But a shortage of inventory is limiting sales
NEWBURGH (Jan. 29, 2019) – The real estate market in the Hudson Valley is on the upswing, with rising prices and increased sales over the last five years fueling the best housing market since the doldrums of the last decade.
But a shortage of inventory, or “fuel for the fire,” is limiting sales even as high demand and tight supply is driving prices up across the nine counties of the Hudson Valley, said Joseph Rand, managing partner and general counsel at Rand Realty–Better Homes and Garden Real Estate, which partners with the Center for Housing Solutions and Urban Initiatives to provide insight into regional housing market trends. The Center is a unit of Hudson Valley Pattern for Progress.
“That said, sales are relatively robust from a historical perspective, reaching levels they have only previously hit during the height of the last seller’s market in 2005-2006,” said Rand.
The Center for Housing Solutions and Urban Initiatives’ winter 2019 update shows that since 2014, the median sale price of homes (single family, condos, townhouses) has increased across the Hudson Valley, which includes the counties of Westchester, Rockland, Orange, Sullivan, Ulster, Putnam, Dutchess, Greene and Columbia.
Six counties witnessed double digit increases, with Columbia leading with a 23.8 percent rise over the last five years, or $46,000. Westchester had the lowest increase at 5.3 percent, or $25,000.
The percentage of list prices received by sellers jumped 2.2 percent to a regional average of 96.3 percent.
All counties also saw an increase in the annual median sale price over the last year, except for Columbia, which declined by 1.9 percent. Dutchess witnessed the highest year-to-year increase – 8.5 percent – followed by Putnam at 6.6 percent. Westchester had the lowest increase of 2 percent. Even with these increases, prices have not recovered from the correction triggered by financial crisis of 2008-2009 and are well below the height of the last seller’s market, said Rand.
The percentage of closed sales rose in every county in the five-year period from 2014 to 2018, with Orange County leading the pack with an increase of 72.9 percent. Overall, housing sales rose by nearly 30 percent region-wide, or 5,800 homes.
Year-to-year closed sales, however, dipped between 2017-2018, with five of the nine counties showing a decline. These can be attributed to an increase in sale prices and interest rates, as well as fewer homes on the market.
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.
As a region, inventory dropped by almost 13 percent, or 1,600 homes in the three years since 2016. The rate of decline slowed in 2018, with slightly more homes available than in the previous year.
“If the downward trend in inventory continues and the percentage of list price received increases, there is a higher likelihood of continued pressure on pricing, which has the potential of igniting bidding wars,” 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.
Despite the improving market, predictions for 2019 are difficult to make as the impact of SALT (State and Local Tax) deductions and the possibility of rising interest rates cloud the forecast.
Rising median home prices, low inventory and increases in the percentage of the list prices received is good news for homeowners. But this trend poses a challenge for those looking to buy a home, especially for first-time buyers with low savings due to high rent and student loans.