Prices Are Rising Along With Demand
The good news is – and there is some – that at the national level, economic analysts predict residential estate will continue along a positive line for the rest of the year. This remains to be the market outlook around the Capital Region right now. Last month 1,487 new listings were posted spending an average of only 59 days on market.
Pending sales of existing homes declined by 10 percent compared to September 2017 to 887 for the month. Closed sales decreased by nearly the same at 9 percent from September 2017 to 965 for the month.
As has been the trend in the Capital Region throughout the summer season, listings for new construction rose adding to the available inventory. 232 new construction homes were listed last month – an increase of 6 percent over last September. Sales of new construction were also on the rise last month with an increase of 7 percent and a median sale price of $373,000; an increase of 6 percent from September 2017.
Prices for existing homes were up as well with the median sales price increasing by 6 percent to $215,000 which, even with the recent rate hike still remains quite affordable as compared across the country, which is experiencing an overall median sales price of $258,000 and median price in the Northeast landing at $286,200, up 4 percent from September 2017.
Prices are likely to continue to rise if buyer demand begins to squeeze the available inventory. Inventory levels market-wide decreased 9 percent to 5,436 units. Overall months’ supply of inventory was down 10 percent to 5.4 months impacting the percent of original list price received at sale to rise to 96.8 percent since last year.
Regarding First-Time Home Buyers, NAR Economist Lawrence Yun commented that “Rising interests rates coupled with increasing home prices are keeping first-time buyers out of the market, but consistent job gains could allow more Americans to enter the market with a steady and measurable rise in inventory.” Greater Capital Association of REALTORS® President, Susan Sommers of Better Homes and Gardens Tech Valley Real Estate agreed and stated, “This is why New Yorkers need Governor Cuomo to move forward on the New York First-Time Home Buyers Savings Account. The creation of a first-time home buyer savings account that provides a state income tax deduction of up to $5,000 per year for individuals and $10,000 per year for couples will help New Yorkers save for the purchase of a first home.”
Laura Burns, CEO of GCAR added that first-time homebuyers in the Capital Region are experiencing a variety of challenges right now, not only in inventory but also in costs. Burns noted, “New York State’s closing costs are some of the most expensive in the country. On a $225,000 home, a first-time homebuyer can expect to be presented with closing costs of about $5,500. Coupled with the strong lack of entry-level inventory available, particularly in new construction, some potential homebuyers may be forced to remain renters or in their parents’ basements.”