May, 2022

Are We Teetering?

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Hello all,


Hot topics and hot weather - here's a little cool down pool action from my latest listing in Clinton Corners. Yes, that's a spring fed pond behind it. I feel like I'm frolicking in fairyland at this bucolic property.


The latest assessment increases, rising interest rates and the stock market wrecking havoc on portfolios. Each has the ability alone to affect buying power, which can decrease housing demand. Each also has the potential to put more houses on the market, increasing supply. Sprinkle war and increased food and oil costs. We'll skip the spike in Covid as it's already a funky enough cocktail.


I have heard talk in some circles about the current market lasting another two years. Personally, I'm rolling day by day and have seen zero indicators to suggest that as reality. Frankly, if you're on the perch about selling, call me and let's get you on and off the shelf as we know what is now. Now we are still experiencing an inventory shortage with still hungry buyers in the market, albeit in what appears less quantity than we have experienced over the past two years. The current climate of uncertainty combined with buyer fatigue has shaken a certain amount of buyers out of the market.


As shared in the February, 2022 issue: "I do expect a finale bump, at least in the front end of Spring market, particularly on properties that check coveted boxes. Past that, anyone's guess."  So far, that prediction has been playing out.  I have a healthy full showing schedule for my new listing in Clinton Corners that checks coveted boxes.  Even though the schedule and feedback are demonstrating high interest, I've had cars lined up down the road for listings during the past two years. My listing in Poughkeepsie is in contract for multiple thousands over asking. Yet, for the first time since Covid, the buyers were all financed. Not one buyer came to the table with cash. It's still discreet for the most part, but my bet is there's a shift underway.


Here we go...

Dutchess County Snapshot

This is so far my favorite driveway entrance in Dutchess County. I took this shot at my listing in Red Hook on Linden Avenue that set an over ask county record. I work in all different types of properties, but bucolic properties hit the sweet spot for me.


Closed single family detached sales are down 25% April 2022 versus April 2021, per Mid-Hudson MLS ("MHMLS")  YTD closed sales down 21%. The current average sale price of $501,970 is up 17% April, 2022 versus April, 2021 average sale price of $428,886.   It is however down from March, 2022 average sales price of $534,350.  YTD (as of April 30) median sales price is up 7.7% in Dutchess County single family detached, per MHMLS. 


Duchess County is still painfully low in inventory with 469 single family detached homes currently available for sale. In April, 2020 (just after Covid hit), there were 949 active listings on the market. In April, 2019 (which was considered a more "average" year) there were 1,016 single family detached homes on the market in Dutchess County to share perspective.  Dutchess County had been hovering in the 370's in inventory available for several months so the fact that we are at 469 homes on the market is an improvement, but at 46% below 2019 numbers, we still have a way to go.

The historical relationship between Interest Rates and Median Sale Prices

Graph courtesy FHLMC demonstrates direct correlation between median home prices and interest rates with one going up while the other goes down.

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Buying Power


I had multiple cash buyers opt to step back for a bit after the stock market did a number on their portfolios this past week. I'm hearing the same from colleagues. While 5.5% may not sound high to those that have seen higher interest rates through the years, the reality is we have not seen mortgage rates this high since 2009, per Jim Gallagher with Fairway Mortgage. Just as Covid entered and changed our world on a dime, the interest rates took a sudden hike since the February, 2022 low of 3.125% to approximately 5.5% as of 5/12/2022.


Let's plug some numbers in for an example of how this translates to buying power:


$500,000 Buyer in February, 2022 at 3.125% interest. Assumptions: 

30 year conventional, 740 credit score, 80% mortgage/20% cash down ($400,000 loan). Taxes not factored as they vary. For purposes of this example, principle and interest only.  


In this scenario, the buyer would have a monthly P&I of $1,714. If all remained constant except an interest rate adjustment to current 5.5% and the buyer wanted to maintain the monthly P&I of $1,714.00, that buyer now has the ability to take out a $302,000 loan rather than $400,000. Net Net - buying power in this scenario decreased by $98,000 since February based on current interest rates. It's starting to take the wind out of some sails, but for others hunger has increased that much more in an effort to "get in" before further increase.


I just interviewed Jim Gallagher, President of Fairway Mortgage and Cathy Kantrowitz in her capacity as Assistant VP Residential Underwriting Manager with Rhinebeck Bank. It's a very informative interview if interested in the current state of the mortgage industry, do's and don't with obtaining a mortgage, process and FHA v. Conventional.  Check out the interview here.


Mortgage issues with potential tax adjustments?


There was a segment of the interview above that keeps lingering in my mind. The potential impact of adjusted upward tax impact on buyer ability to obtain expected financing. This part of the interview left me with a sinking feeling we could see a bit of a mortgage mess coming as it relates to increased taxes adjusting a buyers budget mid stream. To be adjusted at the outset is one thing. We change gears and look in a lower price point. To be adjusted once in fully executed contract on the way to the closing table is a whole other ball game. Can't help but wonder if some currently or soon to be contract buyers have last minute issue with final processing if increased assessments raise taxes. Both Jim and Cathy acknowledged this potential issue during the interview.   See the interview here.

Latest Listing!

Clinton Corners Township

Rhinebeck Central Schools

$589,000

Spring-fed fish stocked pond, in-ground pool, the perfect blend of level and rolling wooded landscape on a quiet no outlet country road.  Whether full time or retreat, enjoy country exhale in full glory at this beautiful property!  


The three bucolic acres gifts privacy, recreation and peaceful respite.  Mother Nature has its own pond irrigation with stream entering one end while cascading just enough to enjoy the sweet sound of waterfall at the other before meandering on.  Impeccably maintained and move-in ready.


See Full Listing Here

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Assessments and the Levy


I have been speaking with several municipality tax accessors as well as county in Dutchess throughout Covid in an effort to keep a pulse on tax changes for my seller and buyer clients.


Many towns with 100% assessments decided on "trending" as a means to reach 100% assessments after the explosive average sales price growth in our region. With trending, a municipality considers different factors to evaluate sales changes and then adjust assessments accordingly. Usually if a municipality trends, they are staying at 100% assessment. For example, Clinton Corners assessments went up 19% based on trending with Red Hook up 17%.  


On May 1, 2022, updated tax rolls were due for municipalities increasing assessments. My understanding is homeowners must receive notice if there was an adjusted assessment no more than 10 days prior to their municipalities grievance deadline. This deadline can vary, but for most towns in Dutchess County, for example, it’s the third Tuesday in May. Assessments can be grieved once per year with a hard deadline. If you miss the deadline, the next opportunity is May, 2023. Regardless whether you plan to sell (call me!) it is worth grieving if you have documentation warranting since buyers are highly sensitive to taxes. If your taxes are noticeably higher than comparable homes, it could affect your ultimate sale price. 


Grieving is not a slam dunk for reduced assessment. It does need to be proven warranted and agreed to municipality satisfaction that the taxes are not in line with comparable homes in the same community. I know there are many unhappy campers out there with these assessments. There was an average sale price increase realized in Dutchess County of approximately 50% since 2020 so it is a tough call what to expect in grievance.  I know professionals that help file grievances. Should you need, reach out.


There is much gray in the tax arena, but generally speaking, the levy is what can impact an increase in taxes, not necessarily the assessment as tax rates often go down when assessments go up. It is my understanding that the 2% cap in Dutchess county cannot be broken without a vote. For school taxes, I believe the levy is part of the budget vote and for property there is a public board member vote. This coming Tuesday is school budget vote in Dutchess.  


Interested in which municipalities are at 100% assessment in Dutchess County and if not 100%, how much they are? Click here for the County assessment percentage list.  


Here are links to the State’s website that illustrates how a tax bill is calculated and what happens to tax bills in different scenarios.   

  1. Tax Rate Calculation – https://www.tax.ny.gov/pdf/publications/orpts/taxworks.pdf 
  2. Tax Bill Scenarios - https://www.tax.ny.gov/pdf/publications/orpts/asmt-vs-taxes.pdf 
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Foreclosures


The New York Foreclosure Abuse Prevention Act just passed in the Senate last week and is before Governor Horchul for signature. This is a controversial and retroactive bill with seemingly primary focus on the statute of limitations in relation to foreclosure actions. Banks do not appear pleased. To hear one bank perspective, I interviewed Cathy Kantrowitz, President of the New York Mortgage Bankers Association.  Click here for a two minute interview I had this week with Ms. Kantrowitz on the Act.  For more, click here for an article on the Act in Mortgage News Network. 

Country Living Magazine

The 1790 Dutch barn on 32 acres in New Paltz I sold that had once been the home to Adair Winery and Vineyards was slated for editorial feature in May, 2022 newsstand edition of Country Living Magazine (1.8M paid subscribers - yeah!). I've been looking across three counties for it and have not yet seen.  If anyone has the May, 2022 edition, can you lmk if the barn made it in as that will fuel continued quest to find.  Thanks!

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This listing had multiple offers and is now in contract for noticeably over asking.  For the first time since the onset of Covid, all buyer offers were mortgaged.


TimesUnion editorially featured this listing and myself in interview in their April 28, 2022 "Fewer Homes for Sale, Median Prices Still Up". Click here to see the article.

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The "feel good" deal. There was a definite moment of dicey whether my clients would gain the accepted offer, but we nailed it!


Such a pleasure working with these buyers. My client humored me with a "buyer to buyer" message of encouragement to tired buyers out there to hang on and have faith. See Troys one minute rally to buyers  by clicking here.  

Latest Testimonial


"Sandi brought us multiple offers over asking within two weeks after trying to sell our home for three years with two other realtors." R. Cohen


15 N. Hinterlands, Rhinebeck.  $1,800,000 - Represented Buyer and Seller


See Full Listing Here or Enjoy a four minute in heaven house tour here.

Commercial/Residential/Office

Five acres in prime visibility location

Just south of Hudson

Catskill Mountain views

Two parcels - $300,000 for both.


Two parcels of commercial land within minutes of hopping Hudson (adjacent 2 acres and 2.8 acres with one being a corner lot.)


See Full Listing Here 

Keeping me in mind would be appreciated for referrals of friends/family seeking to align with a professional real estate partner.  I will take very good care of those sent my way.  Stay well.


Best,

Sandi

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Sandi Park

Associate Real Estate Broker

Global Luxury Specialist

Coldwell Banker Realty & Global Luxury

M: 914-522-6282

Email:  spark@hudsonvalleynest.com

Serving the Mid Hudson Valley and Global Luxury Markets