Table of Contents

• The Nationwide Housing Market Is Improving 

• Is Manhattan a Buyer’s Market?

• Other Metro Markets Look Attractive Too

At 25, I made what seemed like a crazy financial decision to everyone else in my life: I bought a house. Actually,  it was a vacation home. Actually again, it was raw land in a vacation community - the tony Hamptons, 90 miles east of NYC. At the time, I had no wife, no kids, and was very much enjoying the New York City bachelor lifestyle despite working 75 hour weeks.

I didn't even have free time TO vacation let alone time to or money to build a house. For 2 years, I would drive out to Sag Harbor with a folding beach chair and sit on my pile of dirt staring at Noyac Bay below:

Here’s why: I knew that eventually, home ownership was my #1 goal I wanted to achieve with my work and my investments. I wanted a home to serve as an anchor for my future self and my future family. The one I have now in fact. So why then?

One word - OPPORTUNITY.

It was 1993, maybe the worst dollar-adjusted real estate recession in modern history and that includes 2007.  Price opportunity doesn’t wait for you to be ready, it arrives whether you’re ready or not.

So I bought 1.5 waterfront acres for $400K and then I borrowed $800K and combined it with what little cash I had left and built a 5000 sq ft house. All in it cost $1.2 million( hey, it was the ‘90’s and a real estate recession), completed by 1998; it took a while to scrape together the restof the money over time.

What’s it worth now? Maybe $15 million…and its now my primary residence with my family.  Here is a drove video if you care - https://youtu.be/IicXSwoQWMI?si=oA8UrZ12xYkfaMKu

To paraphrase the great Wayne Gretzky, skate to where the puck is going – not where it was. In other words, this financial decision was all about two important elements aligning:

• My goals (investment today, home ownership tomorrow),

• And opportunity (a very attractive price for waterfront land due to a recession).

There’s one big reason I’m talking about this today… its happening again.

I predicted a recession and stagflation to occur in 2024 back last December and i beleive its already here just the data lags. If buying a home is one of your financial goals, now might be the time to start shopping around. I am again…in NYC near my sons’ schools.

The housing market has been tough for buyers over the past couple years – but there’s mounting evidence that things are starting to change.

The Nationwide Housing Market Is Improving 

Back in June, I explored whether it makes more sense to rent or buy when it comes to housing.

Here was the main takeaway from that issue (spoiler alert): it depends.

One of the biggest factors determining whether it makes sense to buy a home is the state of the housing market – including factors like home prices, mortgage rates, and the overall availability of properties.

Last month, Redfin, one of the leading online real estate brokers, published an intriguing report. Among other elements, they found that:

• The typical US home sold for less than its asking price in June, the first time that’s happened since the start of the pandemic.

• Supply is rising, with new listings up 8.2% year-over-year nationwide.

• Inventory is growing stale, with more than 60% of homes listed for over a month without going under contract.

What’s more, mortgage rates have started to noticeably decline recently. 

The average 30-year fixed mortgage is now 6.47%, down about 50 basis points year-over-year.

And with the Federal Reserve likely to start an interest rate cutting cycle at their next meeting in September, this mortgage rate will probably keep improving.

Is Manhattan a Buyer’s Market?

While the nationwide housing market is improving, real estate markets are highly location specific – so there’s a lot of variability region-by-region.

And one region that’s particularly interesting right now is Manhattan.

In fact, I’m even seeing headlines right now calling Manhattan a buyer’s market.

If you’re young, you might not appreciate how unusual that is – but in my long career in real estate, it’s extraordinarily rare for Manhattan to be anything other than a seller-dominated market.

Here’s how the numbers shake out:

• There are now more than 8,000 apartments for sale in Manhattan, well above the long-term average of 7,000.

• It would take nearly 10 months to sell all of the current Manhattan listings without any new listings (any amount over 6 months usually indicates oversupply).

• The average Manhattan sale price fell about 3% in the second quarter.

Don’t get me wrong – New York City is still an expensive place to live, and that’s not going to change anytime soon.

But if one of your goals is to get a place in the city, now might provide some relatively attractive opportunities to make that happen.

Other Metro Markets Look Attractive Too

Of course, living in Manhattan isn’t for everyone – and with persistently high housing costs, it might not even be the smartest financial move.

Thankfully, the improved nationwide housing situation is also reflected by a few other major metro areas, all of which rank highly in terms of livability and economic prospects.

Here are the other big markets that look well-suited for first-time homebuyers right now:

• Despite the city’s surprising resurgence as a tech hub, Pittsburgh is one of the most affordable metro real estate markets in the country when evaluated on a mortgage-to-income basis.

• While Austin has seen a boom in housing prices over the past 5 years, there is evidence things are starting to move in favor of buyers. Prices have fallen by about 6% year-over-year and listings are staying on the market longer.

• San Antonio is an attractive Texas alternative to Austin, with more affordable mortgage payments but comparable livability and employment metrics.

• Birmingham might be a surprising entry on this list, but the city offers one of the nation’s fastest-growing labor markets and the 6^th most affordable mortgages of any metro area nationwide.

• Finally, Jacksonville rounds out the list with median sale prices that are $100K under the national average and stale listings showing increased evidence of a buyer’s market.

When preparation meets opportunity…

There’s always an element of ‘luck’ when it comes to finding the right job, the right partner, or the right home.

But that doesn’t mean it’s entirely out of our control. As one of my all-time favorite quotes puts it:

Luck is what happens when preparation meets opportunity.

Sure, we don’t know when opportunities might arise. 

But that’s why it’s so important we prepare ourselves to take advantage of them when we do.

If one of your financial goals is to buy a home, there are emerging opportunities for you to consider right now – if you’re prepared.

As you continue your wealth journey with NOYACK, my aim is to offer guidance on both sides of the luck equation:

• Helping to identify opportunities to unlock your financial goals,

• And helping to prepare your finances to seize those opportunities when they arise.

Stay tuned for next week’s edition, in which we’ll continue to work on financial preparation through high-growth investments in alternatives…

📺 WHAT WE'RE WATCHING

This Yahoo Finance interview with a real estate economist adds some helpful context on the state of the housing market. While the nationwide market might not be a true “buyer’s market” yet, things appear to be trending in that direction.

Yahoo Finance - Why the housing sector isn't a 'buyer's market' yet

👂 WHAT WE’RE LISTENING TO

This episode of the Bloomberg Odd Lots podcast is a fascinating look at the current market for luxury homes in Miami. While not all of us are looking to buy $100M+ homes, this discussion with a veteran luxury real estate broker offers an intriguing and entertaining look at what that process looks like.

Odd Lots - A Top Miami Broker on the Booming Market for Ultra-Luxury Homes

📖 WHAT WE’RE READING

This monthly housing market update from the US Department of Housing and Urban Development contains updated details on the nationwide housing situation, including plenty of data points and charts.

US HUD - Housing Market Indicators Monthly Update June 2024

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