New York Househack Update: Market Snapshot for 2-4 Unit Properties

[Abel Curiel]

Thank you for checking this out… I hope this information is helpful to you or someone you know in the New York market.

If you are interested in 2-4 unit properties in Queens, Brooklyn, the Bronx, Westchester or Long Island, this will give you a sense of what is happening in the NYC metro area.

How ‘hot’ is the market? Where are the most opportunities arising? Which direction is the small multifamily market heading in?

Economists, investors, brokers, and countless media outlets (including Youtube) share market predictions in January and the preceding months. Come July, we are halfway through the year and should know whether those predictions were on point OR way off!

How hard is it to find a property to house hack in New York? Source: OneKeyMLS

As you can see, there are more opportunities for house hackers in 2024 than there were last year.

All Counties saw 40%+ increases in inventory. Brooklyn had the highest % increase (74!).

Lets get into the boroughs...

Queens

The World's Borough saw a median price increase of 6% among 2-4 family properties sold. Properties are selling just as quickly as they were last year despite a 68% spike in inventory. Demand is keeping up with inventory.

A trend we'll keep an eye out for is the gap between median asking prices and median sale prices. In 2023, there was an 11% difference between what sellers listed their properties for and what they actually sold for.

Since it has the highest count of sold small multifamily properties, here are House Hacker's top 10 Queens neighborhoods:

• Jamaica: 102 deals
• Flushing: 71 deals
• Glendale: 41 deals
• Astoria: 34 deals
• East Elmhurst: 32 deals
• Bayside: 29 deals
• College Point & Corona: 27 deals, respectively
• Woodhaven: 25 deals
• Woodside: 24 deals
• * Just missing the top 10: Far Rockaways: 23 deals - Maspeth, Ozone Park & Ridgewood: 22 deals, respectively

How optimistic are New York sellers? Source: OneKeyMLS

Brooklyn

Brooklyn (Kings County) saw a jump in inventory and also had the largest increase in median asking price ($400K) as seen above.

Despite increased inventory and seemingly inflated asking prices, properties are selling just as quickly as they were last year. Sound familiar? Not only are Queens and Brooklyn the busiest Counties in terms of activity (new listings), but they also have some of the most competitive investors in our market.

Properties are selling for 8.5% more than they were in 2023, showing us just how desirable the borough is.

With its proximity to NYC, numerous public transportation options, and overall vibe and attraction, it is no wonder why the popularity has been reflected in the buy-and-hold rental market. Returns remain down, and cashflow opportunities are harder to come by.

Top Brooklyn neighborhoods for small multifamily opportunities:

• East New York: 35 Deals
• Cypress Hills: 33 Deals
• Bedford-Stuyvesant: 22 Deals
• East Flatbush: 21 Deals

The Bronx

The Bronx featured more new listings compared to 2023’s first half. The city’s northernmost borough dished out 652 new small multi-family listings in the first half of 2024, a 43% increase from last year’s 455 new listing total between January and July.

The Bronx also saw an 11% increase in the median asking price over the last year.

This increase in asking price did not translate to actual sale prices. Actual median sale prices are up to $850,000 from last year’s median sale price of $799,999—just a $50,000 increase year over year compared to the asking prices, which are up nearly $100,000 since last year.

Bronx properties are on the market for less time compared to last year, with the average days on market (DOM) going from 77 days (in 2023) to 74 days currently.

The Bronx neighborhoods with the most househack activity so far in 2024 are:

• Wakefield (NYC’s northernmost neighborhood!): 43 deals
• Baychester/Pelham Gardens: 39 deals
• Pelham Bay: 39 deals

Property value growth per county/borough. Source: OneKeyMLS

Nassau County

Not to be outdone by the boroughs! Nassau has seen a 45% increase in househack inventory. Long Island’s westernmost County hosted 166 new listings during the first half of 2023. In 2024, we have seen 241 new small multifamily listings thus far. The new inventory has a median asking price of $895,000, 5.4% higher than last year’s $849,000.

However, the drastic spike in inventory has been no match for Long Island’s househacker demand. In 2024, 2-4 family properties in Nassau have been sold nearly two weeks faster than they were selling last year.

Further indicating a hot market, median sale prices have increased by 11%, which is more than any of NYC’s boroughs.

The top area choices for 2-4 unit multifamily investors have been:

• Valley Stream & Port Washington: 14 deals, respectively
• Long Beach: 11 deals
• Lynbrook: 9 deals

Suffolk County

Like the Bronx, Suffolk, too, saw a 43% increase in 2-4 family inventory. Median asking prices in 2024 are at $734,950, an increase of about $35,000 from last year.

As small multi-family investors in Queens and Nassau get outpriced, they, like traditional homeowners, tend to travel East or North. We have seen a 20% increase in median sale prices in Suffolk, and the assumption can be made that this is primarily due to the eastward migration in NYC’s metro market. The median sold price soared from $600,000 last year to now $720,000 among 2-4 unit properties in Suffolk.

As seen in Nassau, the average days on market have declined by nearly two weeks!

Suffolk County’s top destinations for 2-4 family inventory:

• Patchogue: 8 deals
  Lindenhurst: 7 deals
• North Babylon: 4 deals
• Huntington; West Babylon; Sayville; Bay Shore & Greenport: 3 deals respectively

NYC Metro Demand: Average DOM. Source: OneKeyMLS

Westchester County

Westchester has seen a 52% rise in 2-4 family listing activity compared to last year. New listings jumped from 278 to 424, while listing/asking prices for these properties saw only a slight 2% increase. The median asking price this year ($799,950) narrowly beat out last year’s median asking price of $781,950.

Demand has remained high, and the average DOM is nearly one week shorter than last year’s. Small multifamily properties are on the market for an average of 49 days, compared to 54 days last year.

The suburbs are showing us a trend here! Perhaps demand is high in the city’s outskirts due to congestion and increased asking prices in the boroughs.

Median sale prices have remained upward, increasing by 4% yearly. Last year’s $730,000 median price for sold 2-4 unit properties rose to $760,000 for the first half of 2024. There is also slightly more sales activity than last year, which we did not see in any other Counties mentioned in this update. New sales in the house hack sector went from 219 last year to 224 this year.

Westchester’s most popular neighborhoods for 2-4 family properties:

• Yonkers: 85 deals
• Mount Vernon: 35 deals
• New Rochelle: 17 deals
• Greenburgh: 14 deals
• Rye: 12 deals
• * Ossining & Harrison: 10 deals respectively

Conclusion

Inventory increases across the board could signal an oncoming balanced market. Lets see if/how demand keeps up!

The main difference between this year and last year does not appear on charts or graphs. Since investors and househackers in New York are exposed to more inventory, they are seeing dozens of available properties that fit their criteria vs. just 1-2 properties a year ago.

We have more available options, which results in househack investors and homebuyers having more time to negotiate lower purchase prices, better terms, and more favorable contingencies. We also witness seller flexibility, which has not been seen for a few years. This, however, changes not only from county to county but also by neighborhood, zip code, school district, etc.

Another change we are witnessing in real-time is increased seller's concessions, which can go towards financing closing costs or buying down the interest rate. These concessions lower the cash needed to close and also lower monthly mortgage payments, which are usually the highest expense for 2-4 unit investors. Deals involving lower down payments (i.e. FHA, 203K, etc.) are going into contract more frequently than we've seen in recent years, where sellers received multiple cash offers in bidding wars.

The tide is changing. If interest rates remain above 6%, we could continue to see homebuyers and home sellers coming to terms with the ‘new norm’ in mortgage rates. Enough folks have held on for the last two years in anticipation of rates being cut in half. The Fed has yet to signal drastic rate cuts, so the higher mortgage rates seem to be here to stay for the foreseeable future.

Thanks for reading!

Abel