What a half-year it’s been for the Hudson Valley economy! To say it’s been an unusual six months is surely an understatement. With record low unemployment, a booming stock market and manageable inflation, the first couple of months seemed to indicate continued clear sailing for the prolonged period of overall prosperity.
But then what seemed at first but a sudden squall turned into an economic hurricane, causing catastrophic damage. The pandemic brought the entire economy to an abrupt halt. Demand in many industries collapsed. The unemployment rate rose precipitously to its highest point in 80 years.
Since then, the Hudson Valley has been trying to dig itself out of the hole. It’s become increasingly clear that the new normal, whatever that turns out to be, will be radically different than the old normal which many had expected to return. Entrepreneurs started combing through the economic ashes for embers that still had a spark to them. And most of those furloughed from the labor force discovered that their previous jobs didn’t exist any more.
Change beneath the surface
The market for residential real estate, adjusted as it always has to be for geographic considerations, mirrored the larger picture. Rolling along in January and February, the Hudson Valley marketplace for real estate froze in place with the arrival of the pandemic in March, with much of the residual activity reflecting the completion of pending transactions.
Beneath the surface, however, change was taking place. Certain demographic characteristics – more gig workers, more knowledge work done off-worksite, the expansion of virtual communications, a greater amount of office space needed per worker – that had assumed new importance seemed likely to continue whatever underpinnings the economic recovery developed. How would these shifts change buying habits when it came to Hudson Valley real estate?
In the second quarter of 2020, figures derived from Multiple Listing Service of Ulster County data show that the number of single-family homes changing hands in Ulster County decreased to 282 transactions from the 392 reported in the same period last year. The median price of sold residential properties increased to $274,750 this year from $235,000 – a robust 16.7 percent year-to-year hike. Despite the precipitous drop in the number of transactions, moreover, total sales volume for the most recent quarter were $97.1 million, within shouting distance of last year’s $110.7 million for the same three months.
The shape of the upturn
What’s perhaps most interesting about the MLS data is how little it tells us about the future direction of the Ulster County real-estate market. In this sector at least, the upturn curve is likely to be steep and dramatic.
An ever-optimistic crowd, real-estate brokers are always in a bullish mood about the prospects for their industry. They sell more real estate at higher prices that way. But this time various brokers in the Hudson Valley and the Catskills are reporting an almost unprecedented increase in interest, mostly from clients in the New York metropolitan area. This is not just the result of a late spring thaw. Reports of multiple all-cash offers at asking prices or even above, people flipping properties one after another, and bidding wars where money almost seems no object are common. For the moment, it’s a seller’s market.
In order to get a deeper look into what’s happening in Ulster County, let’s look at trends in various significant sub-markets. Spoiler alert, however: Those looking for drama are going to be disappointed. In this roller-coaster marketplace, what’s happening today is not what was happening as recently as a couple of months ago.
Since local markets don’t have a sufficient number of transactions to provide reliable results, we looked at the first six months of the year of single-family residential properties rather than at just the quarter ending at the end of June. The sub-markets scrutinized were Kingston, Saugerties (town and village), Woodstock, Marbletown, and New Paltz and Gardiner.
Activity in the sub-markets
Kingston was the only local market where, as in Ulster County as a whole, the number of completed transactions this year (73) were lower than in the same period last year (97), Moreover, the median sold price in Kingston dropped from $206,700 last year to $203,000 this year. It’s unlikely this means that there isn’t as strong an interest in Kingston as elsewhere, but that the first-time buyers that Ulster County’s small city attracts, disproportionately Brooklynites, take a little longer to get their financial act together.
Saugerties saw a modest increase in completed transactions from 82 to 90 single-famly properties, and an increase in median closed price from $202,406 during the first half of last year to $229,000 this year. At the top end, 30 Saugerties properties sold for $300, 000 or more this year as compared to 16 last year.
Woodstock, where the median house sells for more than $400,000, has been a favorite second-home destination for moneyed Manhattanites for generations. During the first half of 2019, 20 Woodstock homes sold for $500,000 or more. This year, that number increased to 25. A total of 56 homes in all changed ownership, up from 46 last year.
Marbletown is an up-and-coming community which has some Woodstock-like characteristics but retains its own distinctive character. Like in Woodstock, the uptick from a median sales price of $337,000 in 2019 to $346.250 in 2020 was modest, and again like Woodstock the number of first-half transactions in Marbletown increased (from 27 to 32). The small sample size leaves the trend statistically unreliable.
Finally, there’s the New Paltz-Gardiner sub-market, which follows the same pattern as its brethren upscale communities, Marbletown and Woodstock. Once again, the median sold price bumped upward from $312,599 to $317,500. And once again the first-half 2020 closings exceeded 2019’s, 66 to 59.
Whereas the number of countywide closings dropped markedly in the pandemic climate, they went in the opposite direction in the three upscale sub-markets of Woodstock, Marbletown and New Paltz-Gardiner. But where sales prices increased by double digits in the county as a whole, they went up by only two or three percent in the wealthier communities.
The rumor mill keeps churning
“What’s past is prologue,” says a Shakespearean character in The Tempest. The past sets the scene for the future, but does not determine it. Anecdotal reports suggest a more dynamic future for Hudson Valley residential real estate than the data about the recent past has indicated. The next two months should test that hypothesis. Meanwhile, the rumor mill will rule.
Join the family! 
