The ages-old saying, “that if it doesn’t kill, it can only make you stronger,” can be used to explain the housing market in Orange County, NY. Despite the Pandemic creating added challenges and an unpredictable future, the market is still seeing a boom in sales. Even with the strength of the market in Orange County has also seen its fair share of challenges in the last year or so.
The boom in Orange County can be credited to the strong national and local economies and low-interest rates. According to Business Insider, the average interest rate for a 30 year fixed mortgage is 3.21%.
Orange County’s sales increased by 63.7% compared to previous years. The 2008 recession hit Orange County hard but like the Little Engine that it could, the market is taking its slow sweet time bouncing back. Despite the 2020 recession that has come about thanks to the unprecedented COVID-19 Pandemic, the market is holding steady for now. It may take two-three years for the market to bounce back to identical numbers that we saw prior to 2008.
Orange County’s median price for single-family homes, meanwhile, continued its steady rise; in 2020, the median sale price was 320,000. In the previous year, the average price of a home for sale was $277,000 which was a slight jump from the average of $271,000 in the previous year.
The median number of days on the market for Orange County, NY last year was 41 days. This number looks appealing in this Seller’s market trend we have going on at the moment.
The local market for multi-family homes also gained strength, as investors looked for larger returns than low-interest certificates of deposit, Garafalo said. Two-hundred-forty-seven sold in Orange County in 2019, a 2.6 percent% increase from 2018, as their median price skyrocketed 26.7 percent to $209,000 from $165,000.
Orange County’s condo market stayed hot in 2019, with the median price climbing 16.7 percent to $185,500, an increase from $174,600 in 2018, $164,200 in 2017, and $146,600 just a few years ago in 2016.
One reason for the condo market’s strength: Condos are a more affordable option for those who’ve been priced out of the single-family home market, especially first-time and younger buyers, local realtors, and other experts said.
Although Condos can be appealing to buyers, they do most often come with additional fees. If you are looking for a condo or townhome that does not require you to maintain it then this is the perfect setting for you. Although buyers beware, there can be drawbacks to owning a condo. The drawbacks can range from not owning your own property and just the house itself to the sometimes unpredictable Homeowners Association Fee. In the United State, the average Homeowner’s fee is between $200 – $300 but from time to time, a homeowner can see a much higher increase for added maintenance to the home or community.
America’s median age of first-time homebuyers is now 33, the oldest since recordkeeping dating to 1981, according to a recent National Association of Realtors report. And the median age of all home buyers hit a new record of age 47 in 2019, following a third straight year of increases. That overall median age was just 31 in 1981.
Rising home prices and a shortage of local affordable housing are compounding difficulties young people already faced buying a home because they’re over-leveraged from student loans and other debts. The average amount of student loan debt sits around $30,000 and the typical average student loan interest rate sits around 5.8%.
And those challenges say nothing of the tighter lending standards banks have instituted since the last housing bubble burst. One can say that the restrictions that the banks have placed on loans going out to buyers can almost certainly be an ever lingering fear of the 2008 recession. The one thing to remember about the current recession that we have fallen into is a direct result of state shutdowns due to the Pandemic and not the banks failing as we saw in 2008.
Allowing younger generations to become homeowners means local municipal leaders will have to allow for smaller subdivisions, lots, and homes, and builders will have to accommodate young people’s differing tastes, too. The new up and coming trend that has been on the rise over the last few years is the concept of “turnkey” ready homes.
The current generation of home buyers is looking for homes that are not in need of updating or have several issues. With a market that is already very limited the “turnkey” home can be hard to come by. The current makeup of homeowners has been those who were born during the baby boomers era (born circa 1946-1964). The older homes that need more TLC may cost less but in the long run, the additional construction costs and addressing hidden dilemmas that were not picked up in a home inspection can make finding an affordable loan much more difficult.
The current market of homes in Orange County at the moment are priced out of reach for the typical homebuyer that works an average paying job and also have student loan debt.
Homebuyers are also being forced to look outside their desired area of buying due to several different reasons. The age of the home as stated before has been proven to be a problem. The other major issue is the cost of City taxes in the desired area. The cost of the homes and the taxes may not always equal out in value and that can make things much more difficult in reselling the home later down the road.
In Orange County, the number of single-family homes sold fell 2.4 percent to 978 at the end of 2019 from 1,002 in 2018. A total of 954 sold in 2017 versus 924 in 2016.
Orange County’s economy, like that of the state and neighboring Sullivan and Ulster counties, just keeps buzzing, and maybe in the next year or two the market will open up with more inventory and more appealing homes to the average homebuyer.
Several new companies popped up in and around Orange County, like the Center for Discovery, to the addition of big employers such as the Resorts World Catskills casino and the Kartrite Resort & Indoor Waterpark, which led to an influx of buyers looking to start life not only with a new company but in a new town.
Over in Ulster County, single-family home sales stayed nearly flat at 1,522 in 2019, versus 1,500 in 2018, according to the Ulster County Board of Realtors. But inventory fell precipitously (37 percent) to 357 unsold homes from 566 at year’s end in 2018, 596 in 2017, and 708 in 2016, indicating that the market remains robust.
A typical Ulster County single-family home spent 101 days on the market in 2019, down from 108 in 2018, 115 in 2017, and 134 in 2016.
In Ulster and Sullivan counties, respectively, sales of multi-family homes and condos are low, with single-family home sales making up the bulk of each county’s residential real estate market.
Homebuyers priced out of New York City and the Lower Hudson Valley are increasingly discovering Orange County’s high quality of life, relatively short commute, and bucolic natural settings, said Harris Safier, an associate broker with Berkshire Hathaway HomeServices Hudson Valley Properties.
Among the most in-demand markets in the county, particularly for younger homebuyers, is Cornwall on Hudson, Woodbury, Fort Montgomery, Washingtonville, Orange Lake, and the Town of Beaver Dam Lake.
“We’re still in a situation where the inventory for most price points is too low (in Ulster County), the demand is strong, and the interest rates are very appealing,” said Safier.
He added that Ulster County’s home prices, and the number of single-family homes sold, are likely at their highest levels since just before the housing market went bust about 13 years ago.
The issue faced now by many is the job loss due to shutdowns from the Pandemic. The shutdown has affected the economy and the housing market. The recovery is dependent on when the businesses will return to normal day to day operations and restrictions are lifted. Unfortunately, there is no definite answer as to when that may be.
Unlike in the years prior to March of 2020, the home buyers had a better chance of buying homes within these booming cities due to the nature of opportunities offered and the costs of homes.
The year 2021 has only just begun and it will take time to see what the housing market will do and if the opportunity for homebuyers will change. The hope for a better year than 2020 is strong but only time will tell.