High demand, Low Supply in the Capital Region

Healthy buyer demand and inadequate supply continues to be the story for the Capital Region and much of the country. With the inventory of homes for sale still low, the competitive market for buyers shows little sign of weakening.

Pending sales increased 17 percent from July 2019 to 1,546 for the month. Closed sales decreased by 9 percent from July 2019 to 1,187 for the month. The lag is partially due to the high number of transactions jamming the mortgage processing pipeline as a result of REALTORS®’ swift and widespread adaptation of live streaming and virtual tools for listing, showing, and closing throughout late spring and early summer.

“The housing market is well past the recovery phase and now booming with higher home sales compared to the pre-pandemic days,” said Lawrence Yun, National Association of REALTORS’s chief economist. “With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021.”

The median sales price increased 4.5 percent to $231,500. Greater Capital Association of REALTORS® President, Tom McGroder, of Thomas J. Real Estate, said, “Prices are likely to continue to creep up through the remainder of the summer and early fall as many buyers and sellers are negotiating multiple offer situations.” Increased prices often have a difficult impact on first-time home buyers. As negotiated prices climb, already high closing costs do as well, bringing the purchase of a home out of reach to many first-time home buyers.

GCAR CEO, Laura Burns, added that “With home prices on the rise, the passage of the New York First-time Homebuyer Savings Account Program would certainly help many New Yorkers realize the dream of owning their first home, especially with lending rates where they are right now.” The New York State Association of REALTORS®’ proposed First-Time Home Buyers Savings Account Program legislation provides for a state income tax deduction of up to $5,000 per year for individuals and $10,000 per year for couples to help New Yorkers save for the purchase of their first home.

The rate on a 30-year fixed-rate mortgage in July fell to 3.03 percent, according to Freddie Mac. This is the lowest monthly average commitment rate on a 30-year fixed-rate mortgage since Freddie Mac began tracking in 1971. As a result, home buying demand continues as one of the few bright spots in the pandemic-struck economy. With mortgage rates remaining near record-low levels, high buyer activity is expected to continue into 2021.