The Dutchess County housing market continued to strengthen in the third quarter of 2016, with a moderate increase in sales coupled with an eye‑opening spike in pricing.
Sales. Dutchess single‑family home sales were up again in the third quarter, rising 8% from last year. This marked the eighth quarter in a row with year‑on‑year sales increases, closing a rolling year where sales were up over 17%. With over 2,400 sales over the past 12 months, Dutchess is now closing homes at a rate that rivals what we saw during the last seller’s market.
Prices. This sustained increase in sales activity is finally having its expected impact on pricing. Single‑family home prices spiked in the third quarter, rising an eye‑popping 9% on average. That’s not a sustainable increase, and is likely due to a few outliers in the data, especially when you see that the median and price‑per‑square foot metrics were up a more modest 2%. But even so, the rolling year average sales price increase of 4%, and the median price increase of 3%, are both positive indicators of where this market is likely going.
Negotiability. Dutchess inventory continues to decline, now down over 26% to 14.1 months of active single‑family listings. Although we are nowhere near the six‑month level of inventory that usually signals a “seller’s market,” we are certainly seeing some tightening that could support further price appreciation. The other negotiability indicators – days‑on‑market and listing retention – were mixed.
Condominiums. The condo market was also up, with sales rising almost 18% and prices also spiking. For the year, condo sales are up 21%, and pricing is up across the board, although the 9% increase in the average price is probably not sustainable.
Going forward, we continue to believe that Dutchess is on the precipice of meaningful price appreciation. With a stable economy, low interest rates, and homes still priced at appealing 2004 levels (without even controlling for inflation), we believe that Dutchess will finish the year strong and see even better days in 2017.