New York Househack Update: 2024 Market Snapshot for 2-4 Unit Properties
Intro & Overview
We are halfway through 2024, it is only fitting to see how the New York househack market has played out thus far. 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 have a good sense of whether those predictions were on point OR way off!
In Real Estate, market predictions take time to materialize as the sales cycle for properties takes several months, unlike stocks, which can be traded in a matter of minutes. This makes it challenging to determine and predict where and when the best small multifamily opportunities will present themselves. In our comprehensive market update, we look to shed light on how the market has changed since the first half of 2023 and what that means for new and experienced real estate investors.
What, Where, and Why?
This update compares the first half of 2024 to the first half of 2023. We will specifically examine the volume (number of properties listed and sold), Days on market (DOM), median asking (list) prices, median sales prices, and the neighborhoods with the most activity.
We will be focusing on the NYC Metro Area. Specifically, the counties of Queens, Brooklyn (Kings), The Bronx, Nassau, Suffolk, and Westchester. For each county, you’ll learn which particular areas have the most househack opportunities.
Our team focuses on working with real estate investors of all experience levels. Whether you want to sell your current small multifamily home, offload more of your investment portfolio, acquire your first property, or simply gather information, we pride ourselves on informing and educating our base.
The 2-4 family investment strategy is not new. My family has used this strategy for 3 generations as have many others! This property type is a main target for many who are looking to begin their investment journey because it allows investors to get in the game with a down payment as low as 3.5%. This is why house hacking is one of the hottest topics discussed throughout the BiggerPockets forums, webinars, podcasts, and other publications.
Knowing what is happening in the current market and understanding which direction the market is trending in can equip you with key insights to assist in the decision-making process. Investors, both new and experienced, often ask themselves (and ask us), ‘What should I do next?’ The answer is dictated by the investor’s current debt-to-income income ratio, long-term goals, interests, and the current direction of the real estate market.
This update aims to inform, encourage, and clarify real estate investors who are navigating New York’s fast-paced market. Some househackers prefer to be in prime locations (A, A-, and B+ neighborhoods) where they currently rent for upwards of $4,500 per month. Such locations have lower inventory, higher asking prices, and slower/steadier annual value growth.
Other househackers want to buy in up-and-coming neighborhoods with slightly lower price points than the prime areas. Some investors prefer to get into the median-price-point neighborhoods, which have a lower barrier to entry and require fewer funds upfront.
Regardless of preference and strategy, this guide 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…
Let us get into the different markets, beginning with “The World’s Borough”, Queens.
Queens Real Estate: House hack opportunities
Despite inventory increasing by 68% year over year (YOY), median sale prices for 2-4 family househack properties rose in Queens. Last year, the median sold price was below the Million Dollar mark at $999,500. Compare that to a median price of $1,060,000 this year, marking a 6% increase YOY.
This sale price increase is closely comparable to the 5.5% increase in seller asking prices. In 2023, the median asking price for homes listed on the market was $1,148,000. The actual sales price for the properties was about 11% lower, which could indicate this year’s trend. Median asking prices in 2024 so far are at $1,200,000.
The average days on the market (DOM) remained relatively unchanged. In 2023, the DOM was 87 days; this year, properties are staying on the market for an average of 88 days. Properties are selling as quickly this year as last year despite interest rates remaining high and asking prices increasing by 5.5%.
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
Brooklyn 2-4 family investments
Like Queens, the number of Brooklyn househack opportunities has soared in 2024. For the first half of 2023, we saw 429 new 2-4 family listings. Compare that to 746 this year, a nearly 74% increase, and you’d think we were in a full-blown buyer’s market.
Right?…
Not necessarily!
Brooklyn small multifamily investment property owners and their brokers understand that demand is still high—the average DOM is 89 days, exactly the same as 2023’s first half. Since demand has remained high, landlords/investors this year listed their 2-4 family properties at an average of $400K higher than last year!
Along with the higher listing prices, we have also seen the median sales price climb by $85,000 since 2023. The median sales price for the first half of last year on 2-4 family properties was $994,000 and has jumped to $1,080,000 in 2024.
Top Brooklyn neighborhoods for small multifamily:
- East New York: 35 Deals
- Cypress Hills: 33 Deals
- Bedford-Stuyvesant: 22 Deals
- East Flatbush: 21 Deals
Househacking in The Bronx
Continuing the Queens and Brooklyn trend, the Bronx also featured more new listings compared to 2023’s first half. Househackers rejoice! 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. The median asking price for 2-4 family Bronx properties went from $850,000 (2023) to $949,000 (2024).
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. The Bronx is not alone, as shown in the previous section, Brooklyn saw similar results.
So what is the current demand for Bronx 2-4 family properties? Bronx properties are on the market for less time compared to last year, with the average 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
Nassau County 2-4 family property market
Not to be outdone by the boroughs! The first New York suburban county on this market update, 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. The average DOM in 2023 was 83 and is now 71 days. Properties were nearing the 3-month mark and now take closer to 2 months to sell! This should not come as a surprise since many parts of Nassau County have a less than 1 hour commute time to NYC.
Further indicating a hot market, median sale prices have increased by 11%, which is more than any of NYC’s boroughs. This year’s $852,500 median sale price for small multifamily properties is $87,500 more than 2023’s median price of $765,000.
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
Small multifamily market in Suffolk County
Rounding out the Long Island market, we have Suffolk County’s househack market update. Like the Bronx, Suffolk, too, saw a 43% increase in 2-4 family inventory. New small multifamily listings during the first half of this year totaled 110 compared to 77 during the same period last year. 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 for these properties, 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! Properties in this asset class are now on the market for an average of 53 days, compared to 66 days in 2023.
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
Westchester House Hack Overview
Home to some of NY’s most scenic and iconic neighborhoods within 1 hour of NYC, Westchester County rounds out our market update. Some househackers in New York prefer to go North of the boroughs to find deals rather than traveling East.
Luckily for those investors, 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.
While researching this, I thought all signs were pointing towards a cooler market. To my surprise, 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! In this update, there were almost two-week declines in DOM for all 3 suburban markets, compared to more modest 1-3 day declines in Queens, Brooklyn, and The Bronx. 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. Balanced markets have an absorption rate of 4-6 months. Given the current market demand, the absorption rate tells us how long it will take for all housing inventory to be sold. Most investors would love to see a buyer’s market, which would mean we have 6+ months of inventory on the market.
Are we there yet???
Not necessarily. While inventory spikes are a precursor to balanced and buyer’s markets, our data shows sales prices have not yet declined, and properties are not sitting on the market for extended periods. With median home values increasing and DOM remaining relatively similar across most of the counties in our service areas, we are still in a seller’s market.
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 our clients 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.
Specifically, we see clients purchase multifamily properties with 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 Federal Reserve chairperson has yet to signal drastic rate cuts, so the higher mortgage rates seem to be here to stay for the foreseeable future.
What does this mean?
Time to state the obvious… ‘I don’t have a crystal ball’; if I did, I probably wouldn’t be writing this article! Here is what I think this all means for the NYC Metro area and the New York house hacking market…
- Sellers will come to terms with flattening annual appreciation and begin pricing their properties more accurately to reflect demand and pricing trends. Savvy home sellers and investors will price ahead of the market rather than behind. This does not, however, mean that we’re in for a steep decline. Data shows that current demand has been meeting this supply surge, as reflected in the average days on market.
- Since price growth will slow down, property owners will realize that the top of the market is behind them, leaving them with the decision to sell their homes before reaching the near bottom of the market. This means that many who were on the fence or ‘waiting for the right time’ will continue to put their properties on the market. The question remains: will we continue to see 70% increases as we saw in Brooklyn, 40-50% increases as shown in other counties, or less?
- Real estate investors who are actively searching for their next property will have more options to analyze, and place offers on. This is a numbers game, so the more properties you bid on, the more likely you are to land a great deal!
- Hesitant homebuyers and less motivated investors will see more options hit the market but will be held back by the idea that the market shift has yet to begin. Metrics like DOM and median home sales will be misleading to the untrained eye. These folks will likely opt to wait a while longer to either see a significant drop in median sale prices OR wait for interest rates to come back down to 3, 4, or 5%.
- Properties with value-add potential will continue to interest investors with
Thank you for reading, and please stay tuned for future market updates from the REbuild Real Estate Team!
Data Source: OneKey MLS
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2024 Real Estate Recap: NY 2-4 Family Properties - Rebuild
February 3, 2025[…] 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 […]