2024 Real Estate Recap: NY 2-4 Family Properties
Intro
We’ve passed the 2024 market predictions, inflation, unstable market activity, policy changes, NAR settlement, election, and Holiday Season. In this blog, REbuild aims to share data and thoughts related to the New York 2-4 family property market.
Market predictions take time to materialize in Real Estate, as it can take 3-6 months for transactions to close. This sales cycle is unlike stocks, which investors can trade in minutes and seconds. Timing the housing market can, therefore be challenging for investors.
In our NY 2-4 unit market update, we examine whether and how the market has changed and what that means for new and experienced real estate investors.
2024 NY 2-4 Unit Real Estate market, whatever happened there
Mortgage interest rates
According to Freddie Mac, during the first week of 2024, the average U.S. mortgage rate for a 30-year fixed mortgage was 6.62%.
The rates reached 7% in April and peaked in early May when the average rate rose to 7.22%.
From Thanksgiving to Christmas 2024, the rates hovered around the same 6.6% mark we saw as we kicked off the year.
2024 finished with the U.S. average rate going up to 6.85%.
Real Estate’s Rollercoaster in 2024
Quick National Recap
National Residential home values rose by 4 – 4.5%, depending on which publication you’re reading.
Commercial and large multifamily real estate is crashing, according to BiggerPockets. Sales prices per commercial unit have dropped 15% since 2022. Increased multifamily inventory has led to increased vacancies. With vacancies going up in the large multifamily sector, landlords are offering more incentives and concessions, which decreased their rental income.
National rents for Residential Real Estate (1-4 Units) increased by 5%, exceeding the inflation pace. We typically see 3-4% annual increases in residential rents.
The National Association of Realtors (NAR) settled to resolve a series of class-action lawsuits. Realtor rules were re-written, resulting in more client-agent transparency when discussing commissions. This settlement has not significantly impacted the values, home prices, or average total closing costs for buyers and sellers.
2-4 Family New Listing Inventory in NY jumped up 43-74%
New York house hack Inventory was up considerably by the halfway point of 2024.
Queens and Brooklyn saw 68% and 74% increases, respectively. The Bronx (43%), Westchester (52%), Nassau County (45%), and Suffolk (43%) all saw significant increases in new listing activity for 2-4 family properties.
This initial surge in Listings For Sale seemed like an excellent opportunity for buyers and could have even signaled the beginning of price corrections in New York. As the fall and winter months approached, inventory slowed down to end the year with inventory levels comparable to 2023.
Good news for home sellers & other property owners in Queens, Brooklyn, The Bronx, Westchester, and Long Island: values continued to rise in 2024 despite more competing homes for sale.
2-4 unit multifamily in The Boroughs of NYC
Queens
Halfway through 2024, we saw the number of Queens househack listings increase by nearly 70% compared to ‘23! Due to this inventory spike, one would expect more sales activity. The results contradict what REbuild believed – we expected to see MORE deals done. Instead, there was a slight (1.2%) decrease in sold properties in 2024.
Values also went up… Slightly.
The average sale price in Queens rose 3.6%. This showed slower growth than the national average, making it 1 of just 2 Counties mentioned in this report with below 4% growth.
New construction househack sales, however, saw a very active year. There were 65 newly built small multi-family homes in Queens—a whopping 59% increase from 2023. Will increased construction costs slow the trend in 2025? Leave us a reply at the end of the article!
Other notable Queens 2-4 family property Statistics:
- The median lot size for sold properties in 2024 = 2,600 sq. ft.
- The average days on market (DOM) and price per square foot (ppsf) saw minor/insignificant changes when compared to 2023
- 4.8% = the average discount for small multifamily properties. Does this mean 10% discounts are impossible? Not necessarily… sellers are typically ready to make a deal. The market (aka buyers) will decide what a competitive offer looks like, and the seller will determine the discount.
Brooklyn
Kings County, aka Brooklyn, is next up.
Like its neighbor, Queens, Brooklyn’s 2-4 family property values couldn’t keep up with the National Average. House hack properties saw just a 2.1% annual increase from ‘23-’24.
The slow value growth results from buyers seeing more 2-4 unit supply during Q1 & Q2.
Despite that data, it was still a HOT year for Brooklyn househack deals.
- Properties SOLD a full 1-WEEK FASTER in 2024 than they did the previous year. The average DOM dropped from 91 days to just 84 in ‘24.
- New Construction activity heated up as the number of newly built househack properties sold in Brooklyn tripled this past year.
- Although Brooklyn property values didn’t significantly change, space in the borough DID get more expensive. The average price per square foot shot up 21% from $483.35 in 2023 to $585.10 per square foot in ‘24.
If lot size is important to you, consider that Brooklyn properties (average lot = 2,000 sq ft) are nearly 25% smaller than Queens properties (average lot = 2,600 sq ft).
The Bronx
Finishing our review of the NYC househack options, we’ll look at The Bronx next. The New York Yankees might have lost the World Series in ‘24, but The Bronx househack market won the title of highest appreciating borough!
- In 2024, NYC’s northernmost borough saw a 6.1% year-over-year increase in the average sale price for 2-4 unit buildings.
- Bronx properties also sold nearly 1 week faster than in 2023, going from an average DOM of 74 days to just 68 days in ‘24.
- For sellers, they took home 97.4% of their original asking price compared to 96.6% last year. The average negotiated discount of just 2.6% was the lowest among the boroughs. Buyers beware!
- The median lot size for Bronx househack properties is 2,500 square feet, narrowly behind Queens.
Shopping for a 2-4 family property in the Bronx will give you the best NYC value (Average Sale Price < $900,000) compared to Queens & Brooklyn, which both have Average Sale prices north of $1.1M.
2-4 Unit Multi-family Investing in the Suburbs of NYC
Westchester
Just North of the Bronx, we have picturesque Westchester County. While it is home to affluent and pricey areas such as Bedford, Scarsdale, and Harrison, Westchester is one of the NYC Metro Area’s most affordable counties for house hackers.
- With an average 2-4 family sale price of $802,000, Westchester is just 2nd in affordability to Suffolk County.
- This relative affordability could result from more inventory and more properties selling in 2024. We saw a nearly 11% increase in sold 2-4 unit multifamilies in ‘24.
- For sellers, the market reacted well to Westchester househack opportunities:
- The average property sold for 1.3% ABOVE the asking price, making it the 2nd hottest county by this metric (keep reading to find out which was the hottest of all counties)
- 2-4 family properties sold 1 week faster than they did in 2023, as the average DOM dropped from 56 days in 2023 to 49 days in 2024.
- Average sale prices for househack deals in Westchester went up $43,000 – a 5.6% increase year over year! That’s right, this suburb is growing at a faster pace than Brooklyn AND Queens, which is where many new Westchester residents move from.
- The average price per square foot rose 10%
- New construction sales more than doubled compared to 2023
As is consistent with most suburbs of NYC, the median lot size in Westchester (4,909) is nearly double the median in the neighboring Bronx.
Nassau County
Traveling southeast from Westchester, we arrive on Long Island! (Not “In” Long Island… IYKYK!). Lets begin the Long Island househack review with the home of Hockey’s New York Islanders, Nassau County.
Less 2-4 family homes sold in Nassau than in 2023 as we saw a 9.9% decrease in sales activity in 2024.
Demand remained incredibly high and led to some interesting results:
- The average Nassau county househack deal in 2024 sold for $108,000 MORE than 2023’s average.
- The increase in average sale price was 13.9%, well above any other county mentioned here!
- Properties sold 1 week faster on average than they did the previous year. Same result as seen in Westchester and Brooklyn (Kings) Counties.
The median lot size for small multifamily properties in Nassau County is 5,388 – more than double the lot sizes in Queens, Brooklyn, and the Bronx.
Suffolk County
Last but certainly not least, we have our Easternmost County – Suffolk County. Suffolk County house hacking was just as challenging for buyers as it was fruitful for sellers in 2024.
As seen with its Long Island neighbor, Nassau, sales activity dropped in Suffolk County. There was a 7.3% decrease in 2-4 family properties sold.
Multifamily property owners don’t want to sell, and the ones who do sell have plenty of bidders to choose from. The effects of this lower real estate activity could support the argument that Suffolk County is NYC Metro’s hottest house hack market!
- Properties sold nearly 3 weeks (20 days) FASTER in 2024. The average DOM went from 70 days down to just 50 days!
- Great news for investment property owners in Suffolk – the average property sold for 1.5% ABOVE the asking price, giving Suffolk the best ratio of all counties referenced in this article.
- The average price per square foot (ppsf) went from $316.50 per sq ft to $364.42 per sq ft in 2023 and 2024, respectively – a 15% increase!
- Perhaps one last feature contributing to Suffolk’s househack appeal – the average Lot Size of a 2-4 unit property is nearly .25 Acres (10,500 sq ft). New Yorkers want more land, and there is no better proof than looking at Long Island Real Estate sales statistics.
Which County do YOU think was the hottest in 2024?? Leave a reply below!
NY 2-4 family property investing in 2025
Financing a 2-4 Unit property in New York
Many interested in the real estate market are waiting for the next Fed meeting (or looking back on the most recent one) to anticipate significant interest rate changes ahead. Mortgage lenders, however, are looking at additional market factors, including:
- Unemployment rates
- Bonds i.e., 10-year treasury note
- Inflation
In just the first few weeks of 2025, investor-friendly lenders in our market have seen rates steadily climb to their highest since the Summer of ‘24. Lenders cite low unemployment data and high inflation as 2 of the contributing factors. This recent surge in interest rates has immediately impacted the offers submitted by investor clients.
Thankfully, New York is an attorney state which means that initial offers are NOT legally binding. Why is this important to note here? …
Investor Tip: If you submit an offer on a property and rates spike drastically, you can either back out of the deal entirely OR change your offer. Either option can be exercised before leaving a deposit or signing a contract. If the mortgage rate increase negatively impacts your projected cash flow, rerun your numbers and resubmit your offer with a purchase price and terms that work for you.
In 2024, the average 30-year fixed mortgage rate was 6.72%. Leave us a reply below and let us know where you think rates will average out this year.
It is important to note that the Federal Reserve’s decision to reduce, increase, or leave rates unchanged does not always have an immediate effect on mortgage interest rates. We recommend speaking with your lender when you have questions about your best loan options, current rates, monthly mortgage payment estimates, and more.
2025 Predictions for New York 2-4 Family Properties
Real Estate Values
Inventory started hot as we saw an 8% increase in inventory to kick off January 2025.
With interest rates appearing to stay above 6% for the foreseeable future, NY sellers and buyers will come to terms with the market and find some common ground when negotiating househack deals in 2025.
Here is what that prediction means: Serious sellers will agree to more realistic asking prices when listing their properties on the market. Buyers will negotiate according to what is trading in that area vs. slashing asking prices by 10-15% on offers.
Some buyers and sellers who are NOT serious or committed to closing a transaction will continue on the same path as any other year. Non-serious buyers will submit unjustifiable lowball offers without supporting data (i.e., comps), and non-serious sellers will inflate their asking price well above the value of any similar [sold] properties.
As mentioned earlier, all counties had an average sale price of 95% (or more) of the original asking price – with Westchester and Suffolk each having an average sale price HIGHER THAN the asking price. We expect that trend to continue into 2025 and predict the following 2-4 unit average sale price value changes per County:
- Queens: ⬆️3.2%
- Brooklyn: ⬆️3.5%
- Bronx: ⬆️6%
- Westchester: ⬆️6.5%
- Nassau: ⬆️7.5%
- Suffolk: ⬆️7%
Inventory and sold properties (sales activity) will increase in 2025 but not to a degree that lowers or even flatlines property values.
Demand / Days on Market
Competition will remain strong. There is pent-up demand throughout the country, but New York is on another level! There are dozens or hundreds of potential buyers for any property in the NYC Metropolitan area.
The average New York househack property goes under contract in less than 3 months and, in some areas (Westchester and Nassau), less than 2 months! This may seem like a lot of time to negotiate a deal, but negotiations often begin weeks before a property is under contract. Some properties may be listed as active (on the market) with an accepted offer, a half-signed contract, and several backup offers.
To avoid being late to the party, begin the initial stages of negotiation as soon as possible to have the best chance at landing a good deal. Initial stages include requesting building financials, confirming rent rolls, scheduling a property tour, submitting a non-binding offer, etc.
We predict the Average Days on Market (DOM) for each county in 2025 will be:
- Queens: 75 days
- Brooklyn: 70 days
- Bronx: 70 days
- Westchester: 45 days
- Nassau: 55 days
- Suffolk: 45 days
Outro
As we reflect on 2024, it is clear that New York’s Metro Area showed remarkable resilience amidst factors that could have signaled a market correction for 2-4 family properties. These factors included mortgage interest rate increases as high as 7% and increased seller competition from rising inventory levels… not to mention this all took place during an election year.
These conditions, however, didn’t slow down the househack market! In all counties, except for Brooklyn and Queens, we saw price growth that soared above the national average. The Bronx showed the sharpest increase in 2-4 unit property sale prices in the boroughs. In the suburbs, property values soared as high as 13.9% while the average days on market dropped 1-3 WEEKS from the prior year.
With demand continuously growing, investors and traditional homebuyers are advised to act quickly and decisively. This recommendation does not mean we should sprint blindly into bad deals. Instead, investors should aim to have the first substantial negotiation with a seller so that any subsequent offers can remain on the back burner.
Relationships in this industry are key, and although we are talking about numbers and terms, property owners are still vested in the ‘close ability’ of a deal… they want to know who can talk the talk AND walk the walk.
Sellers may only have one shot at choosing the right buyer, so they’ll want to know about financial credentials, desired closing date, finance/loan type, and other contract terms. By being one of the first to place an offer, you can learn much about the seller’s current situation and cement yourself as a viable candidate.
As mentioned earlier, New York is an attorney state, which means that sellers and buyers will seek counsel to draft and execute a sales contract. For buyers, your initial offer can be rescinded anytime and is NOT a legally binding contract.
New York Property Seller Tip: You should not stop negotiating and entertaining back-up offers until a buyer signs a formal contract and leaves a deposit. Let other investors tour your property until you have a half or fully-signed sales contract.
This upcoming year in New York could be filled with surprises in the 2-4 family housing market. We look forward to sharing our mid-year updates to see how our predictions play out.
Until then, Let’s Build!
