10 Sep Jon Cartu Stated What’s behind the summer surge in real estate in the North…
Sep 10, 2020 — Like almost everything else, real estate was largely paused this spring. When things started to re-open, there was a real surge in activity, which was expected. There was a backlog of two months to make up.
But that activity has continued here in the North Country. Sales are up and realtors are busy, even with all the restrictions on showing properties.
An active market in the North Country and New York
This summer Jennifer Stevenson, who owns Blue Heron Realty in Ogdensburg, had buyers from outside the area looking for a home on the St. Lawrence River. A week before they were slated to come up and start looking, Stevenson had eleven properties selected for the buyers to view.
“And the the day before they came, I said [to the buyers] that we were down to three.”
Stevenson works in St. Lawrence, Franklin, Lewis, and Jefferson counties. She’s also the 2020 President of the New York State Association of Realtors, the largest state organization for real estate professionals.
Stevenson says that across the state, multiple offers, often at higher than asking price, have become the norm this summer everywhere except Manhattan.
“The market is really on fire. There’s a really low inventory, a high demand, and very, very busy. I jokingly but very seriously say ‘if you sleep on it, you may not sleep in it’.
North Country Real Estate
Before the pandemic, North Country real estate was doing pretty well this year. The first quarter of 2020 was active and even up from last year.
In general, real estate here is a safe bet, says PJ Whitbeck, the broker and president of real estate firm Coldwell Banker Whitbeck Associates, which has offices in Plattsburgh, Malone, and Lake Placid.
North Country real estate is stable and slowly but steadily appreciates. He says rural areas like the North Country don’t go through the same dramatic peaks and valleys as urban areas. This means owners don’t reap the benefits of big market upticks, but also don’t have to weather the valleys of market downturns.
“Generally when we go through a market shift, even nationally, when you may have significant impact on a lot of the urban areas, our pricing stays much more steady.”
Another characteristic of North Country real estate is that inventory (that means how many houses are on the market, for sale) is a little low, especially in the last few years. Whitbeck says this is because homeowners are more willing to renovate their current houses, verus moving to a new one, and because there are no major builders in the area.
The summer surge
Right now, Whitbeck says inventory is down about 40% from last year in his areas, and interest is very high.
“Our pending sales are up, our average median prices are up, and our closed sales are up. We have so much interest we have multiple offers going in on multiple houses, and people are losing out.”
At his office, for the month of July, they’re up 136% on closed sales from last year. It’s a pretty dramatic jump, which Whitbeck attributes to a few things, including pent-up demand from the spring. Like, every year, people had reasons and needs to move.
“People do have to move. There’s still birth, death, divorce, job changes.”
But real estate was largely shut down this spring, which is usually when’s its coming back to life. That meant that when things started to reopen, people were ready to buy, says Cheryl Young, a senior economist at Zillow, the online real estate marketplace. She describes the regular home buying season as
“a pressure valve that gets released [each spring], but it wasn’t.”
Instead, it froze. When it thawed, everyone interested in buying was putting in offers at once, but into a market with less available inventory. That’s because
“…sellers actually kind of pressed pause.”
And that’s for a myriad of reasons, that Young and other North Country real estate agents are speculating about.
It could be that people are wary of moving during a pandemic. For example, a portion of open inventory each year are retireees looking to move or downsize. Now those retirees might be reevaluating their plans, or uneasy about showing their homes.
For families looking to move into a larger space, selling would be easy, but buying would be hard. It’s also harder to obtain child care.
Young says she thinks a lot of people are just sitting still, to “wait and see”.
Low inventory + motivated buyers = ?
So there’s lower inventory across the nation and the North Country. Buyers were delayed this spring, and began putting in offers all at once in early June. And there does seem to be more interest in movement overall, says Young.
“Newly pending sales are up across the country considerably, up about 17%.”
However, Young wanted to dispel the notion that city-dwellers are fleeing urban areas en masse across the nation. When Zillow crunched the numbers, they only saw evidence in two places: San Francisco and Manhattan.
“Those are really the two most expensive markets, where we started to see a lot more inventory on the market, and there was the sense that people were leaving there.”
Reasons to buy: the changing role of the home, and low mortgages
So the North Country’s proximity to New York City may be a small piece of the puzzle. But Young says another trend is that the idea of home has changed because of COVID-19. It is no longer just a place to sleep. It’s your office, and school for the kids, and going to a restaurant, and the movie theatre, and recreational space….
“Needing the home to be more than the home, right? To be the office, and the schoolroom, and all this stuff.”
And for those with those steady incomes, there’s a huge financial incentive to buy right now – 30 year interest rates on mortgages are at historic lows – down to between 2.5 and 3 percent. Lance Evans is the executive officer for the Jefferson-Lewis and St. Lawrence County Board of Realtors, and explained it this way:
“If you were trying to buy a 200,000 house last year, this year you would pay 200 dollars less a month.”
And for those who are now doing most or all of their work remotely, they have flexibility on where they live. Every real estate agent I spoke with for this story had buyers looking in the North Country because their work was now online.
The way reporting works in real estate, solid numbers for this summer’s activity won’t really show up until the fall. What we do have to go on are pending sales, which are up, and what realtors and sellers are experiencing day to day. And that’s pretty simple: a lot of interest, a lot of activity, homes spending just days or even hours on the market.
‘The market is hot’
Realtor Patti Gray Whann works in the Glens Falls area. She says the last few months have reminded her a bit of the post 9/11 rush, going back to the start of early April.
“The phone started ringing, people were looking at the videos, they were putting in offers on houses that they had not seen.”
She’s noted that what constitutes a ‘hot-ticket’ home has changed. She says that normally, it’s one story ranches going to retired couples from New Jersey and Long Island. Now it’s the four bedroom, 2 and ½ bath Colonials flying, and that
“The good news is that these new buyers are…they’re families.”
A tale of one house: ‘We knew there would be interest, but we didn’t realize how fast it would sell.’
Kathy Pellatt and her husband put their remodeled, two-story home in Glens Falls on the market June 1. Pellatt’s sister was their real estate agent, and she called with news within the first hour.
“You’re not going to believe this, she said, but we have a showing already! Somebody called and they said they have to see it today. That was about eight, eight-thirty in the morning, and by four we had a contract.”
It was a young couple from New York City with relatives in the North Country. They drove up that day and made an offer 6,000 above asking price, with the stipulation that the Pellatts wouldn’t show the house to anyone else.
“So we said, okay, we’ll go for it, and that was it!”