When do you decide if it’s time to downsize? While there might be multiple reasons, downsizing can be a practical solution to help you reach your financial goals.
However, it can also have an impact on the real estate market, especially in Staten Island.
Keep reading to learn how downsizing is impacting the Staten Island real estate market.
What is Downsizing?
Downsizing usually occurs when people get close to the age of retiring and they have an empty nest. With their children grown up, they’re left with extra space and empty rooms.
It only makes sense to sell the home and move into a smaller house to cut back on expenses.
Of course, there are other less than ideal circumstances why a family would downsize, such as divorce or loss of income.
Why is Staten Island Downsizing?
In Staten Island, the 18-45 demographic is not the majority. This statistic means the older demographic is the primary one for buying and selling real estate.
Those who own homes in Staten Island are approaching retirement age, and therefore, are ready to downsize.
As these individuals get ready to move into 1- or 2-bedroom homes, 3+ bedroom homes become available.
This shift leaves larger family homes for the younger generation to buy.
Millennials Can’t Afford Housing
Sure, the real estate market in Staten Island is booming with larger single-family homes since soon to be retired and retirees are downsizing. The only problem is that millennials cannot afford the Staten Island real estate prices.
A contributing reason why younger individuals can’t afford real estate is due to their extensive student debt. The massive amounts of debt prevent millennials from being able to afford real estate in Staten Island.
Supply and Demand Will Change
With more people in Staten Island downsizing and settling in smaller homes, it means only the less affordable homes are left on the market.
Younger people looking to buy real estate find themselves in competition with retirees who want to downsize.
With prices increasing and affordability decreasing, the Staten Island Real estate inventory will rise.
The real estate market in Staten Island is also seeing less bidding wars as a result of the rise in inventory.
This market also means potential home buyers have more opportunities to buy their first home without risk of being outbid.
However, high-interest rates have also contributed to the ample inventory. How?
A Shift in Interest Rates
Although interest rates in Staten Island were at an all-time low in past years — as low as 3.65 percent, the interest rates for a fixed rate mortgage have begun to rise. The new interest rates vary between 4.15 and 4.30 percent.
Having higher interest rates affects the market, leaving more houses available because the affordability is not there.
Staten Island Real Estate Market: The Bottom Line
The Staten Island real estate market has gone through changes due to downsizing. Some of those changes include a shift in supply and demand, higher interest rates, and fewer bidding wars.
If you’re looking for a real estate realtor in the Staten Island area, let Wonica Realtors and Appraisers give you a hand. Contact us for more information.
For more tips, check out 5 tips for a stress-free home closing.
Wonica Realtors & Appraisers are Staten Island’s #1 independent full-service real estate firm, serving the needs of the community for over 30 years. Whether you’re buying, selling, renting or relocating, our staff of highly trained professionals will provide quality realty services with personal attention to your individual real estate needs.