Hi all,
We are now halfway through Fall Market. Historically, the market retreats mid-November with renewal beginning in January with increased activity on the approach into Spring Market.
Due to continued inventory issues, Fall Market has been lackluster with many buyers and their realtors exercising ongoing patience in their quest and, based on a number of conversations with colleagues, top producing realtors generally down in sales numbers.
After Covid kicked in, historical seasonal patterns gave way to one long Spring Market. The market did see the return of slower winter seasonality last year after several interest rate bumps put the brakes on for a noticeable number of buyers and sellers.
Fall market 2023 seems to mirror much behavior from Fall Market 2022 with buyers active and multiple offers continuing, yet in lower numbers for both than June, 2020-June, 2022. For this reason, there is an expectation of winter seasonal slow down, particularly if interest rates take another hike. What will Spring Market 2024 look like?
There are other aspects of real estate that can include interesting trends, special community events and places to go, etc. I’m going to sprinkle tidbits into my newsletters. Suggestions or places you’re curious about? Let me know! Requests are always welcome along with the exploration!
Here’s what’s in this newsletter:
- Interest Rates – the impact continues
- Current inventory and median prices
- Horse Farm Compound Enters the Market in Rhinebeck
- Assessments – Is 100% assessed better? Does non-100% have greater potential impact on resale?
- How to lose every dime of equity in your home in two years
- Tax Liens – what has the recent pattern been and is it expected to continue?
- Top Sales Award – Woohoo!
- Trends in Homes
- Luxury – where is momentum high in our area?
- Top Five Outdoor Improvement Projects for Best Resale Return
- Local Business Spotlight
Let’s roll!
Interest Rates
Mortgaged buyers in contract readying to close are keeping vigilant watch on interest rate lock expiration dates. The days ahead will likely see certain properties go back on market as mortgaged buyers find themselves no longer in a position to buy should interest rates continue on the ascent. In the moment, cash buyers are salivating with hopes to regain accustomed leverage reduced by the pandemic to simply keeping a seat at the table.
Barry Habib, an authority on mortgage backed security research, best selling author and recipient of three Crystal Ball awards for accuracy in his real estate projections, shared his most recent forecast: for every 1% in interest rate decline, an additional 5,000,000 buyers will enter the market. That’s significant, even if off by a million.
What this boils down to is when a rate descent happens to a palpable point, mortgaged buyers awaiting reduced rates will likely find company and increased competition, which can drive pricing and ultimate purchase price through multiple offers. We have already experienced this to be true. Habib has now added a number to that expectation. I’m not holding breath on rate drops of any real significance near term. If anything, I believe the tank is filling up at the station for a bumpy ride yet ahead.
This “refinance in two years” chatter that’s been making its way all over social media makes me shrill. I think it’s misleading, at best, to counsel buyer expectations to refinance in two years when no one knows for certain what the interest rates will be in two years. They could be up, they could be down. We don’t know.
Financial planning for the unknown as though known is a sore reminder of where that mindset got more than a few mortgaged buyers in the early 2000’s. I’m not aligning what is now with the early 2000’s as it is very different, but I do see similarities with the mindset of interest only adjustable rate mortgages that were the rage back then until principle payments kicked in and interest rates took upward adjustments in comparison with certain buyers relying on a refinance within a certain period of time for continued home budgetary sustainability. There is an already proven caution flag with that mindset.
Whether interest rates are 3%, 5%, 7% or 20%, it’s the monthly nut. How much can you comfortably afford now without having to plan on a lowered interest rate by a certain date? If you find a home you like and can afford, then it is the right time to buy.
Inventory and Median Prices
Inventory continues to slowly increase, yet our general region remains in historic lows. As of September 30, 2023 posting in Mid-Hudson MLS, Dutchess County inventory increased to 497 listings available. Up from August, yet down 22% versus September, 2022.
For “normal trending/pre-pandemic” perspective, the average number of listings available per Mid Hudson MLS in the month of September in 2016-2020 was 1,347, nearly 43% higher than September numbers reported. October is seeing a marginal bump of new listings with current as of October 11, 2023 at 584. What does this mean? Far less seller competition with a captive buyer audience. The market is prime for selling. If you’re interested in current home value or are trying to work through scenarios of how a sale could align with a purchase, reach out.
HGAR/OneKey MLS reported Westchester County 866 listings available in September, 2023 reporting, down a whopping 41.7% from September, 2022. Putnam County reported 194 listings available in September, 2023 (down 34.7% September, 2022) We are still very much in an inventory squeeze throughout our region regardless of pockets around the country realizing inventory growth and inherent market shift. Fall Market is another tough one with buyers and their realtors eagerly watching for new listings as they drip on the market.
Low inventory with continued demand means we are still in a sellers market. While median prices have stabilized from their trajectory flight, they do still reflect the reality of basic supply and demand economics at play. The median sale prices are up in Dutchess, Westchester and Putnam. In Westchester County, September 2023 versus September 2022 saw a 7.6% increase in median sale price to $868,375. This is down from August, 2023 median price of $980,125.
There are counties in California that realize a notably higher median sale price than Westchester, but this is still eye popping for a median. In Putnam County, the median price dropped in August, 2023 versus August, 2022 by 3.9% from $510,100 to $490,000. Then September saw a pop to $550,000, up 9% versus September, 2022.
Dutchess County is showing stabilization with the most contained increase of the three counties, up 2.4%, to $430,000 in median price versus September, 2022. Mid Hudson MLS reported the same median price for August, 2023.
Dutchess County realized steady month to month YTD median sale price increases throughout 2022 ranging 5-9%. 2023 has lingered between flat and 2.7%. This consistent stabilization to date in 2023 in Dutchess could be deemed healthy versus larger swings still happening in neighboring counties.
Horse Farm/Compound Living in Rhinebeck
$789,000
New to Market
Three bedroom residence, two barns including one with fenced area for livestock and main barn with indoor riding ring and eleven stalls, four turnouts, outdoor riding ring and potential additional building site withsunset views.
Call Sandi to schedule your private viewing.
(professional video coming soon)
Assessments
Is it better to not to be 100% assessed?
Nearly two thirds of the municipalities in Dutchess County are at 100% assessed value to market value (also known as equalization rate). The three municipalities assessing the farthest from 100% in Dutchess County are Dover, Hyde Park and Pawling with 35.5%, 45.5% and 32.78% equalization rates, respectively. Yet, those three municipalities serve up tax bills among the highest in Dutchess County to their residents. An overall homogenous calculation method does not appear to exist with exemption offerings also varying by municipality.
I have a current example of how 100% assessment can positively impact a community as a whole by creating a true and fair valuations method that, in the end, can help both resale and ease “jumps” in taxes when going through a reassessment process.
Two comparable properties, each with what should be full market value at approximately $1,100,000 and $1,200,000. The school tax collector shared approx. $1800 more in school taxes for the $100,000 difference in that particular municipality. Yet, taxes on one are over $10,000 more than the other just down the street. To the assessor I shared: “Why is one property assessed at $562,000 and the other $1,050,000 when they are comparable?” The response was their reality – the township has not reassessed in many years. Some houses “slip through the cracks” for a period of time. That’s how a jump in taxes can come into play.
It is my understanding that in municipalities that do not have 100% assessments, a municipality cannot raise assessments without verifying noticeable improvements to the property, regardless if the property currently assessed at $562,000 sells for $1,100,000, for example. In a 100% assessed municipality, the sale price alone can adjust the assessment.
The buyer of the home assessed at $562,000 will likely not have a great day ahead when their taxes ultimately jump closer to their reality of $1,100,000 purchase price, or at least the new buyers will when a reassessment shakes out. For the other home assessed more in line with value at $1,047,000, resale can be a challenge when buyers compare taxes to under assessed homes. There is also the issue of a homeowner with an accurately valued and assessed property at $562,000 paying comparable taxes to a $1,100,000 property if that property is also assessed at $562,000. This potential disparity is a core issue in non-100% assessed municipalities. 100% assessed takes subjectivity and “slipping through the cracks” out of the equation for the most part.
I speak with tax assessors regularly in representation of both buyer and seller clients and also for my own knowledge. I spoke with several assessors in Dutchess County when I noticed this disparity. I specifically called municipalities that are not 100% assessed. This is not about the assessors. Every tax assessor I have spoken with would happily embrace the common ground in assessments of 100%. This appears about politics and money. It is expensive to reassess and with at least a certain amount of people desiring to not be assessed at 100%, politicians hesitate to put their neck on the line advocating for one. New York State has been encouraging 100% assessments, but it is ultimately the decision of each municipality.
What is your assessed value? Is it accurate? The school taxes are handled within each district with separate contact from the municipality tax collector. Make no mistake, buyers are highly sensitive to taxes regardless of price point. Aside from being a hit on the current owners pocket, a home that is higher in taxes than comparable homes will most likely take a hit on resale. Should your home currently be under assessed, it may prove prudent to anticipate a jump in taxes down the road should assessments level.
If your primary residence does not have the STAR exemption attached to it, this is worthy of looking into. There is an income cap associated with this program of $500,000 or less for the credit and $250,000 or less for the exemption. Click here to see more information. Speak with your municipality about other exemptions, credits and relief programs available. The number to contact in State for more information on these programs is 518-457-2036, but try online first. Wait times with State can be painful.
Other options for tax relief are basically leave or grieve. Homeowners can grieve every year if desired but there is only one grieve allowed per year with a hard deadline in May. Check with your local municipality for date. For one scenario, if you are living in a municipality with higher school taxes, particularly without children in the school district, relocation to a lower tax municipality may be a worthy ponder. If you are curious about your current home value, reach out by phone or email.
Click here for a recent LoHud article on assessments.
How to Lose Every Dime of Equity
in Your Home in Two Years
Foreclosures can take up to six years to process in New York State. Tax liens, two.
In May, 2023, a Supreme Court ruling in Minnesota (Tyler v. Hennepin County) raised question on equitable distribution of proceeds upon home sales in tax auctions. In New York State if a home went into tax auction, proceeds from the sale were kept in their entirety, regardless of homeowner equity. For example, if $10,000 is owed in delinquent taxes and owner has $500,000 in equity in the home, no matter. Upon tax auction sale, my understanding is the owner would get nothing. Zero. New York State responded to this latest ruling with a moratorium on tax lien auctions. Tax auctions usually scheduled for October are currently in moratorium until June, 2024 while the powers that be address and decide on a solution for handling going forward.
I shop auctions for investor clients and keep up with what’s going on. If you are in this space or you’re coming into this space, the worst thing you could do is put your head in the sand. If the property goes to auction, control is gone. My understanding is until County takes the Deed, the home can be sold by the homeowner. It may be prudent to leverage this moratorium and the current sellers market to sell your home before the process progresses. My understanding is delinquent taxes and liens will need to be paid at closing, but if there is equity, this should release to the homeowner once debts against the property are paid if sold prior to auction. Find a municipality that offers more comfortable taxes and put this behind you. Call me with questions or to discuss. Seeking attorney counsel could also prove prudent.
Tax Liens – The Numbers in Dutchess County
Per Dutchess County Land Records, delinquent property and federal tax lien filings have actually decreased in recent years versus pre-Covid. In 2019, there were 5298 filings with filings dating back to 2016 in that range up to 6101. In 2020, 4656. 2021 decreased to 4377 and 2022 saw a first bump since 2019 to 4739. I tried to get the same numbers for New York State as a whole, but after many calls and departments all without answers, Dutchess County was accepted for example. In the days ahead, due in large part to increased property taxes, I sadly do expect to see these numbers will rise, which is also likely feeding attention with New York State for timely resolution on how tax liens and auctions are handled going forward.
Top Sales Award – Nailed it again!
Since this crazy market started in June, 2020:
- No expired listings
- Every contract deal has closed for both buyer and seller clients.
- Four sales records set in two counties out of all brokerages and realtors with my clients sales.
- Multiple office top sales awards
- Stemming from the newsletter I publish, a multitude of press interviews seeking expert market condition insight and over twenty feature articles, including The New York Times (Sunday real estate section cover story)
Trends
John Burns Consulting produced an interesting trend report for 2023. It noted communal living being on the rise. It will be interesting to see in the days ahead if the split style home increases with varied exterior design options. The split layout is highly conducive to multi generational living with limited up/down stairs to the side separated by main floor living versus the walking into a more noticeable flight of up/down stairs in a raised ranch. I sold a split in Poughkeepsie last year that had over 3,500 square feet with technically four levels and sold for well over asking. 4 Whitehall Road, Poughkeepsie.
Another trend I noticed in this report is the notion of 55+ communities integrated in pockets into standard communities versus a community of their own. This, again, promotes multi generational living, but on a community level versus within a singular home. I am a huge advocate of multi-generational living with roots in a project in Red Hook called Tradition that brought me full time to Dutchess County to set marketing, pricing and advise on amenities both within the home and community. This traditional neighborhood development epitomizes multi-generational living as traditional neighborhood developments do. There are still sites and also resales available in Tradition, btw. If interested in more information, connect with me.
A few other trends I’ve been noticing along the way. Click link to see 5 second or less video of each:
- Closet rods with built in lighting
- Pop up outlets
- Building a tray into the kitchen and/or butler pantry
Double takes don’t come easy to Realtors. Latest “look at that” moments:
- Skylights Redefined: How about your entire ceiling as a skylight? This $29,000,000 estate is stunning. If you’re curious to see the entirety wrapped into a one minute “social media quickly digestible” version, click here.
- The Lord Rumford fireplace in a 1772 residence: why don’t they make fireplaces like this anymore?
Luxury
Luxury homes in Westchester have been on the upward move, particularly in southern Westchester townships of Scarsdale, Rye and Larchmont.
Many aren’t selling for asking price, either. There have been several that have sold for hundreds of thousands of dollars over asking – up to nearly a million over asking.
Isolating to just the price point of $1,500,000 in the past six months per HGAR/OneKey MLS, 54 listings sold that were asking or sold for $1,500,000. Half of those listings (27) sold for at or over asking price. 22 sold over asking.
I had several listings sell for six figures over asking during the height of pandemic. It has not been my experience to see flights to that level since 2021 in Dutchess County. The highest over asking property sale to date in Dutchess County sold $1,500,000 over asking for $16,000,000, per Mid Hudson multiple listing service. That residence had been on the market for four years prior to Covid and reduced steadily through the years from its initial asking of $22,000,000. Once Covid hit our area in March, 2020, the residence was on the market for $15,000,000. One month later, in April, 2020, it sold for $16,500,000. See listing here.
Latest Testimonials
“We couldn’t have asked for better representation from a Realtor.”
“Smooth sailing. All questions answered. It’s been an excellent experience.” .
See Full Video Testimonial Congrats Jenny and Phil!
Closed 60 Driftwood Drive, Somers
$774,000
September, 2023
Sandi represented the buyers in this transaction
“Sandi brought us our buyer in less than two weeks. She expertly counseled throughout the entire process and ensured the timeline stayed on schedule to closing. An anticipator and diffuser, Sandi gets the job done and is a pleasure know and work with.” I. Dische
Closed 262 Route 308, Rhinebeck
$1,550,000
September, 2023
Sandi represented the seller in this transaction
Top Outdoor Projects that Pay Off the Most
Every project and every market is different, but here’s the estimated cost recovery on the top outdoor remodeling projects identified in the 2023 Remodeling Impact Report.
1) Standard lawn care service 217% (percent of value recovered) Project: Complete six standard seasonal applications of fertilizer or weed control on 5,000 square feet of lawn.
Cost estimate: $415 Estimated cost recovery: $900
2) Landscape Maintenance 104%. Project: Mulch, mow, prune shrubs and plant about 60 perennials or annuals. Cost estimate: $4,800. Estimated cost recovered: $5,000
3) Outdoor kitchen 100%
Project: Install and insert grill, stainless steel drawers, ice chest sink and concrete.
Cost estimate: $15,000 Estimated cost recovered: $15,000
4) Overall landscape upgrade: 100%
Project: Install a front walkway of natural flagstone; and two stone planters, five flowering shrubs and a 15′ tall tree.
Estimated cost: $9,000 Estimated cost recovered: $9,000
5) New patio. 95% Project: Install a backyard 18×16 concrete paver patio.
Cost estimate: $10,500. Cost recovery estimate: $10,000
Enjoy the improvement and return for doing it!
Local Star
Village Pizza in Rhinebeck got quite the play with this video in social media. Instagram, YouTube and Tik Tok all ate this video up. Al and his staff are well deserving of the spotlight.
It’s a wrap! If you are interested in selling and/or buying, give a call and let’s get the ball rolling! There is only one month left to Fall Market. Spring Market. 2024 has a very big question mark on it. We know what is now. Now it is prime to sell.
The foundation of my business is based on referrals. Should you know of someone interested in real estate, I would appreciate keeping me in mind. I will take very good care of those sent my way.
I am active on all social media and most active on Instagram and YouTube. Follow for tips, advice, market updates and sneak peeks in between The Brick @hudsonvalleynest
Would love to hear your feedback and input for future issues! Email me here.
Happy Fall!
Best,
Sandi