If 2015 came in like a lamb, it went out like a lion. Sales of single family homes in Sullivan County for the 4th quarter (the three month period ending Dec. 31st) were up 27.7% from the same period a year earlier. Sales prices didn’t fare as well (at least from the seller perspective), with the average sales price of $150,371 down 14%, and the median sales price ($120,000) off 7.7%. Prices, though, are up sharply from their second quarter low, with the median up 50% from the price bottom of $80,000 in the second quarter, and have been stable since September.
| 10/1/2014 – 12/31/2014
| 10/1/2015 – 12/31/2015
| 9/1/2015 – 11/30/2015
|2010 – Full Year||485||$160,589||$139,900|
|2011 – Full Year||472||$164,345||$138,000|
|2012 – Full Year||476||$150,939||$134,000|
|2013 – Full Year||569||$155,589||$124,000|
|2014 – Full Year||580||$165,298||$125,000|
|2015 – Full Year||699||$143,874||$117,500|
Buyer interest during the fourth quarter was off the charts, with activity at levels more akin to the summer. A barometer of activity is the number of listings “in contract” in the Sullivan MLS, which typically peaks in October or November, and then drops in December and January as sales close and new buyer activity slows. That hasn’t happened this year. The “in contract” number has stayed in the 150’s since Thanksgiving. Looking at the single family homes in contract, we may not see the typical winter price dip in the next couple of months as sales close. The 88 single family homes in contract have an average asking price of $201,496 and a median ask of $139,000. If the typical 90% bid/ask average here holds, the average price of the sales teed up to close could top $180,000. Because I report three month samples (rather than single month sales), we could see the three month average for January and February edging into the $170’s, a level we haven’t seen since August 2014.
For the fourth quarter, the bid/ask ratio was 90.8%, down slightly from the November mark.
For the full year of 2015, there were 699 single family sales in the county reported in the Sullivan and Hudson gateway MLSs, a 20.5% increase over 2014. The full year average sales price $143,874) was down 13%, while the median ($117,500) fell 6%.
2015 started out a little scary. While volume was up somewhat during the first half of the year over 2014, prices fell dramatically, with the median below $100,000 for the second quarter, a level we hadn’t seen since 2003. There were reasons for the price drop. There was a surge in investor buys of lower end properties, possibly the result of the casino announcement. At the same time, the bitter winter weather dampened the post-New Year second home buying season. While the price could be explained, it was none the less concerning.
Fast forward to the summer, and everything changed. The second home market took off, contributing to a year over year volume increase that reached 27.7% in the 4th quarter. Prices, while below their 2014 levels, also improved, with the average sales price topping $150,000 for the first time since February. The very upper end of the market was particularly sluggish, with one sale closing in 2015 above $1 million (compared with 4 in 2014. The mid market showed increasing strength in the second half, with some bidding wars reported in the $400K range (something largely confined earlier in the year to $200 range budget charmers.) But it wasn’t enough to offset the poor price performance for the first half, and push prices into positive territory for the year.
December is usually the quietest month here for real estate, but not this year. I had at least one or two appointments every weekend, and put together two deals. I’ve talked with a number of other colleagues in the business here who’ve also reported that they’ve had steady interest through the holidays and into January. One factor was certainly the mild weather, but even discounting that, buyer interest seems to be strong.
One thing I’m noticing is that a lot of the buyers who are getting in touch aren’t budget shoppers. Recently, most of my showings have been properties in the $300,000 to $500,000 range, and both bidding wars I’ve been involved in since November have been on properties with asks around $400,000. A year ago I was showing mostly in the $250,000 and under range. I’m sensing that second home buyers inventory of “quality value” properties in the moderate range is very tight.
Interest also remains strong in the more affordable second home range under $200,000, but good properties in that range with features that buyers want have been tough to find recently.
Sullivan & HGMLS
|All single family homes||$244,169||$160,000||$150,371||$120,000|
|Non-lakefront, 10+ acres||$469,005||$325,000||$264,666||$231,250|
Sellers and inventory
Limited inventory continues to be an issue. I know, I sound like a broken record, saying this same thing month after month. But we just don’t have enough good houses to sell in popular categories. The shortage of lakefront inventory is particularly acute. We’re heading into the winter selling season with nothing direct lakefront available on Wolf, Wanaksink, Yankee, Timber or York lakes — a situation I can’t ever recall. The inventory on other lakes is very limited. Likewise, farmhouses, another very popular category, are in short supply, even if you push into the $500’s for farmhouses with more acreage. The $200,000 range charmer, the hot product last summer, is pretty much sold out.
The first quarter of the year is always the low point in the annual inventory cycle, with most of the houses on market “leftovers” from the fall that didn’t sell. The winter is a very low period for new listings. However, there’s usually a decent selection of carryover properties. But this year the surge in late fall sales wiped a lot of that out.
The big question as we move into spring is how much new inventory will come to market and at what prices. For owners who are looking to sell but are waiting until spring to list, my suggestion would be to list now. If the winter continues to be relatively mild, buyers will be out shopping and with limited inventory you’ll have less competition than you will in the spring and summer.
Forecast for 2016
I’m very optimistic for this year. Second home buyer interest has been strong going into the New Year and the price sweet spot for buyers has steadily been pushing up into the mid range. Sullivan will continue, though, to be a top choice for affordable range buyers, as it’s one of the only areas within two hours of NYC where you can find modest “starter” getaways under $150,000. I also expect the lower end investor market to remain strong in anticipation of the casino build out. The upper end of the market is more of a wild card. While demand is outstripping supply in the moderate range (under $300,000 non-lakefront, $400,000 lakefront), that reverses at higher price points.
On the price front, I expect we’ll see modest increases of 5-10% in the most popular categories with limited inventory. But I don’t anticipate any huge leaps, even with segments with very tight inventory, because of the very conservative mortgage lending environment. Likewise, investors may bid up low end fixers. But across the board I don’t foresee much price appreciation in lower demand/higher inventory segments. While some owners of primary homes within a short commuting distance of the new casino may be hoping for a surge of workforce buyers (particularly management level), if that does happen, it likely won’t be a factor until late 2017.
There are also macro factors that could impact the market. If the economy remains stable and the equity markets don’t fall, consumer confidence will remain high — and that’s good for real estate. But if consumer confidence drops, that could be bad. Likewise, presidential election years seem to breed nervousness and uncertainty, and I’ve noticed in the past few election cycles that buyer activity slows as the election nears.
The other big question mark is whether we’ll have enough inventory in popular categories this year to meet demand. In 2015, for example, we probably could have sold twice as many lakefront houses if we’d had them to sell.