Now is still a good time to buy for purchasers with sufficient cash and credit who can take advantage of tax incentives, low interest rates that may soon be rising and some great prices. Even if the real estate market is not fully rebounding, there are attactive opportunities. Given the current absorption, or sales, rate, the number of listings for sale represents over one year's supply in the single family sector and the oversupply is drastically worse for multi-family, commercial and vacant land properties. Look for prices to continue drifting downward as more sellers are forced to adjust their expectations in a market characterized by over-supply, tight credit and a challenging economy. However, with upward pressure on interest rates, homes may actually be more affordable now. For the credit-worthy purchaser with ample cash, there are opportunities... Back to the numbers ...
According to data available through the Ulster County Multiple Listing Service, Inc., which data would represent a subset of total market activity in the county, the number of closings (sales) of single family residences for October, 2009 was 110, up slightly from the 109 closed sales of September, 2009, and up 15% from the 96 closed sales of October, 2008. Is this a result of the first time home buyer tax credit? We may see over the next several months. With 1,430 listings currently "for sale" and assuming a continuation of current sales rates, the current inventory would take about 15 months to be liquidated! In the $1,000,000 and up market, there have been 4 sales in the past four months, keeping pace with the same period last year. With 68 homes currently on the market asking $1000,000 or more, we have well over a five year supply. The upper price range, contrary to some opinions, is being affected just as every other price range.
The median sales price for October, 2009 was $215,250, about even with September's median sales price of $215,000 but down 4% from the $224,250 median sales price of October, 2008. Please note: The median price paid is more a function of buyers' purchasing power and NOT home values. The median price has declined (that is, the active buyers can afford to pay somewhat less) but it's a different house. Last year's $225,000 house was a smaller, lesser house than this year's $225,000 house!
Drawing from a larger statistical base, July, August, September and October 2009 had 419 closings, down 3% from the 432 closings for July, August, September and October of 2008. The median sales price for July through October of 2009 was $210,000, down 13% from the $241,000 median sales price for the same four months of 2008.
In terms of gross sales prices, or dollar volume of gross sales, July, August, September and October of 2009 had volume of about 100.5 million dollars, down 17% from 121 million dollars for the same four months of 2008. Revenue is down about $5 million per month from one year ago!
With over 1,400 listings currently "for sale" at asking prices totaling over $555 million, the real estate market trend will continue its slide. Higher real estate taxes are eroding owners' equity by reducing purchasers' purchase power, so sales prices are likely to decline over the foreseeable term. Higher interest rates will also depress prices. Over-pricing in this market continues to be a dangerous strategy, as many reluctant sellers continue the chase the market downward. The median asking price is currently $279,000, in a market where the median sales price is $215,250! The marketplace is rife with listings that would have sold long ago had they been properly priced. Instead, stubborn sellers and unrealistic brokers willing to sing the high price song sellers want to hear have resulted in current asking prices that are still too high, but lower than sales prices the properties would enjoyed last year. If your listing does not enjoy brisk activity in the first 30 days on the market, check your asking price. You are over-priced and will be chasing the market downward! No amount of promotion can offset over-pricing. The concept that the buyers can always make an offer does not work. The buyers will make an offer on the lower priced competitors. If you are a seller forced to sell and facing a problem with home value less than mortgage balance plus closing costs, you need a true professional in your corner, with the knowledge and experience to negotiate a "short sale" (where the bank takes less than the mortgage balance as a pay-off). Also, if you purchase a house at a price below the assessed value, you probably have a strong argument for an assessment (and, therefore, property tax) reduction. Call me!
Continuing the trends ... For multi-family residences, July, August, September and October of 2009 had 17 sales, down 11% from the 19 sales for the same four months of 2008. Median price held relatively steady, at $181,350, compared to $182,900 one year ago. Gross sales revenue is down 14% for one year ago. The current number of multi-family residence listings, 221, will require over 4.5 years to be absorbed at the current sales rate and over 6.5 years at the current revenue rate.
The commercial-industrial sector shows sales volume down about 36%. And the over-supply is staggering, with the current 158 listings "for sale" representing nearly a 10 year supply at the current year's sales and gross revenue rates. Look for the commercial market to continue a downward trend over the next year, especially in municipalities such as Kingston with a split tax rate, wherein non-residential properties pay more than twice the tax rate of residential properties. If you own non-homestead property in the City of Kingston, it is very likely you are over-assessed and should call me for direction.
Land Ho! July through October of 2009 enjoyed 29 land sales, down 12% from the same four months in 2008. The median sales price is down 27% to $69,000, while gross sales revenue is down 33%. The active listings represent a 7 to 16 year supply, depending upon how you measure absorption.
Continued recommendation: Drop your price if your property is not getting the desired activity. This market is not rebounding to former levels any time soon.
On the buyers' side, its simple: cash is king! Continue saving investment capital and don't invest in depreciable assets. Talk to your accountant, but I would not be inclined to wait for better hunting. And remember: if you're planning on moving into a more expensive (larger) home, the time to "move up" is in a down market. Conversely, downsize in an "up" market.
Also remember: Real estate is one of the few fields where the professional with the best education, credentials, experience and knowledge is no more expensive than the least qualified participant. In fact, the least qualified may end up being vastly more expensive than the superior advice available from a more qualified agent! Now more than ever, as market competition increases and transactions become vastly more complicated, it pays to have the best professional talent on your side! If you're having problems, or have questions, you may e-mail me at jonhoytlaw@aol.com.
About Jon Hoyt Realty, Ltd.:
Founded in 1978 by Jonathan Hoyt, Jon Hoyt Realty, Ltd. has made every effort to provide the best real estate service available. In this pursuit, Jon has aquired a master's degree in business administration, as well as a law degree. Specialized education and experience in the real estate field have resulted in a real estate broker's license, general real estate appraiser certification and certification to teach all levels of salesperson's broker's amd appraiser's qualifying and continuing education courses, in addition to memership in the New York State Bar Association. Continuing this effort, the entire staff of Jon Hoyt Realty, Ltd. strives to bring you knowledgeable assistance incorporated with the highest level of integrity and service. Call us - you deserve the best!
These reports reflect the views and opinions of their authors and are not necessarily the views and opinions of Realty Times.
