NEWBURGH (April 30, 2019) – Ten years after the financial crisis and the housing crash, the real estate market is coming back with rising prices and low interest rates. But while a seller’s market may exist, the reality is a little more complex.
To help buyers and sellers navigate the market, Joseph Rand, managing partner and general counsel at Rand Realty–Better Homes and Garden Real Estate, highlights seven trends to watch this year. Rand Realty partners with the Center for Housing Solutions and Urban Initiatives, a unit of Hudson Valley Pattern for Progress, to provide insight into regional housing market trends every quarter.
- Sales are up and are close to the last seller’s market of 2002
- Inventory is down, but stabilizing, which means sales may increase now that there is more “fuel for the fire”
- Prices are trending upward, but have been slow to appreciate in most of the region
- The SALT cap has had a meaningful impact on the high-end real estate market
- The seller’s market indicates prices will appreciate over the next five months
- Despite a recent uptick in interest rates, they are at near historic lows
- Homes are more affordable than they have been at any time in the last 30 years
“We’re not saying that homes are cheaper than they’ve ever been,” said Rand. “We’re just saying that if you control for inflation, the monthly payment you need to make to buy the average-priced is about as low as it’s been in a generation.”
The Center for Housing Solutions and Urban Initiatives’ spring 2019 newsletter also offers readers a comparison of homeownership affordability between 2008 and 2018.
The analysis shows that while Sullivan was the only Hudson Valley county in 2008 where median-priced homes were affordable to households with the average median income, affordability expanded in 2018 to include the counties of Orange and Greene. A home is considered affordable when a household pays no more than 28 percent of its monthly income for housing costs.
By that measure, Columbia, Dutchess, Putnam, Ulster, Westchester and Rockland continue to be unaffordable in 2018. Columbia, Ulster and Dutchess residents on average pay between 28 percent and 30 percent of their income on housing, while Putnam at 32 percent and Rockland and Westchester at about 40 percent makes these counties still out of reach for households with an average median income.
“The 2018 housing market compared to the pre-recession market of 2008 shows signs of greater affordability in many Hudson Valley counties,” said Joe Czajka, senior vice president for research, development & community planning at Pattern and executive director of the Center for Housing Solutions and Urban Initiatives. “However, there are still challenges to homeownership such as cash for the down payment and closing costs. Coupled with student debt and high real estate taxes – first-time homebuyers in particular have greater barriers to overcome.”
As challenging as homeownership appears in parts of the Hudson Valley, there are mortgage products and programs available for first time buyers that make homeownership achievable.
According to data provided by the New York Association of Realtors, the number of closed sales in the Hudson Valley in the first quarter of 2019 is remarkably weaker than in the first quarter of 2018, except for Rockland County, which shows a 7.6 percent increase.
Four counties witnessed double digit decreases in closed sales, with home sales in Sullivan County dipping 19.7 percent over the first quarter of 2018. Green showed an 18.8 percent decrease while Columbia fell by 14.9 percent and Putnam fell by 11.7 percent.
The median sales price, however, has increased in every county in the Hudson Valley, with Sullivan seeing a 27.5 percent increase over the first quarter of 2018 and Greene home prices increasing by 24.3 percent.
A lack of inventory remains one of the bigger challenges in the Hudson Valley’s housing market. Since 2016, inventory has declined in every county except Sullivan.
About Hudson Valley Pattern for Progress
Hudson Valley Pattern For Progress is policy, planning, advocacy and research nonprofit that has promoted regional, balanced and sustainable solutions for the Hudson River Valley since 1965. Visit Pattern-For-Progress.org. Follow us on Twitter at @HVPattern. Like us on Facebook and follow us on LinkedIn.