Could this be the lull before the storm?
People are still buying lots of homes in Ulster County in 2022, though in smaller numbers than in 2021. And real-estate prices are still rising, though at a slower pace than in the record year of 2021. Despite the considerably smaller number of home sales in 2022 compared to 2021, more houses in the range of $500,000 to a million dollars sold this year through May 15 than in the comparable period last year.
Figures from the Ulster County Multiple Listing Service (UCMLS) show 540 single-family homes sold from January 1 to May 15 of this year at a median sales price of $350,000, as compared to 711 sold in the same period of 2021 at a median price of $326,000. That’s at least keeping up with inflation.
What’s going to happen next?
The rest of 2022 may be a little tougher for the real-estate marketplace. With the national bank, the Federal Reserve, already raising interest rates and beginning to reduce the money supply to fight inflation, home mortgages will cost more. Buyer qualifications are sure to tighten, which will have an outsize impact on disadvantaged people and first-home buyers.
New York loses ground
Take your choice between optimism and pessimism. If the 2022-2023 economy glides to a slowdown without a serious recession, real-estate prices are likely to plateau. With a significant recession, they may well dip into negative territory.
The Federal Reserve Bank of New York has kept track of single-family home sales by county in this country for a couple of decades. Prices have been rising more in the rapidly growing South and West during that period. That differential seems to have accelerated during the pandemic.
The Fed says home prices in the nation went up 20.9 percent in the year ending this March. They went up 16.5 percent in Ulster County, the highest one-year hike since the 17.8 percent recorded on 1992.
There is a growing price gap between home prices in most big American metro areas and prices in metro New York City. The respected Case-Shiller 20-city index showed a 222.9 score in March 2020 and a New York City-only score of 204.5. By February 2022, the 20-city index had reached 300.0, a score increase of 77.1. The New York score had increased by only 53.9 to 258.4. That may not sound like much, but it’s a startling differential considering it’s happened only over the past two years.
More jobs are portable
A lot of people left New York City in those two years of pandemic. The data shows that most of the businesses that deserted the Big Apple moved to Stamford and Westchester or Nassau counties – still within the greater New York metropolitan area.
Many employees of New York businesses, like employees elsewhere, have been working from home at least part of the time. The nine-to-five five-days-a-week pattern is a lifestyle of the past in many occupations and industries. Knowledge jobs are more portable than they used to be.
The balance between work in the workplace and work at home has shifted. With that change, more people have been moving further away from the central city to exurbia – places like Ulster County. Some are destined to return to Gotham, but others will remain steadfast in their determination to build their lives in the new location.
Rings around Gotham
To gauge Ulster County’s changing relevance in the market for housing, let’s look at what’s been happening within New York City’s consolidated metropolitan area, from where most immigrants to Ulster come.
In the early 2000s, New York City home prices grew like gangbusters, with 20 percent annual growth not unheard of. Everybody wanted to live in the big city. By 2010, however, the boom was over. New York City has not seen those kinds of increases since.
Don’t count the United States’ largest city out. It’s the center of the world for too many industries for us to do that. Lately, there’s abundant evidence that New York City, with its four million jobs increasing by almost 300,000 in the past year, is once again on its way back. City rental prices are way up this year – to pre-pandemic levels, many say. It’s one consideration that people who moved to exurbia recently will keep in mind when considering return.
The New York Association of Realtors (NYSAR) keeps close track of recent real-estate prices. Confirming the New York Fed’s findings, the NYSAR data shows virtually no pandemic price growth in New York City until this past year, when prices perked up about five percent. The data shows moderate increases in the suburban inner ring around New York City. And it shows considerable price gains in the exurban outer ring of counties on the periphery of the New York metropolitan area during the pandemic.
Ulster’s definitely one of those counties.