Hudson Valley Real Estate Market Update: More Homes, Higher Rates, No Certainty

By   |     |  Hudson Valley Real Estate Market

Is it a buyer’s market yet? Not quite. But things are looking up for buyers wanting to settle in the Hudson Valley.

For the first time since 2018, the region has seen three consecutive quarters in which home listings increased. It’s a modest gain in listings that still doesn’t reach pre-pandemic numbers, but there are more homes to choose from. Also, while the national market noted fewer sales, Hudson Valley property sales increased for the first time since 2021.

Despite the increase in listings, Lyra Blumenthal, a realtor at RE/MAX, does not consider the market to be balanced just yet. “We are at about a point of inventory of about four and a half months,” says Blumenthal, who sells homes in Ulster and Orange counties. “What that means is, basically, if nobody listed their house from here on, we’d have four and a half months of inventory to sell. That is considered a seller’s market. Six months is where you start seeing a more balanced market. So while inventory is up a little bit, it’s still a strong seller’s market.” 

Heather Rieker of Sotheby’s International Realty sells properties in Ulster, Greene, Dutchess, and Orange counties. Her real estate career began during the pandemic. “This is the first time that I’ve had more sellers than buyers,” says Rieker. “I started during Covid, so it was like just drinking from a fire hose of buyers.”

Realtors caution that it’s best not to generalize, since some markets do better than others. Residential properties may differ from investment properties. “That dichotomy means that the market reacts differently to each type of inventory,” says Jonathan Greene of Country House Realty in Livingston Manor. “Traditional residential home sales are still strong, as the true volume of inventory is still low due to the golden handcuffs of sweet interest rates on people’s primary mortgages. However, those that bought as a second home or an investment may be seeing a slower sales cycle than expected, and buyers who are becoming a little less tolerant.”

Home prices continue to rise, according to Pattern for Progress’s third quarter Hudson Valley Housing Market report, and, because prices were so high for so long, sellers may have trouble taking constructive feedback when it comes to establishing a realistic sales price. “There is still a disconnect in some parts between sellers and the market,” says Greene. “Sellers still want to ride the wave, but the wave isn’t the same in all markets and it becomes more of a dribble as winter approaches, unless you are looking for a ski chalet.”

That disconnect can work against sellers, according to Rieker. “What’s happening when homes are priced too high is that I’m watching them sit, because buyers don’t want to take a chance on the lower offer,” she says. “Sellers think that if they just test it, it will work.”

A home priced too high may sit for a while. “I had a million-dollar listing that was not quite the right price,” says Rieker. “Reductions did not happen quickly enough and it sat. I have one at $750,000 that has an incredible special feature. That one got a ton of interest, but then I’ve done some more in the under-$400,000 range and that’s a sweet spot.”

High interest rates are causing homeowners to hesitate before putting property on the market.

“Do they want to sell off a 2.75 percent [mortgage] to buy into a 6.5 percent rate at a higher price point?” asks Greene. “Most are saying no.”

High interest rates also discourage buyers. “When it went from three-and-a-half to six percent, it knocked a lot of people out of the market,” says Blumenthal. “That’s a huge increase in your monthly payment.”

Many buyers Rieker works with are cash buyers and cautious. “I’m hearing from other agents that buyers who come to my open houses to look at my listings are just stretched a little too thin,” says Rieker. “It’s like they’re thinking, ‘We are waiting, maybe it’ll get a little better. We will jump on something if it’s just right.’ But otherwise, I think people feel nervous about getting themselves locked into a high interest rate.”

Interest rates did fall in September and dropped again in October, which Blumenthal sees as a plus.  “It needs to come down more before we’ll really see a surge,” he says, “but it’s definitely helping.”

For Greene, the rates aren’t down enough to influence either buyers or sellers at this point. “But they should pay more attention to it,” he says. “People were spoiled by abnormally low rates, but if they wait to see three percent again, they may be waiting forever.”

While Greene sells throughout the Hudson Valley, he focuses on towns with favorable short-term rental regulations, favoring Saugerties, Windham, and Cairo, as well as fixer-uppers for flipping.

“My clients are looking for what I call ‘learn-and-earn properties,’” he says. “Properties they can use, but also make money off of while learning the ins and outs of being a short-term rental manager and landlord.”

All three agents are confident about the strength and direction of the local market. “When you read a lot of national reports on the housing market, it’s a little more negative,” says Blumenthal. “I still feel that the Hudson Valley is a very strong market. We’re still selling. It may have stabilized a little, but it’s still a very desirable place to live and people are still coming here.”

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