Early summer is an active time for buying and selling Hudson Valley real estate. Crowds of people seeking bucolic views, dramatic vistas, a slower pace of life and friendly neighbors emerge from steamy New York City and surrounding areas on weekends. In the country, as they tend to call where we live, they imagine themselves inhabiting some of the houses they drive by. Come Sunday afternoon, many of them don’t want to go back. Practically all of them do, but a fair number of those carry with them the business cards of real-estate brokers.
As we approach mid-2018, the median price of mid-Hudson Valley residential real estate continues to edge upward. Industry data indicates moderate price gains over the past four years. At least until the next recession hits or interest rates go through the roof, expect market prices to keep increasing.
Why? Other factors remaining the same, the marketplace is subject to the laws of supply and demand. As the supply of homes available for sale continues to diminish over time, home prices will continue to increase.
A total of 1424 Ulster County homes (7.7 months of supply) were listed as for sale in the first quarter of 2017, according to the local Multiple Listing Service. A year later that number had dropped to 1053 (5.6 months). This tightening of local housing supply echoes the picture at the state level, which in the same year’s period dropped from 5.8 months to 5.1 months of supply. Both sets of numbers were the lowest they’ve been in many years.
Ulster County’s data mirrored the pattern in neighboring mid-Hudson counties, all of which reported a drop in the inventory of homes for sale. All but Sullivan County reported higher median prices this year than last year.
Using Multiple Listing Service data, we calculated Ulster County residential sales from the beginning of the year through May 31 for this year (581 listings) and last year (599). The total sold price of all Ulster County residential real estate at this time last year was $148.7 million; this year’s sales amounted to $156.3 million. Last year the median house sold after 104 days on the market. This year, it sold after 97 days.
The most substantial upward bump was in price sold. From January through May last year, the median price of a sold residential property in Ulster County was $190,000. In the same five months this year, the median Ulster County sales price was $218,000. That’s a price gain in the median house of 14.7 percent.
Unsurprisingly, the price pattern of median residential properties wasn’t identical in the various sub-markets of Ulster County. The overall trend in the county’s communities varied considerably. We looked at four of them. In Saugerties the median MLS residential property sold for $168,000 this year compared to $184,000 in the same five-month period last year. In Woodstock the sold median price was $393,000 last year and $405,000 this year. In Kingston the median residential price increased from $138,000 to $150.000. And in the New Paltz-Gardiner area the median buyer paid $318,000 this year compared to $256,000 last year.
The number of days on the market before the median house sold varied considerably from a low of 55 days this year in New Paltz and Gardiner to a high of 153 days in Woodstock, also this year.
Sales activity at the higher end of the Ulster County residential market is accelerating. Well-to-do buyers are more numerous. In the first five months of this year, 56 Ulster County properties sold for $500,000 or more, up from 41 in the same period last year. People paying at least $500,000 increased from 6.8 percent of all residential buyers last year to 9.6 percent this year. By contrast, 37 residential properties were sold between $400,000 and $500,000 both this year and last year.
Seeing so many of our near-adult children seek fame and fortune in New York City, we in the Hudson Valley sometimes neglect the traffic coming the other way. Aren’t these newcomers also seeking more successful lives? Without these folks, there’d be a much less vibrant and less pricey market for real estate.
But it’s not only the city emigrants’ money we should be coveting. They would also bring with them new knowledge, new forms of organization, and new disruptive thinking honed in hotbeds of innovation.
Capturing these is what we should be focusing on. Real estate is only a buy-in, a potential alignment.
More than 900,000 people have migrated out of the New York metropolitan area for somewhere else in America since 2010. Not to worry about the Big Apple, though. We should be so lucky. During the same period, some 850,000 international migrants have settled in New York’s metro area — more than in Los Angeles, San Francisco and Miami combined. Add to them the many hundreds of thousands of upwardly mobile millennials, including our kids, from all over America.
The emigrants from New York City who want to stay near it will make a lifestyle choice among three alternatives: small cities, suburbia and exurbia. In choosing where to settle, they will also be making an economic choice. The Hudson Valley is a large region. Economic opportunity will be maximized only in some parts of it. Some places will become what economist Enrico Moretti described as “brain hubs.” The others will be left behind.
I think that those places that have formed the strongest and most imaginative links between the Hudson Valley and New York City will be the most likely to become centers of innovation. While we should be looking for people who want to move their businesses from New York City to the Hudson Valley, these people may not be as valuable to us as those who wish to continue to keep one foot in each.
It takes a lot of brains for a place to become a brain hub. I would much rather we imported more of these brains than we exported our best young brains to Gotham.