quarterly housing starts decreased 50.7% from a year ago, while the number of available vacant developed lots sits at 3,817, down 10.8% from the same quarter last year. In terms of supply/demand balance, the market area is 2.47% undersupplied.
Sales
New-home sales in the metro area decreased 24.1% year over year to an annualized rate of 5,413 units in September. Existing-home closings for the 12-month period ending in September posted a year-over-year decline of 38.8% to an annualized rate of 132,418 units.
Prices
The average list price for a new detached home in the region increased 28.3% from 2022 to $880,023 in September, while the average list price for a new attached home increased 2% over the same period to $2,312,650. Homes priced under $400,000 experienced the most closing activity over the past year. The new-home affordability ratio for a detached home reached 17.5% in September.
Economy
Total nonfarm employment in the New York-Newark-Jersey City metropolitan statistical area increased 1.7% from the same period last year to 10,058,600 payrolls in August, with approximately 12,500 more jobs compared with the previous month. The local unemployment rate increased to 4.2% in August compared with 4.1% in the previous month. August's jobless rate is higher than it was this time last year when it stood at 3.6%. Zonda forecasts the region's unemployment rate will finish the year at 4.3%.
Community
The current population for the metropolitan area is approximately 19,749,870 people and is projected to increase by 0.1% this year. There are approximately 7,367,630 households in the region, which is down 0.6% year over year. Forecasts show that current household formation is expected to increase by an annual growth rate of 3.1% for 2028. Incomes increased by 5.5% from the previous year to $94,150.
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