Real Estate 2024: Election Year Secret

Real Estate 2024: Election Year Secret

Should you wait until after the 2024 Presidential Election to buy NYC real estate in anticipation of better housing prices this January? It is tempting to try and time the market.

While timing financial markets in general is very difficult, the real estate market is even tougher. Transactions move slowly. In New York City, we do not have set closing dates. You can, however, be strategic and make sure you are in the market when there are fewer buyers, creating competition which drives up pricing.

Recently I had a chat with AM New York about why the next few months offer a unique window of opportunity for buyers. Here are my comments extracted from the article:

“We’re expecting the Fed to lower the interest rate, which will bring down mortgage rates,” said Julia Boland, of The Boland Team at The Corcoran Group. “Typically, lower rates increase demand, but this year’s presidential election might change that dynamic.”

Historically, presidential election years see a lull in housing transactions as buyers become distracted by political events. However, past data suggests that elections have minimal immediate impact on the economy or housing market.

“This is a great time for a buyer to not only get a lower mortgage rate, but get in without a lot of demand before prices go up,” said Boland.

Bearing in mind that real estate is an illiquid investment, smart buyers can be strategic by getting organized now. If you are ready to buy, you want to get a deal before other buyers realize lower rates are making Manhattan apartments more affordable.

It takes time and money to purchase a NYC condo or co-op. Today’s mortgage rates have dampened enthusiasm for many buyers in the market because they are so much higher than they were a few years ago. This is especially true for properties priced below $3 million.

The most recent Manhattan quarterly report revealed that prices have come down for the past six months as a result of higher mortgage rates. The secret to getting a great deal is to lock in the lowest purchase price possible. With mortgage rates expected to come down, these lower prices may not last for long.

Buyers — here is how you capitalize on this time sensitive opportunity.

Begin by understanding the typical timeline for a purchase transaction. If you are just beginning your search, it may take you another three months to find a property you wish to purchase. Other buyers are likely to be distracted thinking the outcome of the 2024 Presidential Election will have an immediate impact on the housing market but remember there is no evidence this happens. This gives you a competitive advantage.

Once your offer is accepted, the next three months will be dedicated to time for due diligence:

• Preparing a purchase application
• Waiting for the bank to issue the commitment letter
• Waiting for the board to review your information
• Scheduling the closing.

The entire process from the time you start looking until you get to the closing can take up to half a year.

During that six-month time, mortgage rates and prices will fluctuate but not wildly. At this point you will be working with your mortgage professional to determine if they expect rates to go up or down in the following weeks. If they are expected to go up for any reason, then you will work with your team to determine if a rate lock is a good idea.

Be certain to check with your buyer’s agent that the rate lock timing will work for the potential closing date so you don’t end up paying extra money for that rate lock. While you can change your mortgage rate in the future by refinancing you cannot change your purchase price.

Have any questions about locking in your deal? Reach out to me. I would be happy to help you navigate the very complicated NYC real estate market.