It’s been really hard to get a good grip on prices this year from the ‘meta data’ — the rolling market basket of average and median sales prices I track monthly.
Both metrics have been down year-over-year every month since March. The question that’s been hard to answer is whether prices across the board are down, or whether the price slide can be attributed to changes in what’s selling. Earlier in the year, in looking at what was selling (and who was buying), I attributed the price drop to a change in the sales makeup. During the late spring, there was a surge in sales of cheap handyman and fixer houses, often investor buys. I figured that was related to the casino announcement last December, with investors picking up houses that they could turn into workforce rentals. That buying frenzy (with volume up 27% year over year) gutted the sales price median and average for a few months.
While the sales price ‘market basket’ has been recovering since June, the median sales price is still down about 9% from a year ago. Sales seem to have settled into a more ‘typical’ mix of second homes, primary homes and investor buys. I’ve been looking at individual sales, and what I’m seeing is that quite a few houses sold for less than where I would have pegged them a year ago. There was a recent sale on a lakefront house on 5 acres at Timber Lake for $440,000. That made me sit up and take notice, because it was quite a bit below where I thought it would trade. A farmhouse on 53 acres near Callicoon Center went for $250,000, as did a renovated barn near Hankins on 15 acres A 3600 sq. ft. lake view (not lakefront) house at Chapin sold for $530,000. All were somewhat below where I expected them to come in.
A common element among most of the sales that are lower than I expect is that most had some drawback that kept them from being ‘perfect’ — not updated, with paneling, or a quirky layout or fit and finish that didn’t quite fit. Most of the price surprises have also been on the market for quite a while, so owners were probably primed to just move the house.
“Lower than last year” prices aren’t across the board. In the hot “$200,000 charmer” range, quite a few houses have sold at, or even above, their asking price and not been on the market very long. A number of stylish or updated houses, or houses with particularly nice settings, are also fetching good prices. But my gut feeling is that when you look at the broader market, prices are down somewhat from a year ago.
There is good news in all of this. Volume is way up — somewhere between 25-30% year over year, so there are quite a few ‘comps’ (comparable sales) in many market segments. Prices in many market segments also seem to be stabilizing, which makes zeroing in on a supportable value range for negotiations much easier. A year ago, with thinner sales and widely varying prices in some categories, it was much more difficult to come to a number.
A lot of sellers may have set their price expectations earlier in the year, based on 2014 pricing. Some sellers may have even gotten appraisals, but if those appraisals were done earlier in the year, they may be out of date. Sellers should sit down with their agent and look at their price expectations.
Some market watchers may think that the sky is falling, because prices are lower. Far from it. The median sales price is down 9% from a year ago, not 39% (the kind of Armageddon top-to-trough drop we saw during the recession). Volume is surging, up 25-30% from a year ago. So it seems to me like we may have hit a pricing sweet spot that is getting buyers to buy, compared to a year ago when a lot shopped but didn’t buy.
Yes, prices may be down. But it looks like Sullivan is getting its value mojo back.