Election Year Slows Down the Hudson Valley Real Estate Market

By   |     |  Hudson Valley Real Estate Market

A little over two months out from the presidential election and the political climate is far from normal. The same goes for the housing market.

Those macro impacts cannot be avoided for both home buyers and sellers right now. Most people are pausing their searches entirely until things settle down after the election. That, coupled with an already stressed-out market already due to the still-remaining impacts of the pandemic and a worsening housing crisis, is creating a lot more pressure in the region.

While that pressure is leading some people to continue their all-cash offers, others are waiting it out until either after the election or after the winter entirely. There is a continuous lack of inventory and high demand. Meanwhile, realtors are gearing up to see what the impact of the National Association of Realtors settlement will be.

“The latest is that the market has been very quiet,” says Richard Stoll, Associate Broker at TKG Real Estate, who sells on both sides of the river, focused on Greene, Sullivan, and Ulster counties.

Election Year Impacts

“Election years are typically an unusual market,” says Stoll. “The more unsure people are about the future, the more social and psychological unrest that people are experiencing, the fewer people get into the market, both as sellers and buyers.”

Stoll anticipates that as soon as the election is over, even as quickly as the next day, the market is going to bounce back and make way for the winter. Although winters are usually slower times in the housing market, during election years it looks different. The realtors we spoke with predict there will be more action between Thanksgiving through early March than usual.

“It doesn’t matter who wins,” says Stoll. “The uncertainty will be gone and with interest rates coming down, we’ll get people willing to get into the market.”

Sandi Park, real estate broker at Coldwell Banker Realty and Global Luxury and founder of Hudson Valley Nest, is noticing the same change in the market due to the election year.

“Any election can breed uncertainty,” says Park. “People tend to feel less confident making large purchases, and a house definitely falls into that bucket. So you do see people start to pull back a bit. The frenzy doesn’t exist anymore.”

The Low Mortgage Conundrum

The frenzy is certainly dying down across the region. Hudson Valley Pattern for Progress’s most recent report doubled down on what we’ve been seeing for quite some time: People are not moving. “Homeownership has increasingly sprinted away from the middle class in the Hudson Valley,” says Adam Bosch, president and CEO of Newburgh-based think tank Hudson Valley Pattern for Progress.

The report found that the housing availability and affordability crisis is deepening, affecting would-be homebuyers across a wide spectrum of incomes. “There’s a clog in the pipe,” says Bosch. “The pipeline would be: You leave home for college, maybe live for a few years in an apartment, you get a spouse, and then you reach that first rung of the ladder of home ownership. That continuum is now clogged. It’s clogged at that graduation part from rentals to homeownership.”

Stoll is seeing the increased stagnation himself too, largely from people who currently have extremely low mortgages. If they decide to upgrade or move, they’re swapping a mortgage rate of around three percent and doubling it, if not more.

“A lot of sellers are not getting into the market at the moment because they would have nowhere to go with comparable expenses,” says Stoll.

That means there is very little inventory on the market. The days of people coming to the region and seeing seven or eight houses a day for a week straight are long gone at this point. More than ever, homebuyers want something that is move-in-ready. The domino effect is that buyers are willing to bend a little bit more than they used to with their wish list.

Middle-Range Homes Are Hot

One thing that’s clear is that those middle-range homes are hot. Both Park and Stoll have seen homes in the $300,000 to $450,000 range go fast. These people might be selling because they need to move for work, are looking to get their children placed in a new district before the school year begins, or another circumstance that is pushing them to sell at this very moment instead of waiting.

With fewer buyers on the market, sellers are hoping to entice buyers with a fair price. That’s not to say that those homes aren’t receiving multiple offers, including over asking price and in all cash. Cash buyers have kept the prices high, but “not artificially so,” Stoll says.

“In regard to houses that are in good condition and good locations that are well priced, there is a bidding war,” says Stoll. For example, he put an offer on a house two days ago for a couple and within a couple of hours, the sellers said they would go with the highest and best by 5pm. “That was it, they lost out. It was very competitive. I’ve seen that several times now. Good houses are still being treated like it’s 2020.”

Park has also noticed that certain homes remain bountiful with offers but for the most part, the number of buyers has decreased with the rising interest rates in 2022. Does that mean we are in a seller’s market now? Not exactly. “It’s not the same type of seller’s market that we were in,” says Park. “Houses that are going on higher than they should or are not effectively marketed are sitting. You are seeing houses that expire and don’t sell during the term of their listing agreement.”

For example, she had a house in Dutchess County that checked a lot of boxes: first-floor primary bedroom, private backyard, well-constructed home. She thought it would go at least $2,500 to $5,000 over the asking price. It only went $1,000 over. “It was a real signal to me that it’s not the level it was,” says Park. “It’s more contained.”

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