July, 2022

Trust this Market? NOT!

Hello all,


This is one elongated wacky space we have been voyaging through for some time now. I learned from the shutdown in May, 2020 to the tsunami that started in June, 2020 that the real estate market can change on a dime. I do not trust this market. It's perplexing and defies logic, I have been fortunate to be productively busy so I'm rolling with it.


According to the National Association of Realtors (NAR), home prices are up as of April nationally by 14.8%. Per Mid-Hudson multiple listing service, as of May, 2022, the current average sale price for single family detached homes was up 33.4% with YTD up 10.3%. The current median was up 12.9% with the YTD median up 8%. Prices continued to drive higher through May amidst continued rising interest rates. 


Mortgaged buyers that secured contracts to purchase a home in June are generally late July/August closings.  During the week of June 6-13 interest rates rose .625% in just one week. Questionable whether that rise was historic, but at a minimum it was an eye popper. Any impact has not yet made its way into stats. August forward are going to be interesting months to watch. More on that further down. Inventory is still painfully low but there has been a noticeable uptick in overall activity during the past few weeks. So far, it seems the market of late takes "gasp moments" and then charges forward.


There are wildcards that have been lingering in the sidelines for some time now with some now showing at the table. It feels like we are in the "fair warning zone". Anyone considering selling that is hanging in the sidelines to see how this plays out may want to think twice about waiting for the encore.


That said, here we go...

Multiple Offers


Multiple offers are still alive and well with my listings. That's not the case across the board. Sitting listings that are not solidly price and/or effectively marketed continue to plague our market and contribute to the inventory shortage. January to date, 189 listings have expired (did not sell during the term of their listing agreement) in Dutchess County alone.  That's quite a chunk of inventory sitting in the sidelines.

I just had another sale join clients in the "$100,000+ Over Ask Club." I have had four listings sell for $100,000+ over asking since the start of Covid and all others with the exception of one (that did not roll with my pricing counsel) sell for multiple thousands over ask. While I look forward to a more normalized market for my buyers, I have to admit the thought of not having multiple offers for my seller clients I'm not all together thrilled about.


My clients on this pictured sale had a very tight timeline as an out of state job was set to start. Price, terms and a timely closing were all crucial. Read: No room for hiccups. Accepted offer to close: 30 days. Asking price: $589,000. Sale Price: $720,000. My client shared a 30 second video review on working with yours truly. Interested in what my clients have to say? Click here.    See full listing here.

Buyer Pool and Inventory Available


I have noticed a decrease in buyer pool in recent months, a combination I attribute to increased interest rates, buyer fatigue and certain cash buyers waiting out the market with hopes of increased leverage. While still significantly higher than pre-Covid in numbers, I'm willing to bet I would have had nearly double the offers on at least certain recent listings a year ago. That's not to say some listings aren't still going ballistic. I have one listing right now that is experiencing an intense level of back to back showings. The multi family noted further down. Regardless of some noticed fall off, demand is still high with inventory still painfully low. 


While there was a noticeable uptick in homes available for sale from April (382) to May (505), Mid Hudson multiple listing service still reported down 19.2% versus what had been a historic low May, 2021. Taking a step back to pre-Covid May, 2019 which was considered a more "normal" trending market, the number of homes available for sale was 1149. At 505 homes available for sale in May, 2022 inventory is down 43.5% versus May, 2019. The June numbers are not in yet, but as of June 25, inventory was up to 640.  We are rising, but we have a way to go to hit a balanced market.

Just Listed

51 Stratford Lane, Wappingers Falls

Townhouse style @The Regency by Toll Brothers

Two bedrooms with bonus room

En-suite primary first floor master

Three full/one half bathroom

Full, finished walk out lower level with full bathroom and patio

Painted sky sunsets from generous balcony and entire main level

Premium location within community

For the discerning where only the best will do, this open flow first floor master two bedroom with bonus room, loft and full finished walkout basement is a true showpiece. The detailed featured in this extended Hickory model is a harmonious blend of builder upgrades and luxury custom finishing that starts in the garage and makes its way through the entire residence.  This luxurious and impeccably maintained residence combined with the upscale amenities offered residents of The Regency is simply life as it should be. $569,000. See full listing for more.

Offer Acceptance Tip

Seller Considerations with an FHA Buyer


Varied loan types broaden the scope of homeownership opportunities. I have noticed more FHA mortgages submitted with offers lately.  FHA loans generally offer lower down payments and lower credit scores to gain approval than a conventional loan. However, there is a lower loan cap and certain nuances a seller should be aware of when considering an FHA buyer. 


The FHA Amendatory Clause (in VA mortgages it's called the "Escape Clause.") is important to understand when considering an FHA buyer.   Let's use a working example of a buyer paying $470,000 for a home listed at $442,900, which was the case for the home pictured here at 4 Whitehall Drive in Poughkeepsie which closed last week.


The buyers mortgage was approximately $426,000. The buyer agreed in contract to make up any appraisal gap so long as it appraised at a minimum of $436,000. Beware: the terms of a government backed loan trump any terms in a contract. The FHA Amendatory Clause is an "out" that an FHA buyer can take and get full return of deposit if the house does not appraise at the contract price. This means that even though the buyer was only financing $426,000, if the home did not appraise at $470,000 the buyer could walk with deposit, regardless whether the buyer agreed in contract to make up an appraisal gap. While appraisals aren't as backed up as they generally were in 2021, it can still take two weeks or more for the appraisal to come in.  Once a home is in contract, showings cease.  This means during the wait of the appraisal the home is basically off the market.  Going through offers is a real process, but sound counsel to clients to aid in their decision process is imperative and helps curtail instances of going back on market.  In this instance, there were enough favorable facets of the buyers offer that limited exposure to an appraisal gap so my clients accepted.


The deal went smooth and we closed for $27,100 over asking without a hiccup. As a sidebar, something I thought was super sweet - the owners son changed the last name on the mailbox to the new owners name just before closing. (see pic) After owning the house for over three decades, how's that for a pass of the torch beyond the paperwork? I've never seen anyone do that before and thought it an incredibly welcoming and considerate gesture to the new owners.  See full listing here.

Just Listed

170 Delaware Avenue

Kingston, New York

Two Family - Up/Down

Walk to Kingston Point Beach and Park

Easy access to Empire State Rail Trail

Historic Rondout area

$189,000

This price point for a multi-family in Kingston is certainly ringing bells.  By the end of the weekend, there will have been 19 showings in two days.  If interested in seeing the property, reach out.  My client is not considering offers until Tuesday evening. Click here for full listing.

The New York Times just reposted my real estate section cover story interview from July 4, 2021 in their "Your Money" section on June 6, 2022. One of my clients saw it and excitedly shared I was in the Times. A year later and this feature story "Finding a Diamond in the Rough" is still highly relevant.  Click here to see the article.

Preapprovals and Rate Locks


With the interest rates in flux and the potential impact of adjusted rates on buying power, I have been keeping all buyers up to date with preapprovals reflecting current month regardless whether they formally still have a "shelf life."  This helps better position my buyers when submitting offers as being up to date solid and it also ensures we are staying in the correct search price point.  For my sellers, there appears a red flag in the sidelines that hasn't fully shown itself yet.  There are certain buyers that may not have gotten rate locks before the interest rates took their continued climb.  Some of these buyers could be in contract readying to close.  If the interest rates have risen to a point that their purchase is now beyond their buying capacity there could be some "Houston we have a problem" moments coming. Just throwing it out there.

Investment Opportunity in Northern Dutchess

Four rental cottages/6 units on a lake. Some cottages with full lake views.

First time on the market in over 25 years.

This is a very interesting opportunity. See video for a sneak peek.  Professional video next week. 

92 Thornhill Road, Pleasant Valley


My listing at 92 Thornhhill Drive in Pleasant Valley is getting ready to go off the shelf. If anyone wants to take a last minute peek, my clients will not be considering offers until Sunday evening. We provided buyers with a week and a half consideration window, but we are now closing in on time to make a decision. $429,000. Click here for link to full listing.

Latest Luxury


Here is the latest listing to enter the market in Dutchess County above $20M.

Testimonial


"Sandi is in a league of her own." I. Mbue

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 

It is still a strong sellers market which continues to be marked by high demand and low supply. There has been a decrease in buyer quantity on showing schedules with some properties to more contained levels than 2020/2021. There are a healthy amount of buyers actively engaged with prices still on the rise per May, 2022 reports with Mid Hudson multiple listing service and reports issued by the National Association of Realtors.


Let's see what the next month brings.  One day at a time...


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