Today’s Times Herald Record, the local daily based in Orange County, featured a startling headline, "Local Housing Prices Fall 5%". The Orange County Association of Realtors reported that the median single family home sales price was $323,000 in August, down 5% from August, 2005 and down 2% from the previous month. Price pullbacks in that range are being reported in a number of markets nationwide.
But not here in Sullivan County. While I’m always hesitant to look at single month data for this county due to the small sample size (my monthly Market Trends Report is based on 3 month trend data), I couldn’t resist looking at how our August compared to Orange County, the rapidly suburbanizing Gioliath to our south. In August of this year, the average median sales price in Sullivan was $195,000, up 2.6% from the previous month and 11.4% from August, 2005. While the August data may be somewhat skewed by sample size, overall the trend here, much to my surprise, has been generally positive.
Do I have a thought on the reason "Why?" Of course. Does a zebra have stripes?
Orange County is a primary home market, and generally a value-focused one. The comuting circle from NYC has been pushing well into Orange because cost-conscious buyers looking for some elbow room could get a lot more for their money than in Westchester, Dutchess or the close-in Jersey suburbs. Affordability is a prime factor in the price conscious segments of any real estate market. With rising interest rates, a buyer who could have afforded a $400,000 2 story colonial may now only be able to afford a $350,000 house.
The strength in the Sullivan County market, in contrast, seems to be heavily in the second home segment. While traffic is certainly down from last year, there is a steady stream of second home buyers here, which may be a function of the almost nonstop positive coverage of Sullivan County this summer in the NY media. The relatively strong performance of the second home market here may seem counter-intuitive, given that a vacation home is a ‘luxury’ purchase — and if there’s concern about the economy, luxury purchases tend to be the first to go. We’re definitely seeing that softness in the upper end of the second home market, but the modest range is relatively robust. Buyers are certainly more conscious of value, and there’s been a noiticeable shift from the upper to the mid market, but that’s more an issue of caution than affordablity, per se.