Courtesy Roohan Realty
By Tom Roohan
The year 2022 was clearly a strong year for real estate in Saratoga County and surrounding areas.
We experienced near record average price for homes as well as record turnaround time from day-of-listing to sold. The average sales price was 100.1 percent above asking pricing for 2022.
Headwinds heading to 2023 are primarily driven by the Federal Reserve’s decision to stage interest rate increases to stop inflation. These rates have doubled the cost of borrowing for homeowners in the past four months. The cost of borrowing has had a dramatic impact on real estate sales and additional rate increases are anticipated in early 2023.
Current fixed rates at 6.25 percent has had a more dramatic effect on first-time home buyers and slowed construction from buyers trading up to new construction. This trend is anticipated through the first six month of 2023, which will continue to moderate our industry.
It is my hope that inflation will diminish as we head toward summer and the Federal Reserve will slightly reduce interest rates. This should stimulate the economy and hold off a deep recession as experienced in 2008.
The finance community has combated these rate increases by providing flexible rate loans for 5 to 10 years that are becoming more popular in recent months. For a veteran like myself, I remember selling a home in the fall of 1981 and celebrating after the closing that the buyer had a fixed rate of 17 percent.
How times have changed.
I am confident our Federal Reserve will not conform to this tactic and moderate rates, and flexible terms will remain the norm in 2023.
The real challenge at hand is the shortage of available homes for sale in Saratoga County. We also do not have enough adequate options for our seniors.
Our range of available apartments that are “affordable” is growing, but is still limited. Local government is aware of this issue and I hope makes it a priority to continue to pursue quality, affordable care and housing for our seniors.
Entry-level homes for first-time homeowners is also a driving need. Most recently, an alarming statistic shows these new homes are the target of investors for short- and long-term rental platforms like VRBO and Airbnb. This competition clearly hurts many families and will continue until our local government finds a way to regulate this rental business environment.
These regulations include inspection, licensing, and collection of all appropriate taxes to support our infrastructure. Communities that have successfully dealt with this dilemma include Lake Placid, Stone Harbor, N.J., and Newport, R.I.
The good news is that our local economy stands on many legs.
Skidmore College, Empire State College, and Hudson Valley and Adirondack community colleges make up a solid educational foundation. The New York Racing Association, Saratoga Gaming and Raceway, and Saratoga Performing Arts Center provide diverse entertainment options. The City Center Authority, Saratoga County Chamber of Commerce, and the Saratoga Convention Bureau will continue to drive hospitality and tourism throughout Saratoga County.
Several outstanding community-based companies provide much-needed employment and philanthropy in Saratoga County. Stewarts Shops, Saratoga Eagle, Adirondack Trust Co., The Fort Miller Companies, DA Collins and Saratoga Hospital are among the great corporate partners dedicated to our community and dedicated to giving back to many charitable organizations.
We continue to see local business groups prosper in Saratoga and new commercial expansion is planned as more people understand the value of living and working in Saratoga County.
I, for one, remain optimistic for a healthy and prosperous real estate market in 2023. Location and creative financing will help homeowners find that special place. As the average residence changes ownership every seven to 10 years, it is important to be in the game and know how to take advantage of the current market. You will be glad you did.
Roohan Realty will strive for excellence as it pertains to customer service, finding creative solutions for every homeowner or investor.