Spring real estate market on track to be sprung

Spoiler alert: It’s still a seller’s market

Chelsea Miller BSP Reporter

For buyers and sellers alike, real estate has always been an adventure on both the monetary and emotional fronts, full of highs, lows and everything in between. However, as most are aware at this point, the past few years in Hudson Valley real estate can best be described as the wild, wild West – complete with a metaphorical gold rush. The influx of new buyers in the area coupled with historically low inventory have had even the steeliest of buyers saddling up for the wild ride ahead.

Spring has long been considered by expert sources and data collecting sites (such as Zillow) to be the best time of year to sell, and buyers typically look forward increased options. The benefits work both ways: The seller typically achieves a higher sale price, and the buyer has the luxury of choices. However, this spring, local veteran agents are unanimous – we’re destined for yet another seller’s market as inventory, if possible, is even lower than last year. Associate broker Laurel Sweeney of Berkshire Hathaway Nutshell Realty sums up the situation. “Per the data supplied by the Hudson Valley Catskill Region MLS (essentially Ulster County), new listings were down 10.7% January 2023 compared to January 2022.” She continues, “pending sales for the same period were down a staggering 54.8%. Average median and sale price were up 7.6% and 4.9% respectively. This is completely related to the lack of inventory. As of Feb. 27, there are only 230 single-family residences for sale in the entire county and only 56 in the towns of Marbletown, Rochester, Rosendale and Wawarsing combined. These are numbers that we have seen over the past year, with no improvement in sight.”

Anne Rajs of Keller Williams Hudson Valley North agrees. “The biggest issue is the lack of inventory in every price range and every area,” she says. “Homes get listed on a Thursday for the weekend showings and have multiple offers by Monday. The local market remains very strong for the seller.” Rajs relates the lack of inventory to the issues that potential sellers face in relocating and the rise in short-term rentals. “In the natural flow of life people upsize, meaning they now have a family and need a bigger home,” she says, “or they downsize, children have moved out, they want a smaller, more manageable home. They can easily sell their existing home but where will they go?” She continues, “Unless they already have a home to go to it is a challenge for them to find something suitable and affordable. This is not an area where there are a lot of new developments being built. The influx of buyers during Covid and people purchasing homes for short-term rentals have created a serious housing shortage in the area. The positive side to this is I believe the housing prices will continue to be strong in the Hudson Valley.”

But it’s not just the lack of inventory that’s making it a tough time to be a buyer. Mortgage rates are further complicating the situation. Hitz says that changing interest rates could contribute to an ever so slight balancing of the scales. “Rates are showing some signs that they might be willing to calm down, averaging around 6.8% currently for a 30-year fixed-rate purchase,” she says. “This is cutting into affordability for some buyers, with home sales down 17.8% last year compared to 2021. Cash buyers, however, are coming in strong, and inventory is still much lower than we saw in 2021.”

Sweeney says, of current mortgage interest rates, “While this number may seem high to some, it is well below the 30-year historical average of 8%, making mortgages still affordable and buying still a good idea. The issue is with modest, first-time home buyers. With rates rising, this particular buyer may be unable to afford the increased monthly payment, preventing them from being able to purchase. This is a really tough situation for our local buyers who may have been able to save for a down payment and closing costs based on a lower interest rate.”

As for what’s on the market from a price-point perspective, Sweeney says she’s seeing listings all over the financial map. “Right now inventory in Ulster County ranges from a $70,000 mobile home in Pine Bush to a 7,000 square foot home in Saugerties listed for $4,995,000. We are seeing buyers in most price categories, with the $250,000-$600,000 market always prime. Homes ‘pending’ and under contract in the Rondout Valley number only 30 and range from a low of $90,000 to a high of $2,145,000.” Sweeney recently had a 3,300 square foot home on 5.2 acres on 159 Bone Hollow Road that sold in one day. When pressed as to why the listing sold so quickly, Sweeney explains, “My friend and client Erika Brown of Bone Hollow Studio is the developer/designer, and it was built by Hudson Valley Homes and Renovations. The home truly reflects unique, thoughtful design and construction and has many lovely custom features. The quick sale is evidence of the quality of the construction and design, which makes it stand out above other comparatively priced, newly constructed homes. Unlike a ‘ghost listing,’ which is a house to be built, the buyer could see, touch and feel this home instead of waiting for something