Happy Summer!
Little break in Italy coming with the eye of the storm that’s been looming around the real estate industry expected to come in right about when we return so I’m leaning in on this trip. I’m holding gratitude for strategic packing and planning as major walks with what I’m certain will seem like a dresser on my back is not high on the list. Hope you’re all enjoying the summer!
Inventory has been correcting, but it’s still low and less buyers continue to be in the market as has been the case since interest rates began their elevation in 2022, but we still are in a sellers market. It’s not what it was. In fact, it seems every other email lately has a new spin on how to put “price reduction.” We have been riding the tailwinds of this sellers market for a while. This is all about supply and demand. There are definitely people holding back on selling. There are also houses that are still flying off the shelf. Buyers have become more discerning, though. They want toilets that flush these days – they may even check it twice.
I have had multiple sellers recently close that purchased less than two years ago. Real estate is a pillar long term investment, but in more ordinary markets, two years is generally not enough to recoup closing expenses. One of my clients went over asking and recouped closing expenses. The other had deferred maintenance that carried over from when the sellers bought the house and had an inspection that apparently missed some needed and pricey repairs (the sellers were not my clients when buyers).
They sold for $13,000 below their purchase price. IMHO, they paid over market value when they purchased, which didn’t help matters. This was my first client in four years that sold under asking (although my suggested range to them was actually in range with what it ultimately sold for). Generally speaking, some houses have been selling under asking quietly in sidelines all along.
Believe it or not, we are on the cusp of Fall Market. We have an election year Fall which historically the real estate market is slower in election year during the fall and then tends to rebound in the upcoming year. I do expect a pop in September, but it will likely slow from there through January. If interested in a Fall Market sale, now is the time to start preparing. Check out this quick message to Fall Market sellers. If you’re interested in selling, reach out and let’s get on calendar for a custom approach to preparing your home for sale.
Certain data circulating for Dutchess County as posted by OneKeyMLS is inaccurate, particularly when stating Dutchess County as down 23% in inventory. Mid Hudson MLS, which focused primarily on Dutchess, and OneKey MLS with roots in Westchester and Putnam, merged in February. Due to disparate data fields (an issues I’ve heard around the country with merging MLS systems) and questionable choices with how to handle, the merge wasn’t clean and certain historic data, particularly inventory (houses available on the market) unfortunately lost accuracy by a large margin with OneKey MLS now reporting Dutchess County as down in inventory year over year when Dutchess County is in fact up in inventory.
After months of reaching out in attempt to resolve, Chief Strategy Officer at HGAR/OneKey multiple listing service ultimately said “prove it” knowing Dutchess agents no longer had access to the historic data that had resided on the Mid Hudson MLS system. However, he made such challenge knowing I publish this newsletter so it seemed a bit sleepy to challenge a known real estate nerd to prove a data point, but prove it I did by pulling back issues.
Mistakes happen. Own it and make every effort to correct. Right? As far as the Chief Strategy Officer at HGAR/OneKey, whose salary I have to believe is paid by real estate professional membership dues, shared as resolve that Dutchess County will rather “start making new history” as of February, 2024 when the merge happened. His thought process – as time goes by it will become less relevant that we don’t have certain accurate numbers prior to February, 2024. Thankfully, I have back issues of The Brick to reference but I didn’t have all data points in every issue. It’s a definite and unfortunate loss as to truly understand the health of the current market, it’s imperative to know what the market was. I’m trying to get the word out as much as possible so colleagues and third party vendors the MLS shares feeds don’t disseminate inaccurate data.
Dutchess County just posted median sale price from $410,000 to $450,000 YTD, June, 2024. I believe that number is likely close to accurate. Past that, painfully the numbers are too much of a crapshoot. OneKey didn’t even include heavy luxury hitter Town of Washington/Village of Millbrook in with June numbers at all. While a substantially larger service (45,000+ members versus approx 1,200 members in Mid Hudson MLS) with substantially larger staff than Mid Hudson multiple listing service, OneKey MLS appears a bloated and inefficient train wreck, IMHO.
Localized MLS versus Statewide
Why do we have localized MLS services, anyway? The multiple listing service (“MLS”) is an organization that is a collective of brokers and licensed salespeople. Across the country, there are MLS services with as few as 200 members while others are in excess of 45,000 members. The MLS historically established rules to cooperation in sharing and selling listings. The underlying thought process was this broker cooperative would create a marketplace that makes buying, selling, renting and investing properties more transparent and efficient. There are 535 MLS services around the country. That seems absurd and inefficient. There isn’t standardization or data consistency between these services. What happened with the Mid Hudson MLS merge with OneKey MLS is not an isolated instance. What’s the point in all these MLS? Why not one standard statewide system? If we are going look to make positive and productive changes in this industry, bring it on. Let’s roll up sleeves and take a look at inefficiencies across the board. Click here for more on the positive for realtors and consumers this could bring to the table. Not sure what the Chief Strategy Officer at OneKey MLS was thinking barking up my tree. LOL.
NAR Settlement – Commission Structure
I would not argue areas of the industry have been broken, including commission structure (why should a seasoned expert be paid a comparable fee to a novice, for starters) but it is concerning the basis and justifications on which decisions are being made and whom is involved in making them. We don’t have solid answers on all matters yet, but the primary focus appears to be on buyer agent compensation and agreements. Changes are expected to start unfolding on August 17th. Many brokerages are already distributing new buyer agent agreements which will require buyer signature prior to touring a property with a realtor. There will be different versions of this agreement. I discuss this and overall update on the NAR settlement in this five minute video: NAR Settlement Snap Shot. Always feel free to reach out to me with any questions. I will answer whatever I know and look into what I don’t.
Generally speaking, the “powers that be,” which does appear to include the government, are positioning to decouple buyer agent commission with seller still having the option to pay the buyer agent commission so long as what they are offering does not exceed the amount agreed to between buyer agent and buyer.
There are transition pains with all of this. Additionally, our industry often has a domino effect with other industries. In the instance of these changes, lenders have been scrambling to find finance solutions for buyers. There are buyers that are stretching as is and don’t have the extra for commission. At the end day, the reality always has been that both buyer and seller pay the commission as it comes out of the transaction. It was more a matter of who wrote the check.
Another interesting tidbit I will add is Northwest MLS has been offering sellers the option of whether to include buyer agent compensation with listing since 2019. They have reported in multiple instance that most sellers continue to pay the buyer agent commission as they see the benefit of attracting as many buyers as possible to their home. I am surprised through all this that Northwest MLS hasn’t been raised and interviewed.
Choosing a Realtor
Changes in the industry or not, taking worthy time to consider choice in real estate partner has always been prudent considering this is the singular largest investment for most. One of the good things from all of this is buyers will likely hesitate more often before clicking the “contact agent” button on Zillow and other online housing sites. As more information filters out on what solid and professional realtors should be expected to do for their clients (information that should have been readily available all along), sellers and buyers may think twice before playing roulette by having a real estate partner chosen by clicking a paid lead generation button (which is what that is) or someone they may personally know but not be familiar with their professional work.
Focusing on reviews and referrals can be far more effective when seeking a realtor. Check out their online and social media presence. Do you align? Do you feel you can trust and have confidence in working with the professional being considered? If not, move on until you do. Careful choice in realtor could help elevate expectations and overall experience. I addressed this in a 30 second Instagram post “Hire a Friend or Family?” here.
I was also featured in an article in TimesUnion on topic “Five Questions to ask to find the right real estate person for you.”
The Numbers
I can share some basic numbers with where we are. Unfortunately, since Mid Hudson multiple listing service, which focused primarily on Dutchess County, merged with the HGAR/OneKey multiple listing service in February, 2024, Dutchess County realtors lost certain crucial historical data needed to accurately gauge the health of the market. Even worse – this inaccurate data feeds out to other data sites. It is unclear whether the general realtor base and others utilizing this information realize historical inventory data for one is grossly inaccurate. This is why I have not been sharing numbers lately the way I usually do.
I caught the discrepancy right after the merge with first communications to the MLS on it in March. After months of back and forth, two words from the Chief Strategy Officer at HGAR/One Key: “Prove it.” I was first taken aback by the audacity from a primarily realtor funded multiple listing service taking such stance, but that was quickly but the stupidity of saying “prove it” to a real estate nerd. That took about three seconds.
Should you hear Dutchess County is down in inventory from last year that is not the case. That is, however, what has been posted for realtor (and by extension general public) consumption since the February merge. Sadly, I am likely one of the only people that can prove it since historical data that was static was not transferred onto the OneKey MLS. I could feel Gary Connelly’s Cheshire grin as he said “prove it” knowing we no longer had access to this historical data. What I did have access to, though, were back issues of The Brick with data pulled directly from the Mid Hudson MLS system.
I could feel his Cheshire grin as he said those words as for most this would be an impossibility with Dutchess realtors completely stripped of all historic data that was static and posted in the prior system. OneKey refused to post this static data after the merge. It seems clear now to avoid revealing certain data that is now grossly inaccurate due, IMHO, to a careless data merge between two disparate systems.
For most, this would likely be an impossibility as interestingly static historical data that was posted in the Mid Hudson MLS dating back decades to its inception was not posted and I was notified by the service will not be. Static pages – why not? To post would reveal the clear discrepancy in numbers. Plain and simple.
Forgot to Mention
There seems little debate the industry has had room for improvement for many years. Raising the bar for entry with additional educational, background and mentorship requirements prior to representing multiple hundreds of thousands, if not millions, of dollars for transacting clients could elevate the industry and its service to clients, but seems unrealistic considering underlying realities embedded within the framework of the real estate industry.
According to the National Association of Realtors 2023 Profile of Realtors study, real estate professionals with less than two years of experience realized a median gross income in 2023 of $8100. I made $11,000 my first year yet put $30,000 into the business so that sounds about right. Interestingly, the CE Shop, an educational resource focused on licensure and continuing education classes for realtors, quotes an average income per online job site Indeed, of $94,586 while encouraging license application. Misleading information can demonstrate how 87% of real estate professionals are statistically out of business within one year of obtaining licensure. One year ago, in July 2023, NAR reported 60,000 agents quit during the first half of the year. No doubt, true success in this competitive business comes down to survival of the fittest. Is it realistic to expect to raise the bar on requirements for new real estate agents to enter to field while staying anywhere close to this median gross income?
Property Disclosure
First discussed in the April, 2024 issue of The Brick. This 48 question form asks varied questions of owners about their property. Flood questions were added along with a new mandate for delivery to buyer which ended the credit option of $500 for seller to pay buyer in lieu of providing the property disclosure form.
This created a disingenuous situation as sellers routinely credited buyers in lieu of providing. The misses as I see them with the new are in timing and penalty. Sellers should be mandated to provide these forms at a minimum prior to a buyer incurring inspection costs. New York State is a “buyer beware” state, as is. Let’s get these buyers information up front and empower them to make confident offers and solid decisions. Requiring before signing contracts is an unfortunate miss in funds already out for the buyer and what if something on the disclosure gives the buyer cold feet? Does a seller really want to wait until just about in contract to find there’s an issue and go back on market?
What if there is something of substance wrong that the seller is aware of? Would it not make. There is also now no financial penalty for not providing. The New York State Bar Association is scratching their heads over this, too. I have to believe input from a realtor was not sought prior to introducing this new process as it took about two seconds to see Governor Hochul’s oversights. The property disclosure form is far more basic than what’s on the table ahead. See the new property disclosure form here to gain understanding of the types of questions sellers are being asked about their property. If there was an issue that was repaired or is no longer an active issue, my understanding is it does not need to be including in this form, but this is a legal document that warrants legal counsel for questions. I have solid attorneys I work with. Reach out if you would like a recommendation.
If these changes are intended for the long haul, it seems the full picture should be considered. It has already been proven that decisions made seemingly without solid industry input have already fallen short of highest value. The new property disclosure form and mandate that went into effect in March, 2024 is an example of what should have been a simple industry change if properly implemented in comparison to what is now on tap but rather has two glaring issues, IMHO: 1) Current mandate: Seller to provide to buyer before buyer signs contract. It seems most productive to mandate this 48 page form filled out by sellers which addresses varied components and conditions of the property and provided to buyers prior to offer submission or at least prior to funding an inspection . Simple change in timing could have made property disclosure more useful to buyers and 2) It appeared the goal was to make this form a mandate for sellers to provide to buyers.
If that is the case, increase penalty from seller to buyer for not providing rather than remove credit to buyer all together. Prior to March, 2024, a $500 credit from seller to buyer was required for sellers that did not fill out this form, now no financial penalty exists. The New York Bar Association also questioned this move on their website (click for full article), noting “The most effective method of discouraging use of the credit would probably have been to increase the amount – perhaps to $1,000 or $10,000.” While it seems a well intended change by Governor Horchul, those two key misses could have likely been caught if industry input was included, by realtors or real estate attorneys, in the process. See new property disclosure form here. What could be deemed basic misses that should have been caught are unsettling particularly considering the magnitude of decisions being made at present for the industry.
With the level of inefficiencies that run deep in the real estate industry, the focus appears squarely on realtor commission as savior to housing prices created by the basics of Economics 101: supply and demand. Does this mean when supply and demand issues impact another industry relevant professionals will also be required to alleviate through reduction in their fees or supplies for services? While looking at downward adjusting commission to realtors, are brokerages also being looked at to increase the split provided to their agents or are brokerages remaining untouched with real estate professionals alone absorbing full impact?
Readying to Close
I first met Karen in review video above when she was working in building and zoning for a town in Dutchess. I got into building/zoning at the outset of a listing or when a buyer is pursuing a property to check for certificate of occupancies, open permits, etc… Basically, I don’t like surprises that don’t come in small boxes on the way to the closing table. The more that can be gleaned at the front end, the higher the likelihood of sparing hiccups on the way to the closing table. Karen was my got to when clients were buying or selling in her municipality.
For my seller clients, it can bring solid and trusting buyers to the table when depth of information is available. From a buyer perspective, information on the property can empower buyers with confidence in their choices.
When it came time to sell, Karen reached out to me months in advance of listing. I shared an assessment custom to her home with counsel on where best to focus efforts and funds to prepare for sale. As the time neared to list, another agent came into the picture as is often the case when property owners start talking about selling.
The other agent shared a noticeably higher number that was completely out of my suggested range. I keep a solid pulse on the market in order to offer sound counsel to my seller and buyer clients. I revisited the comparatives with her and her husband while standing by suggested range.
I shared the risks of losing the crucial market entry window to overpricing as most often it leads to price reductions to ultimately sell or negotiating down with a singular buyer. She did not desire to entertain a drawn out process of showings but rather the highest dollar in as little time as possible. The notion of languishing on the market was not on radar. She trusted my counsel and listed.
The home is a beautiful custom home that is ready for new parents. It is flanked on both sides by high end homes off a quiet country road. The private setting with views allowed for justified investment with lessened exposure to over improvement.
The targeted buyer was not a $719K buyer as listed but rather a $850,000+ buyer that wanted to make the home their own and address areas worthy of update.
It can be tricky when a home is priced in a different range than anticipated end value. Updates, repairs, etc need to be factored in pricing and attention needs to be captured from targeted buyers likely searching in a different price range. Highly effective marketing is crucial.
We had our buyer in a week. Closing next week.
126 Hobbs Road
Clinton Corners
Will be closing for full asking price at $719,000
Willow Lake Farm in Mansion Global
After seven years on the market with other realtors, Willow Lake Farm had three buyers at the table in thirty days once listed with me.
This property has enjoyed extensive national and International press coverage along with extensive marketing to support solid pricing.
We are expected to close in September. See Mansion Global article.
4 Willow Lake Road
Fishkill, NY
Asking price: $4,385,000
I work across price points, but I am a global luxury specialist, which requires special background and training. Should you have any questions on the market or wish to discuss preparing for sale, reach out.
Click here for the aftermath of a true guru coming for a showing.
Milestone Moment since coming to Dutchess from Westchester/Putnam! That week hit a few weeks ago. Two of the properties have closed since then.
The Milestone
When I first relocated to Dutchess County from Westchester five years ago I was quickly reminded of what it was like when first starting in this business over twenty years prior. When relocating in real estate, that often means starting over with establishing business. It did for me at least.
I was brought north by developers of the Tradition subdivision in Red Hook to set their marketing and advise on pricing, amenities and work with their talented architects on layouts. That was an incredible experience to work with such a highly talented team of professionals.
While working in a sales center of a 102 door subdivision would be an amazing opportunity along with its golden blanket of security for some realtors, it just wasn’t for me.
I worked with them through pre-launch. My youngest had gone through the adjustment of starting in a new school system and was happy to stay so I returned to my broker roots with focus in Dutchess (although to this day I still return to Westchester and Putnam for clients and their referrals that don’t accept my relocation )
This is a highly competitive industry. Make no bones about it, we struggled as I made my way to establish my business here. My daughter stood by my side with “you can do it, mom” moments when I broke down thinking there was no way I could provide the life I wanted for myself and kids in this new terrain. Her words refueled my emptying jets.
We are still making our way. Progress has not been overnight by any means. Each year it’s been better, though. I’ve stayed grounded in integrity, trust and transparency and keep pushing the envelope for my clients to realize success in their goals. My reputation and sphere have grown with this week marking a particular accomplishment in this chapter of the journey.
I’m taking this supportive and incredible child on a special trip. My oldest will soon enjoy her special trip too.
Holding gratitude.
If you’re looking to get out of town…
About 10 miles off the coast of Maine rests this little squirt island stretching less than two miles long and one mile wide. Monhegan Island packs approximately 12 miles of walking trails that include rocky ledges, wooded, easy (relatively speaking) strenuous and the highest cliffs on Maines coastline.
Somehow in this less than four square mile existence days can go by while barely touching surface of things to do. How?! Time is different at Monhegan Island. Not time on the clock, but the overall perspective of time, and quite a bit else for that matter, shifts.
It didn’t hit at first. I got there with my snazzy new briefcase spotting the perfect ocean front study in the Inn that would host my creative spirits to write my overdue next edition of The Brick. Knock that out during the time my daughter needs to work was the thinking. Never happened.
I had three deals move to attorneys hands to fully execute contracts when I left. While i saw the window of opportunity for a “quiet” weekend, the lack of phone reception and highly spotty Wi-Fi was met at first with some resistance panic followed by an exhale like i have not had in some time. There’s a forced release that happens when stripped of transportation and technology in one swoop. Back to basics real quick.
The island is storybook material – literally and figuratively. Catching bursts of flora en route to whatever the day has in store. Houses bursting with textbook curb appeal while lacking driveway and garage. Most often if wheels are involved it’s golf cart with shed. Building fairy houses along classic storybook wooded trails spotted with perfectly green moss. No worries if you drop your charge card. Someone will pin it to the community board (happened)
It wasn’t that long ago residents had kerosene lanterns for light. Replaced now by propane generators supplying electricity throughout the island. Broad band just came two weeks ago and while it may be spotty, having it at all has mixed reviews from long time owners. Most people I met have been going for decades or are among the 60 that live there full time.
Definite experience.
Luxury
No, I didn’t forget luxury! If you have to look for it, you’ll appreciate it more. LOL. Here’s the latest talk of the town, 45 Hitchcook in Millbrook. $65,000,000. If it goes for this price, it will be the highest sale in Dutchess County record. Keep in mind that Ledgerock in Hyde Park opened up ready to take that spot with an opening price of $45,000,000. At last check, Ledgerock expired at $14,500,000. That is not to say that is what will happen here, but I am mentioning it can happen
It’s a wrap! Should you know someone seeking a solid real estate partner, I would appreciate the referral. I will take very good care of those sent my way.
Enjoy the remains of summer!
Ciao!
Sandi