Home Prices Up, Inventory Down
At this point in the year, there is a good sense for how the housing market is likely to perform for the foreseeable future. While it remains true that sales prices are running higher and inventory options are still relatively low, buyers are beginning to find some wiggle room at price points and geographies throughout the region and in points north and south. Housing affordability remains strong in the Capital Region enabling those with a median annual household income of $69,000 to more than afford a home at the median sale price of $224,580 (assuming a 20% down payment). New listings rose only slightly (.03%) compared to 2018 further straining the inventory to a drop of 11 percent (a 5.7 month supply).
Prices crept up by 6 percent over last July and they are expected to continue that trend through the fall season. Despite the Capital Region’s increased growth in population and an increase in median income rates, pending and closed sales decreased by 7 percent and 8 percent respectively from July 2018. This is most likely due to a lack of affordable supply.
“Demand is high for mid-to-lower priced homes but we have an insufficient supply which is pushing the prices up,” said Greater Capital Association of REALTORS® President Jay Christiana, Principal Broker of Berkshire Hathaway Homes Services Blake Realtors®. “Low inventory not only impacts existing home prices but also new construction,” he said. The numbers are proving Mr. Christiana right – the median cost of new construction was an 8 percent increase to $412,444 and those new homes are not sitting on the market long. New construction reported 60-70 days on market.
During the record-setting 121-month economic expansion, the unemployment rate has dropped from 10.0 percent in 2009 to 3.7 percent, yet many consumers continue to struggle financially. GCAR CEO, Laura Burns, commented that “Low unemployment and historically low mortgage interest rates have certainly helped facilitate housing affordability and the pursuit of homeownership throughout our region. While wage growth has occurred, it’s tough keeping up with the cost of living in New York State.” Overall, in 2018 the Census Bureau reported New York State’s population declining faster than any other state in the country. But the local outlook is brighter – Burns went on to state, “The Greater Capital Region is one of the few areas in the state that has experienced an increase in population, jobs, and wage growth. Albany has a lot to offer.”