Greetings all!
The holidays can be jovial with homes full of cheer as sweet aromas envelop the kitchen. The holidays can also be a challenging time wished away for speedy turn to a new year. I wish all well and if this is a difficult season, that peace and comfort are found in simple pleasures.
The dynamics in current market from lawsuits against the real estate industry to certain sellers digging in heels in attempt to squeeze the market with overpricing and everywhere in between took me back a step to collect my thoughts while actively engaged in getting clients set leading up to Thanksgiving. Hence, no Brick in November.
IWhen I miss a month, though, that’s when a number of subscribers tend to get most vocal. “Where’s The Brick?!” “What’s happening in the market???” Brings a smile. Thank you for your trust and continued interest.
My subscriber base has grown steadily since I formally launched in February, 2020 – just before the pandemic hit. I have always strived for transparency and to foster confidence in real estate and overall understanding of market conditions, which have at times felt like the Wild West in recent years. I welcome suggestions on content, feedback and questions – or just to say “hi!” I can be reached best by cell at 914-522-6282 or email: [email protected].
If this issue was forwarded, feel free to subscribe within the newsletter at bottom link for future issues. This newsletter is fully opt-in and has grown organically.
This issue:
- The Market
- Median Home Prices
- Interest Rates and Multi Family Financing
- Hire Friends or Family as Realtor?
- Just Sold
- Inbound and Outbound Migration
- The Luxury Market
- Test the Water
- Planning Forward
Without further ado, let’s dive in…
The Market
Early Bird Gets the Worm
Per the Federal Housing Finance Agency (“FHFA”) House Price Index, US house prices rose 5.5% year over year in Q3 2023. Yet, according to the National Association of Realtors, sales now sit at their lowest since 2010, dropping 15% year over year in October. According to Altos Research, inventory across the US, including our region, rose late into November with new listings up over last year. Competition for houses has remained surprisingly resilient despite mortgage rates reaching highs not seen in more than two decades, but sales volume is down for single family detached.
Attached living is the hot ticket in the moment with increases. The current median on single family detached is up only 5.3% ($440,000) versus 31.5% ($351,000) for single family attached. Current closed sales are up 28.1% while single family detached is down 14.6%. YTD closed sales are down in single family attached 23.1% with YTD closed sales down 21% in single family detached. Current sales dollar volume is up a whopping 77% in single family attached. Current sales dollar volume for single family detached is down 10.9%.
Numerous articles circulating share encouragement for the 2024 market. “Mortgage refinance demand jumps 14% as rates fall to lowest point since August,” “Promising Signs Abound for 2024 Housing Market” and “Redfin offers hope for Buyers” are just a few of the latest reads. No one knows for certain. Here’s my take…
The gridlock is projected to lift in 2024. That doesn’t mean it’s going to be pretty, we have curves ahead, but the gridlock created between low inventory, high prices, demand and higher interest rates should ease in 2024. Interest rates are somewhat cooperating, inventory has been increasing, which then speaks to demand. Should inventory increase to balance demand, prices should start to see some adjustment. The balanced market is the healthiest market condition. We have been everything but balanced since 2020.
Per numerous reports, US homes were the least affordable in 2023. Inventory has been rising with pools of anticipated feeders into the market in the days ahead that could help further increase inventory. Baby boomers cashing out, particularly in 2024 and 2025. Foreclosure filings are expected to increase beginning in 2024. There will be some opportunity for investors in that space, but with approximately 80% of foreclosure filings having a minimum of 20% equity in their home due in part to valuation surge, homeowners facing foreclosure will likely opt to sell their home before auction. Taxes have been on the list for outbound migration for years with noticeable increases in the past few years likely putting more fuel in the tank for relocations.
While demand still exceeds supply outside of the luxury market (more on luxury below,) as more inventory enters the market the scale will continue to shift toward a neutral and buyers market. Movement in this regard is expected to continue throughout 2024 and 2025. I stand by my 2022 prediction of 2025 being the soonest we see a truly stabilized market. I fully believe we have more curves in the road before we get there.
Sellers
Early bird gets the worm. If there are not specific issues with timing that dictate a sale further into 2024, mid-late winter Jan-Feb primarily and early March could provide more optimal seller market conditions than Spring Market in the coming year. Generally speaking, Spring Market is the busiest with more buyers and sellers in the market than any other (except during the pandemic when we experienced one long Spring Market) and, historically, certain buyers would put their their toes in to get a feel in Jan-March to “get ready” for Spring Market.
The difference is buyers “getting a feel for the market” in January-March hasn’t existed since the onset of the pandemic. The market did not allow space for that luxury. Buyers were either all in or regaining composure in the sidelines after another bidding war defeat. Walking a mile to get a parking spot to see a house is not a conducive environment for buyers just “getting a feel.”
We are in the scaled down remains of that environment. Want an example? Click here to see the house on Cottage in Hopewell Junction that went into contract in early November, with three days on the market before accepted offer. The property enjoyed non-stop showings. It just closed a few days ago and has proven an interesting study.
During the height of frenzy that level of interest would have easily meant multiple thousands over asking. It sold for $100 over the asking price. Granted, the sellers were not comfortable having the house shown so they accepted an offer after only a few days on the market without waiting at least a full weekend.
They likely could have gotten more had they shown the entire weekend, but they were clearly content with their asking price. The buyers are out, but they are much more discerning than pandemic height. I was of the understanding it was selling for noticeably over asking, but that ended up not being the case and rather provided a glimpse into what I believe to be an adjusting market demonstrated by such a marginal amount over asking doing the trick with such high buyer volume in showings.
There are also properties that don’t get the traffic and reduce drastically to ultimately sell. Want an example? Here’s a classic. This one went on the market in June, 2022 for $1,600,000 and sold for HALF its original ask at $800,000 in April, 2023. Nearly a year late during what was still a very active time in the market. See Property.
Reality is, sellers and/or their agents can ask whatever they want for a property. The buyer ultimately determines value through the sale price – whether up or down from the ask. The absolute best bet for an increase from asking is to open strong out of the gate.
There are buyers that have been in the market easily for several months, some more than a year. It is highly anticipated mid-late winter sellers will enjoy a captive audience of buyers this coming year with less competition than spring market so long as the property is priced well and effectively marketed. Call/text me (914-522-6282) or email ([email protected]) and let’s talk!
...But NOOOOO I have gardens.
My property shows better in the Spring or Summer…
We are in the perfect climate to leverage other listings, which could mean a higher return than waiting for blooms. I smelt the same opportunity in the air in Jan-March 2023 as existed during those same months in 2022. That whiff is a bit euphoric, but I digress. Here’s the perfect storm that’s happening right now: Overpriced properties leftover from 2023 sit on the market. Certain realtors/sellers/whatever price new listings against the overpriced aged listings. Then its just another property to join the ones sitting.
Enter a solidly priced and effectively marketed new listing. This was the EXACT conversation I had with a seller client last December, 2022. She had extensive perennial gardens throughout the property. Trees surrounded. “This will show so much better in the Spring or Summer” the owner said to me. In the end, she trusted my counsel and we put her home on the market February 2, 2023. I gave her a range of $469,000-$499,000 while advising to the lower end of range as my clients have fared quite well with that counsel. We entered the market at $469,000.
There was a direct comparative house around the corner from my clients that had been on the market for eight months prior to my clients home. The other property entered the market in June, 2022 for $525,500. We entered the market in February and closed a month later in March for $550,000. My client was in and out of the market while the other home sat, selling for $81,000 over asking to boot.
If we opened at the $550,000 we ultimately got, would my clients have gotten it? Likely not. In the end, the other house opened at $525,500 and sold for $35,500 UNDER asking price at $490,000 a full year later. These were comparable houses, yet my clients sold for $60,000 more in one month and the other property took a full year to sell for $35,500 less. See both listings. My clients is the one on Traver. Even though they had extensive gardens, it mattered not. I spoke to the gardens with buyers. They got the picture.
It is imperative to align with a real estate partner that has a firm pulse on the market, leverages and executes strategic pricing and is skilled in highly effective marketing. Those key elements are more important than whether snow or spring flowers. That sale is one of many examples I could cite.
Buyers
There will likely be issues attached to what causes the expected impending adjustment that will lessen the amount of buyers as inventory continues to increase. As far as buyers are concerned, when a home and/or property is found that is liked, affordable (preferably without banking on a refinance by a specific time) and checks essential boxes at a minimum, then it is the right time to buy. While there are forecasts for lowered interest rates in 2024 and 2025, it’s quite clear we live in volatile world. There are more than a few buyers that got themselves into unfavorable situations playing “wait and see” for lower rates and prices.
Median Sales Price
The median price is the middle price which is often a more useful metric because it’s not impacted by outliers (ex: crazy bidding war sale prices) as it would be when employing the average.
Recent US median home prices have varied in a relatively tight range. Redfin’s latest October, 2023 US median home price is $430,339. Per the MidHudson MLS, which focuses on Dutchess County, the median sales price for single family detached is up 5.3% YOY November, 2023 to $440,000 versus $418,000 in November, 2022.
November 2023 YTD closed sales are down 21%
The HGAR/One Key MLS (source for Westchester and Putnam numbers) has not yet posted November, 2023 numbers. In Westchester County as of October, 2023, the median sale price for single family detached is up 6.7% to $800,000 in October, 2023 from $730,000 in October, 2022.
In Putnam County, single family detached median sale price in October, 2023 was up 3% to $510,000 versus $495,000 in October, 2022.
The buyer count has steadily decreased since May/June, 2022, but there is still currently not enough supply to fulfill demand. Solid pricing and effective marketing could really help matters, too. During the past twelve months in Dutchess County alone, 783 listings have either expired (did not sell during the term of listing agreement) or withdrew. To share perspective, more listings did not sell over the past twelve months than available by a noticeable margin in any singular month in Dutchess County since January, 2021.
Inventory has increased in Dutchess, Putnam and Westchester counties during November to date (12/6/23) regardless of historic seasonality decrease in new listings inventory in November and December. In fact, those two months are generally considered the slowest of the year in new listings and contracts.
This year we are not seeing the return of this seasonality pattern. In all three counties, inventory rather increased. Ulster County was not excluded by oversight in this analysis. More on “Politics and Multiple Listing Services” further down.
October, 2023 to date (12/6/23), inventory increased by 47% in Westchester and 81% Putnam, per HGAR/OneKey MLS. Dutchess County took a momentary dip from 549 active listings posted in October to 474 in November. As of today, 12/6/23, Dutchess County is up 7% from November to 508 active listings. Prior to the “one long Spring Market” that marked the pandemic, increased listing activity in November and December was nearly unheard of in real estate.
While increasing, we are still painfully below “normal trending” numbers of 2019.
New York didn’t make it!
NY made number 11, but not the Top Ten for highest median home price nationwide. New York did make #2 on the top 10 outbound migration list. Not sure that’s something to write home about though.
The US median home price (single family detached homes) per Redfin US Housing Market most current overview report is $430,339. This was a 3.4% YOY increase October, 2023.
Interest Rates and Multi Family
Interest rates have been demonstrating a degree of compassion lately. Both Fannie Mae and the Mortgage Brokers Association share projections for lowered interest rates in 2024 and 2025. They differ in timing. Fannie Mae does not project a “6” involved until 2025 while the Mortgage Brokers Association forecasts a move in the 6 range for interest rates as early as Q2 2024.
See Mortgage Association Forecast Report.
Interestingly, the Fannie Mae Housing Report and Mortgage Bankers Forecast project multi-family sales to decrease in 2024 and 2025. While I’m sure they both have stellar economists drafting these forecasts, I don’t agree with those projections between increased interest in multigenerational living, affordable housing options created by tenants rent contributing to mortgage and overall rental demand. Demand has heightened for multi-family housing. Time will tell on the projections.
For those interested in multi family, the FHA recently introduced a program to purchase up to a 4 unit multifamily with projected rent applied as 75% of income factored for qualifying. For more on this program, watch my Instagram Video here.
Hire Friends or Family as Realtor?
Playing Nice Could Cost Thousands
The choice in real estate partner can mean the difference of multiple thousands of dollars. When considering representation, careful consideration of whom to entrust as in any other investment purchase or sale could prove prudent.
There is never a good time to skimp on this choice, but now it is crucial. We are in a changing market. Should a high caliber realtor also be a friend or family member, that can be a score.
If you are not privy to their work professionally, it could worthwhile to see their work prior to hiring. Does the quality of their work align with the level of representation sought? If not, the good graces could in fact sour a relationship in the end.
I recently had a seller that hired a friend in lieu of my representation circle back to me. She shared that she and her daughter wished in the end that they hired me. Making this discovery once in a transaction is less than ideal. This conversation inspired a recent post on the subject below.
Watch this one minute thirty second video on it…
Just Sold
I love “feel good” deals. Abby and Drake have been such a pleasure to work with. Their dreams turned into reality when they came to the property I had listed at 90 Salisbury Turnpike in Rhinebeck. This gentleman’s farm needs some work, but they are handy and excited to start their own farm and orchard.
Eager to embrace the community, a special “Just Sold” postcard was crafted with their approval that included their growing family picture on the front with an introduction for neighbors on the back. Little spin on “ice breaker.” 😉
I represented both buyers and seller in this transaction. See full listing here.
Inbound and Outbound
These states likely won’t be a shocker, and have a few things in common: they’re more affordable and most are in the sunbelt. While research has shown that homebuyers consider climate risk when deciding where to live, affordability is often a more significant factor as demonstrated by the number of inbound migration areas that have intensified climate risks.
Migration lists vary by data source. Texas is often on the inbound list. Austin, Texas, once a migration hot spot is losing homebuyers to other cities for the first time on record. Houston appears more in favor than Austin of late. I went with Redfin for this one as Redfin is reporting where buyers are searching, which provides forward insight.
Top reasons for outbound aligns with reasons for inbound: taxes, weather, lifestyle, closer to a loved one, job, education and affordability.
Top five states buyers searched to move from: California, New York, Illinois, Massachusetts and DC.
Top five states buyers searched to move to: Florida, North Carolina, Tennessee, South Carolina and Maine. (My kids are such trendsetters. They’ve been wanting to move to Maine since well before this report)
Per Redfin, October 2023
Luxury
This historic property pictured has been beautifully updated with fine craftsmanship. Take a look at the house tour by clicking here or on pic. Pleasant Valley.
According to Forbes, the US luxury market has progressively slowed down in 2023. Mansion Global predicts a 2.5% price increase in luxury homes in the global space. It appears we have topped out at a minimum in Dutchess and Putnam counties.
The Luxury Home Marketing Report noted “it is highly unlikely the luxury market will return to the same levels of demand, sales and price increase that occurred during the pandemic as those were extraordinary years.” See full report here.
Luxury historically is the first sector to adjust in a changing market. There are currently more listings active $1,000,000+ (94) than sold in the past twelve months (82) in Dutchess County. In the last “normal trending” market of 2019, a total of 35 listings sold above $1,000,000 in Dutchess County. Already 168% higher than the last normal trending year with more listing anticipated to begin entering the market in January.
Putnam County had no sales above $1,000,000 in 2019, per HGAR/OneKey MLS. In the past 12 months, Putnam had 26 sales. There are currently 34 active listings above $1,000,000.
With Westchester County carrying a lofty median home price of $800,000, I increased the luxury number to a minimum of $2,000,000. There are currently 169 listings in Westchester County above $2,000,000. 485 listings above $2,000,000 sold in the past 12 months. In 2019, 299 listings sold above $2,000,000. Westchester is showing as the least vulnerable in the luxury space of the three counties based on sell through to active listings against prior trending.
I predict saturation in the luxury sector in Dutchess County, in particular, and likely Putnam. Five luxury/ultra listing appointments in the past few months insisted on overpricing. In every instance, the seller wanted to list for noticeably (in three instances $1M to millions) higher than comparative range gleaned. Two of the sellers decided not to sell. One has not yet listed, but at least $1M over suggested price is expected. The two remaining went with other realtors willing to speak their pricing and have had multiple reductions since to still sit. It’s really not a time to mess around.
Over $10,000,000
Ledgerock in Hyde Park entered the market initially at $45,000,000 and was touted as what would be the highest sale in Dutchess County history if it sold at that price. It is now listed at $25,000,000. There are two listings priced higher that have entered the market. Curious to see the eight listing above $10,000,000 in Dutchess County? Here you go.
What Clients Say…
“I would not work with anyone else” J. Glassman
Often not detected by the senses…
Approximately 1 in 8 American residents get their drinking water from a private well, per the Center for Disease Control and Prevention. Private drinking water sources are not covered by the Safe Drinking Water Act, which focuses on public water systems. Private drinking water sources include private (or household) wells, springs, cisterns, water storage tanks and trucked water.
The CDC noted approximately 1 in 5 sampled well tests revealed at least 1 level of contaminant. Shocking the well, UV light and/or reverse osmosis systems are the most common solutions. Water and well company professionals are best suited to advise on solutions based on specific issues.
The key is to know whether contaminants exist rather than prolonged ingestion. Most often when a water test fails during a home sale inspection, the seller had no idea there were issues and is generally responsible to rectify and deliver satisfactory test results prior to closing unless the parties agree otherwise.
Meanwhile, those that had been drinking from the tap (and depending on the issue, even a filtered water source akin to Britta will not filter certain bacteria such as EColi or Coliform,) up until that point may have been exposed to health risk(s.). EColi and Coliform are two of others that cannot be seen, tasted or smelled.
NYS Dept of Health advises yearly water tests, more often if issues were found prior.
See one sheeter from the Environmental Protection Agency on Home Water Testing.
Resilience, Relevance and Renewal
All projections point to it being a difficult market ahead for realtors. I’m actually planning on it being one of my best years. (am I nuts?!). I’m addressing a new CRM, calendaring and other software to free up time so I can continue to provide the level of service my clients expect and deserve while increasing my client base. Since I hold a broker’s license, I can be licensed in other states. I will have my CT and MA licenses by January. Plans to add a NC license are on radar, as well.
In the next two weeks I am finishing up my designation for Senior Real Estate Specialist as I enjoy working with seniors. One of my older clients slept on her couch for two years as she could no longer go up the stairs and felt chained by clutter. Her home was no longer functional or even safe. I want to continue to help others through their life transition into residences more suitable to their current needs and physical capabilities.
From a health perspective, it’s overhaul mode. I started intentional breathing, which is amazing. I’m integrating healthier choices and balance into my lifestyle as I’ve prioritized independence and longevity.
Wishing you all the very best of the holiday season. If you ever have any questions on the market, please feel free to reach out. I take my referral business very seriously and will take very good care of those sent my way.
I am very active on Instagram. I post all different tips and real estate advice. Join me @hudsonvalleynest.
Back in January with the year end! It’s a wrap!
Best,
Sandi
My Why….
Kylie (my oldest) and Alana under the “Bedford Oak” in Bedford. This was our favorite spot to picnic throughout their childhood years. Goes by so fast! Turned around and they are 21 and 15. Both amazing people.