Hudson Valley housing prices exploded in 2020. What happens now?:
https://www.timesunion.com/hudsonval...ness-spotlight
"In the late summer of 2019, when the word "pandemic" was most likely to call up images of the Spanish flu or the Black Death, the average house in Greene County sold for $185,000, according to figures from Hudson Valley Pattern for Progress.
Three years later, in the late summer of 2022, the average home sold for $330,000 — an increase of 78 percent.
But as interest rates rise, will this trajectory be sustainable? Will it plateau? Or will there be a dreaded crash?
Gary DiMauro, the executive vice president at Four Seasons Sotheby's, which sells high-end homes throughout upstate New York, called price increases in the Hudson Valley's housing market during the pandemic "unheard of in U.S. history."
The tale is by now well-known: The mad rush to escape the petri dish of New York City resulted in bidding wars for properties, often between cash buyers, that jacked up housing prices as demand lapped supply. Hudson and Kingston's metropolitan areas (which included all of Columbia and Ulster counties, respectfully) had the biggest jump in net in-migration in the entire country, according to a New York Times analysis.
However, housing prices were rising all across the nation. According to the National Association of Realtors, for the three years ending in June 2022, the median sales price for an existing home rose 46 percent — far less than in the Hudson Valley, but still at a historical clip.
But rising interest rates have dampened the fire. To fight inflation, the federal reserve raised interest rates seven times in 2022, bringing the number up from near zero, where it had sat since the early weeks of the pandemic.
Nationally, the increases are having their desired effect. After peaking in June at $420,900, the median sales price for an existing single-family home fell almost 11 percent, to $376,700, by November, according to the National Association of Realtors.
The Hudson Valley has begun to feel this slowdown, too.
DiMauro said it began early last fall as rising sales prices and interest rates made bidding wars less common, until they are now reserved for the most desirable turn-key properties.
In Dutchess County, the median sales price for a home still rose from the third quarter of 2021 to the third quarter of 2022, but only by 5 percent, according to sales figures compiled by Hudson Valley Pattern for Progress — far slower than the 15.7 percent prices rise in the 12 months prior. The "housing inventory" — how long it would take to sell all available houses on the market — also rose slightly in the county, from 3.4 months to 3.6 months, indicating a slight waning of demand.
Professor Marc Norman of NYU's Schack Institute of Real Estate said a lack of construction contributed to the surge in housing prices nationwide.
"We were underproducing housing even before the pandemic," he said. "Almost everywhere has had constrained supply because we've been underbuilding since the 2008 (financial) crisis."
This underbuilding will act as a "buffer" to falling prices, Norman added. "You just can't have the increase in supply, in the Hudson Valley specifically, in time to meet the demand. I don't think there will be a crash because of this pent-up demand."
Are Hudson Valley housing prices sustainable?
New York City residents who moved to the Hudson Valley during the pandemic have "been moving dollars but not jobs," Norman said, as many continue to work remotely. And people who moved to the region "can be just as fickle and go to Vermont or go to another region that's farther away and cheaper," he said.
Norman, who has consulted with the city of Hudson and other communities on housing, said he also feared housing prices would continue to increase, and the region to experience a housing crisis similar to Martha's Vineyard or Cape Cod, whose economies are based on vacationers and second-homeowners.
Adam Bosch, the executive director for Hudson Valley Pattern for Progress, said that 20 to 25 percent of home purchases in the Hudson Valley were made in cash as recently as last spring.
Pattern for Progress expected housing prices in the region to begin to fall in the early months of 2022, but they still continued to rise, Bosch said.
"All the way through September, prices were still increasing across the region," he said. "The number of closed sales did drop significantly, but that's not because of a lack of demand — there's still a huge demand for housing — but what ended up happening was we ran out of supply."
A healthy housing market has six months of inventory. In the third quarter of 2022, all counties in the region other than Sullivan had fewer than six months of inventory, with Orange County only having 2.7 months' worth of homes on the market, according to Hudson Valley Pattern for Progress.
The Hudson Valley's housing market was not "following the typical supply-and-demand economics," Bosch said, because the glut of demand was not being followed by an increase in supply. He cited a few reasons for this: the high cost of building materials, a lack of construction labor and zoning in Hudson Valley communities that discouraged additional construction.
Still, Pattern expected housing prices to come down in the Hudson Valley in 2023, with the pace of the downturn determined by interest rates, new home construction, and whether homeowners were putting their properties on the market. The "crystal ball" question was whether they would fall less than the country as a whole, or at a similar rate.
Sandra Park, a Hudson Valley realtor who produces the regional real estate newsletter The Brick, said prices in the Hudson Valley could not go up forever.
"There is absolutely no historical pattern to suggest that we could sustain the trajectory that we had been experiencing," she said. "None."
Still, there would be no housing crash in the Hudson Valley, according to Park, but "a leveling off," something already being seen in Dutchess County, which had price increases over the last year more in tune with appreciation seen in 2018 or 2019 than during the pandemic.
Sellers who priced their homes in line with the appreciation seen during the "wild west" of 2020 and 2021 would most likely have to lower their sales price, but Park liked to remind clients their homes would still be selling for far more than before the pandemic.
DiMauro said housing prices would not take the hit in the Hudson Valley that was expected nationally, but that there would be a leveling off, though prices could continue to rise by a few percent a year.
Bosch said he could not say how much prices would go down in the future, but that the rapid rise in prices has had some negative effects in the region.
"Over the past few years in your neighborhood, you had a better chance of not being able to afford a house than you had in the past, and that's not great if we want people to stay here, that's not great if we want people to have two-to-three kids instead of one kid, that's not great if you want to be sure we can house the workforce for all these companies were trying to attract to the region," he said.
This issue can be seen in Columbia County, where a study last spring showed the average wage-earner could not afford to buy a home in 16 of the county's 19 municipalities."
Also, STATE APPROVES SITING PERMITS FOR SOLAR PROJECTS IN CORTLAND, JEFFERSON COUNTIES:
https://www.cnybj.com/nys-approves-s...uary+9%2C+2023
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