Curious about the state of the Hudson Valley real estate market as we bid farewell to the Summer of 2023? It's a mixed bag of good and challenging news, largely contingent on whether you're a prospective buyer or seller.
Hudson Valley Real Estate Inventory
One undeniable aspect dominating the scene is inventory—or rather, the lack thereof. The harsh truth is that there simply aren't enough homes available for sale, and as we transition into this time of year, the situation may even worsen. This dilemma has its roots in the remarkable surge in home prices from 2020 through 2022, but the dynamics shifted with the advent of rising interest rates.
The Impact of Rising Interest Rates
Rising interest rates have played a dual role: they've somewhat curbed the escalation of home prices while simultaneously exacerbating the ongoing low inventory crisis—a situation I find to be unsustainable. Homeowners who secured mortgages at historically low rates in 2020-2022 have little incentive to sell their homes and shoulder a new mortgage burden with double or higher interest rates.
Consider the rate we recently secured for our Hudson Valley home—hovering in the mid/high 5%. Had we locked in a 3% interest rate a few years ago, we'd be enjoying a mortgage significantly lower, saving over $500 monthly. Given such scenarios, the question arises: Why would anyone willingly choose to relocate now unless it's a necessity or an overpowering desire? And when a seller does eventually decide to list their property, it translates to a new buyer entering the market, adding to the competition.
Challenges for Buyers
If you're in the buyer's shoes in the Hudson Valley at this juncture, it's undeniably challenging. The house you could afford a while ago now seems like a distant dream, and even when an enticing, reasonably priced property surfaces, it typically attracts multiple offers. In this market, you can't be at the upper limit of your budget; you need room for flexibility.
Tips for Sellers in the Hudson Valley
If you're selling a home in the Hudson Valley, your prospects are still favorable—provided you have a suitable alternative in mind. However, it's crucial to approach pricing with a dose of realism. Expecting the same skyrocketing price increases seen in the past few years might lead to disappointment. In this market, buyers are discerning, and they can readily spot overpriced listings. If your home is overvalued, you may either receive no offers or face lowball offers that reflect its true market worth.
The End Result
The current market is characterized by a curious standoff between prudent buyers, unwilling to overpay, and sellers hoping to capitalize on past trends as if it were 2021. The outcome hinges on factors like interest rates and inventory levels. Whether interest rates remain high, leading to acceptance of the new market norms with low inventory and sustained price inflation, or they drop, encouraging homeowners to cash in and potentially triggering a price correction—change is inevitable.
Either way things go - something has to give.
Thanks for listening,