Home sales contracts are being canceled at a new record rate. A trend likely to snowball even more due to a blizzard of tax increases on property owners.
How is this going to impact you as a property owner, or if you were hoping to sell your home or business property on Long Island.
Home Sales Are Spiraling
According to the Long Island Business Network (LIBN), home sales have been spiraling downwards for the past six months. Now on an annual pace for more than 2M fewer home sales in 2022 compared to last year.
Not only have home sales fallen by a national average of 20% from last year (and 30% in some regions), home price growth has been cut in half too.
Pending home sales data suggests we are going to see an even steeper drop in the next few months. These trends are likely to be compounded by a new record high number of home sales contracts being canceled and failing to close.
This number has been increasing according to Redfin. With 16% of home sales contracts failing to complete. That’s the most since we were in the pit of COVID lockdowns and the world was in complete chaos in 2020.
Why Is This Happening?
The most obvious reason is that inflation and the recession are hitting consumers so hard that they cannot afford to buy homes any more.
Rising interest rates, new taxes, and higher taxes are disqualifying the few potential buyers who are still interested. Their incomes are being drained, and sky high property taxes are turning them off.
That’s aside from all the layoffs happening, and business owners having to shed premises to keep up.
Mortgage lenders are also getting scared, or are pulling back on funding as they try to balance their own accounts, and fear taking losses on declining property values.
What You Can Do About It
This data and these trends are worrisome as a property owner. If you are trying to sell your home it means fewer buyers, and declining chances of actually closing if you do get an acceptable offer.
If it falls apart and you have to start over again, your home could be worth even less at that point.
If you can’t sell, and refinancing is becoming harder and more unlikely than ever, you can find that you are saddled with rising costs of keeping that property, while its value goes down, and you are watching your equity evaporate more each and every day.
One of the best things you can do is to challenge and get your property tax assessment and bill reduced. This will make your property more affordable, attractive, and competitive for buyers.
If you are staying this will enable you to reduce your overall housing costs and stay more comfortably financially.