The Dutchess County housing market started the year with a massive spike in sales activity, which had only a modest impact on pricing.
Sales. Dutchess County single.family home sales surged again in the first quarter, with transactions up a whopping 43% from last year. This marked the sixth quarter in a row with year on year sales increases, leading to a rolling year where sales were up almost 30%. With 2,300 sales over the rolling year, Dutchess is now closing homes at a rate that rivals what we saw during the last seller’s market.
Prices. In our last Report, we noted that we were starting to see the first “green shoots” of price appreciation in Dutchess. That continued in the first quarter, with the average and median price both up a tick. The rolling year numbers are still not positive, but we think it’s only a matter of time. With these types of sustained increases in sales activity, we are bound to see an impact on pricing this year.
Inventory. We measure inventory by looking at the “months of inventory” that are available, given the current absorption rate of properties on the market. Generally, the industry regards six months of inventory as a demarcation for a seller’s market. In Dutchess, we are nowhere near that, with inventory still above 14 months. But the market is definitely tightening, with the months of inventory falling over 25% in the past year. As inventory tightens, we would expect prices to start going up.
Negotiability. The negotiability indicators show that Dutchess sellers might be starting to get some leverage. Homes were selling for a little closer to the asking price, with the listing retention rate up above 95% for the first time since the last seller’s market. And the days on market fell again, now down below six months, indicating that homes are selling a little more quickly. If homes are selling more quickly, and for closer to the asking price, that means sellers are gaining a bargaining position with buyers.
Condominiums. The condo market was also robust, with sales up over 28% compared to the fourth quarter of last year, and up over 22% for the year. Pricing was disappointing, though, with the average and median down for both the quarter and the year. Inventory continues to tighten, though, which could stabilize pricing in 2016.
Going forward, we believe that if Dutchess continues to see sustained increases in sale activity, we are bound to see meaningful price appreciation by the end of the year. With a stable economy, low-interest rates, and homes still priced at appealing 2004 levels (without even controlling for inflation), we believe that Dutchess is poised for a strong 2016.