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By Joan Taub
What’s going on in real estate? That’s the question everyone asks when they learn I’m a Realtor.
People want to know if it’s a buyer’s market, a seller’s market. They want to know what the interest rates are. Are there any “deals”? How long does it take to close? What’s my house worth?
Because no one has an accurate crystal ball, the answers to those questions can change moment to moment. The information provided is always just a “snapshot in time.”
So, what is happening in real estate and, more specifically, what’s happening with real estate in Saratoga County? If you’re a seller, it’s great. If you’re a buyer, it’s a bit less great.
The basic reason is that there is so little inventory, all the buyers are vying for the same place.
Realtors usually price properties based upon similar properties, similar features, similar schools, the competition and the condition. There is a process to determine a price range where a house may sell and where it should be appraised by a bank. Most houses in today’s market have been priced via a method using historic data.
The caveat to a seller is that, while we try to select an appropriate price range, the buyer ultimately determines the sale price and the house may sell for more, or less, than the list price.
When COVID-19 first came on the scene over a year ago, some sellers decided to remove their house from the market. They did not want potential buyers walking through their homes and they did not want to vacate their home for a showing.
Some buyers purchased homes sight unseen. They needed a house and used online information and photographs. In 2020, Realtors, sellers and buyers were very limited in what they could accomplish. Yet, the need for housing did not diminish. Big wedding receptions were on pause, but marriages were still occurring. Babies were born and people needed either more space or they wanted to downsize.
When restrictions on moving around were somewhat lifted, many first-time homebuyers wanted to purchase a house because the interest rates were so low. Others wanted to purchase a house because after spending a year in their current house, they realized they needed more space.
Saratoga County has always been a wonderful place to live, surrounded by colleges, hospitals, the Capital District, chip factories etc. The commute to jobs is easy in any direction. Taxes are lower in Saratoga County than other counties, plus Saratoga Springs offers so much to so many.
In the first quarter of 2021 in Saratoga Springs, there were 84 new listings versus 110 in the same time last year. That’s 24 percent down from 2020.
When we are down in inventory and we have buyers vying for the same property, many properties have multiple offers. The median sale price has gone from $315,000 in 2020 to $381,000, up 21 percent. In Saratoga County, the median sale price rose to $310,000 from $259,000 a year ago. That is a 19 percent increase.
When I mentioned that buyers ultimately determine the sales price, many of these properties with multiple offers sell for $10,000 to $50,000 more than the list price.
With the frenzy over buyers wanting the same pricing, sometimes it feels like the “wild west.” But, with people paying more today, we are generating the historic data that appraisers will use in the future.
The downside to all this excitement in real estate is that those selling must have a Plan B, meaning they need a place to move into. Buyers can become frustrated with the process. For a buyer, it’s difficult enough to find a house you would like to purchase. When you do, imagine 10 people writing offers on the same property.
When there are 10 offers, nine people are not going to be the ones to move into their house of choice. So, they start again to search for a house and, yet again, they may miss out. That process can be tiring and sometimes it makes people want to excuse themselves from the process for a while.
My theory has been: when one finds a house they like, it’s worth the effort to let it play out and try for it.
In this lively market where transactions can happen quickly, buyers are still looking for properties in “cream puff” condition. “Move-in” ready is important and will make the seller the most amount of money. But pricing also matters. If priced is too high, buyers ignore it and go to another house.
Whichever side you’re on, it’s an interesting time to participate in a real estate transaction. A lot of buyers will pay cash, waive inspections, waive appraisals and accommodate the seller’s closing schedule to get their offer accepted. Still, it’s possible for all to find the right property.
Many sellers withdrew their homes from the market once COVID came along. Some realized they loved their home and decided to stay. In Saratoga County we are looking for people who, during COVID, decided they needed a bigger, smaller or different home. For those people, it’s a great time to sell and we really need the inventory.