Lately, whenever I talk to a prospective buyer from Long Island, they inevitably comment that the real estate market on Long Island is in the pits, that houses aren’t selling and that prices are going down, down, down. And they extrapolate that all real estate markets are the same, and that the same dynamics affecting Long Island are also in play here in the Catskills.
I’d venture, though, that many people there — as well as here, to be honest — base their view on anecdotal reports and glances at sensational news headlines that trumpet the collapse of the real estate world as we know it! Regionally, the data just doesn’t support a real estate collapse. Even in suburban areas around NYC, sale prices have only dropped a few percentage points from their peaks after a few years of double digit annual increases. Everyone has a friend, relative or acquaintance who’s had their house on the market for months without a bite. But the question is "At what asking price?" If your house is priced 20% above what it would have sold for a year ago and it isn’t moving, that isn’t a sign of a real estate market collapse. It just means that seller price expectations have gotten out of line with reality.
In the last few years we all became accustomed to a roaring seller’s market and that became the new reality. But the truth is that in ‘regular’ real estate markets, houses sell in weeks and months, not in days. There aren’t multiple bidders lining up with deposit checks at open houses. Price performance is at or slightly better than inflation, not 30% or more a year.
A return to sanity is not the same thing as a market collapse. The news media, though, don’t sell newspapers or keep viewers tuning in with stories about a return to normalcy. They get viewers and readers with headline stories about "Real estate hits the skids. Prices drop for the 3rd month in a row." Yes, that may be true. But prices slipping in the 2% or 3% range isn’t the same thing as prices dropping 20% or 30%. Now that would be news, but that doesn’t seem to be happening. But if you’re a seller banking on a 25% year over year increase, I suppose the current pullback in appreciation does seem like the sky is falling. And here in Sullivan County, we’re not seeing that modest price slippage at all.