Trends in the real estate market

The big news in real estate these days boils down to two things—interest rates and inventory—according to local real estate brokers and salespeople.

“We have a lot of people looking, but we do not have a lot of houses,” says Rosie DeCristofaro, president of the Sullivan County Board of Realtors and a licensed real estate broker with Callicoon Real Estate, LLC. “The first-time homebuyer, especially, is having a very hard time finding a house. Depending on their financing, they need a move in-ready home.”

Interest rates have a direct effect on sales, according to Lynne Freda, a licensed real estate salesperson with Matthew J. Freda Real Estate in Callicoon, NY, and president-elect of the Pike-Wayne Board of Realtors. “Buyers tend to pull back, even though 7.5 percent was the norm for many years,” she says. “We have stories from buyers who bought their first homes in the 1980s for 14-plus percent! But we were so used to 2.5 to 4 percent for so long, 7.5% seems excessive now.”

Banks are beginning to shy away, too. “Monthly payments are skyrocketing, and lenders are actually denying applicants due to higher payments and insufficient income,” Freda continues.

That trend’s been noticed by Carol Malek, a broker with Malek Properties in White Lake. “I noticed a fair amount of properties went from pending to active recently, indicating that people are being declined for their financing,” Malek says. “Also, there is very little existing inventory and hardly any new inventory coming to the market. People are not selling. Maybe they can’t find something wherever they want to move to, since the low inventory is nationwide.”

A slow market doesn’t mean stagnation, though. “When a home under $350,000 comes on the market in updated condition, it will most likely get multiple offers,” says Freda. “That seems to be the sweet spot for most of our buyers, $350,000 and below.”

Condition matters

The market has forced sellers to be more thoughtful about pricing and condition, too. “Some homes that are lingering on the market have been coming down in price, and things that come to market that are especially desirable for whatever reason—such as location, style, pricing—are still getting multiple offers,” Malek says. “This shows that the buyers are there, just waiting, and have become pickier. The inventory being reduced was probably priced too high to begin with, and sellers realize that they need to show motivation.”

“Flippers”—buyers who fix up a newly purchased home to sell at a higher price—are still active around here, too, according to Freda: “Many buyers bought houses  to ‘flip’ and resell, and we are seeing many of those. In some cases, a home sold in 2020, again the end of 2021, and now in 2023, sold for the third time in three years, at a higher price each time.”

Resales are appearing, too, Freda notes. “Some buyers who were able to work from home are now being called back to work in person at the office. The commute to New York City is too great to do that every day, so we have seen some people selling.”

Non-local buyers and renters

Most buyers around here still tend to be from out of town, the real estate professionals concur. “A large percentage of our buyers are still coming from the New York/New Jersey greater metropolitan area,” says DeCristofaro. “If New York makes good on its promise to bring broadband to rural areas, the people who used to spend two days here and five in the city will move up here and spend five days here and two in the city.”

The rental-property bandwagon that began during COVID has been saturated, the brokers say. “We used to do a robust business with rentals; however, that has changed since 2020,” Freda says. “Many, many buyers bought homes as short-term rentals or in some cases, long-term rentals, so they now turn to Airbnb, VRBO and other rental sites. However, because so many buyers had the same thoughts… the term ‘AirbnBust’ has become popular, because there is a glut of renters. Savvy owners have learned to drop their rental prices just below the going price on the internet rental sites and they’re still renting well.”

Malek says the rental prices remain at a luxury level. “Rentals remain scarce and rents are still high,” she says. “Many people are looking for decent rentals, which seem to go quickly; however, most really nice rentals are not affordable to many of the tenants currently looking.”

Some tips for buyers and sellers

If you’re looking to buy, patience is a virtue: inventory is slowly improving, and home prices will go down if they were priced too high to begin with, Freda says. Get pre-qualified for a mortgage, and do not choose this time to buy a boat or an extra car, she adds. “Have your finances in order so you are ready for the moment you find ‘The House’; you’ll be in a better place if you are competing against multiple offers. Most importantly, do not make any large purchases like appliances or a vehicle before looking for a home. Your credit rating will take a hit, and you may not qualify for a mortgage at that point.”

Do some of your own legwork in looking for a house, DeCristofaro says: “Keep an eye on what comes on the market, and call your agent immediately if you see something you like.”

Sellers need to polish up their property in order to sell it at the price they want. “Get your home spruced up to the best of your ability.” Freda says. “Look at your home with a buyer’s eye: clean up the yard and landscape. Paint your front door if needed. Secure that loose step! First impressions are everything to a buyer. Make sure the inside is decluttered, so the buyer sees the bones of the house, not your stuff. They’re buying the home, not your possessions.” 

Be mindful of what to fix before you sell. “Painting brightens everything up and gives it a fresh smell to boot,” Freda continues. “Replace worn throw rugs or remove completely. Skip replacing carpeting or scuffed floors, because buyers have their own tastes and preferences—chances are, they may tear out what you put in anyway. A seller can always offer a credit if carpeting is terribly worn or pet-stained. Speaking of pets, take them with you when you vacate for showings. A buyer wants to see if your home is a good fit for them, so they don’t want you hovering or talking up your do-it-yourself improvement projects!”

A crystal ball would come in handy, to see when and if the market will change. “We’re still in the ‘COVID’ and ‘post-COVID’ market… everything that was for sale in 2020 and 2021 sold,” Freda says. “That forced pent-up demand in buyers, and when inventory is low, demand rises—and so do prices. We wish we could predict when it may change, but if we could predict that we’d all be millionaires.”

Malek sees a light at the end of the tunnel: “I have been told that during the first quarter of 2024, the rates will come down a little and spark some new movement. Looking forward to that!”