Housing prices on the rise
CAPITAL REGION, N.Y. » The local real estate market remains competitive due to low inventory, an issue that’s becoming a problem nationwide according to the Greater Capital Association of Realtors.
Across the nation, markets report overall that a stronger economy, wage growth and an improving job market are expected to push home sales and prices higher in the second half of 2018 though low supply will continue to hamper the rate of increases, stated the latest report from the regional organization, which was recently represented by local leadership at the National Association of Realtors Legislative meetings in Washington D.C. Here, GCARmet with New York elected officials Congressman Paul Tonko, Congressman John Faso, Senator Kirsten Gillibrand and Senator Chuck Schumer to discuss homeownership issues and concerns relevant to the greater Capital Region.
Locally, the Capital Region’s low inventory continues to create a competitive situation for buyers and pressure on prices, which rose by nine percent to a median sales price of $211,500 in year to year comparisons while the average sale price rose to $238,000.
In Saratoga County, those numbers were higher, rising 13 percent to an average residential sale price of $334,829.
In Rensselaer County the jump was even greater, rising 21 percent from last year, but the average home price came out at $221,363, just below the regional average.
Albany County stayed steady rising only slightly to an average price of $251,461, with a 17 percent increase in residential listings despite low inventory being the topic of discussion market-wide.
Inventory levels marketwide decreased by 21 percent to 4,293 units causing the average number of days spent on the market in April for existing homes to land at 70 and new construction at 79.
“Many sellers and builders are in a good position for financial gains, as the local economy continues to favor putting existing homes on the market and building new homes for sale,” GCAR president Susan Sommers of Better Homes and Gardens Real Estate Tech Valley said in the report.
Pending sales increased 9 percent from April 2017 to 1,275 for the month, while closed sales decreased by three percent from April 2017 to 813 for the month. Months’ supply
of inventory was down 24 percent to 4.2 months.
As expected due to the inventory shortage, the percentage of original list price received at sale rose to 96 percent since 2017.
Lawrence Yun, chief economist of the National Association of Realtors, presented his 2018 midyear forecast in Washington D.C., stating that despite headwinds, a moderate and multiyear increase in home sales is likely ahead. “Challenging affordability conditions have prevented a meaningful rise in the homeownership rate
after having fallen to a 50year low a few years ago,” he said. “To increase homeownership, more home construction is needed, which could be boosted by delivering regulatory relief to community banks, removing the lumber tariff, reexamining stringent zoning laws and training more workers for the construction industry.”
Yun said affordability conditions would improve measurably if homebuilders increased their production of homes, especially in the affordable price ranges. He forecasts starts to come in around 1.3 million in 2018 and reach 1.4 million in 2019, but that is barely above year-ago levels and well below demand.
According to realtor. com data there are 250,000 fewer starter homes, those priced under $200,000, now than in May 2015.
Millennials, boomers and investors may all be going after the same affordable inventory of homes, so competition is great, said Danielle Hale, chief economist at
Realtor.com, in the report.
Laura Burns, GCAR CEO agreed, adding that increased new construction in the Capital Region will provide some inventory relief, “but with a median sale price of $388,955, these homes are too often out of reach for first-time home buyers. Even those seeking a ‘move up’ home lack the inventory to do so.”