Real estate demand in the capital region still high, despite a low inventory

Busy, contested inventory and sellers’ market – that’s how Laura Burns, CEO of the Greater Capital Association of Realtors (GCAR), would rank the region’s current real estate market.

Real estate market ratings are not necessarily in favor of buyers, but that doesn’t prevent them from owning a home.

2021 association data third quarter report showed that the overall median selling price increased 12.6% to around $ 250,000 in the region.

Looking closely at the numbers, Burns said the median sale price appears to be rising to $ 265,000 now, but still lower than the median price of $ 398,000 for new construction.

Houses also sell faster. The average home spent around 26 days on the market in October, up from 49 days around the same time last year. Single-family homes, which make up most of the region’s stock, recorded the strongest sales while losing the fewest inventory, according to GCAR.

Market-wide inventory levels have fallen 22.3% and new builds lag behind due to supply chain disruptions forcing builders to renegotiate contracts due to rising costs materials.

Burns said the low inventories and high prices that make up the market are in part a lasting trend in the continued migration of urban dwellers to the upstate over the past two years.

“People always look to stay in a single family home rather than an apartment, where they don’t have any outdoor space,” she said.

The decline in new construction is straining the inventory of the region. In October 2020, 221 new single-family constructions entered the market. In October, GCAR registered only 121 newly built listings. Demand is dynamic, but housing supply constraints must be maintained.

Burns said the region only had two months of inventory left, meaning there would be nothing to sell if no new listings were posted in the next two months.

The combination of people staying in their homes longer, new construction stalled and more transplants is challenging the market. Despite rising prices and limited inventory, buyers still compete in bidding wars because mortgage rates are so low.

Jeff Pinard, secretary of the New York Mortgage Bankers Association and chairman of Paragon Home Loans, said rates were “historically low” and now was “a good time to buy a home.”

Pinard referred to Freddie Mac’s primary rate survey, which determined the average rate to be 3.11%. Someone with a good borrowing history and a high fico (fair Isaac corporation) score who puts 20 percent on a house could earn a rate of 3 percent, Pinard said.

But the Federal Reserve System is changing its attitude to inflation, and low mortgage rates may soon be gone.

“They don’t believe it’s as transitory anymore as they once thought,” Pinard said. “The Fed has indicated that it will slow down its bond purchases faster than previously announced with the possibility of raising rates in 2022.”

So, future owners can seize the opportunity as long as the window is there.

Redfin Statistics, a real estate brokerage firm, determined that homes in the metro Albany area received multiple offers, selling about one percent above the listing price in 14 days. The “hot houses” sold nearly five percent more and were on hold for a buyer in six days.

Metro Albany’s listing prices were on average around $ 237,000 in November, a 6.5% jump from last year and sold out after 18 days from 11 days last year, a reported Redfin.

Redfin’s deputy chief economist Taylor Marr noted that it also doesn’t hurt that the region is still affordable and “lagging behind” the national trend of home price growth.

The region’s median selling price remains significantly lower than the national median price of $ 363,000, Burns said. And for the 12 months from October 2020 to September 2021, pending sales for the region increased 3.8%.

However, the winter slowdown season is approaching.

Real estate markets generally see fewer listings and transactions in December and January as people avoid moving into the cold and settle in for the holidays. But Burns predicts that activity will always be buzzing.

“I don’t think they’re going to slow down to the rate they usually do,” she said.

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