Residential real estate in Mid Hudson Valley is finally showing signs of cooling. The region remained one of the hottest markets in New York State despite a series of rate hikes, but the growth has since slowed. This report examines how the Mid-Hudson Valley real estate market has responded to the interest rate changes and what homebuyers, sellers, and real estate brokers can expect in the coming months.
Key Findings:
- 24% fewer homes were sold in September compared to a year ago. The volume is now below the pre-pandemic levels. The number of closed listings has consistently been dropping in the region since the rates started rising (see Chart 1).
- Ulster County, however, remained one of the stronger markets, as the number of homes sold decreased by only 1.59% annually.
- The high interest rate environment has put downward pressure on inventory available to homebuyers. The number of new listings hitting the market per month peaked in June 2022 and has since been declining when adjusted for seasonality. The volume of new inventory for sale in September was 22.23% lower than in September 2022.
- In the Mid-Hudson Valley region, days between pending to close are shrinking (see Chart 5) as people try to avoid financing.
Fewer Homes Entered the Market in September
Residential inventory peaked in the Mid-Hudson Valley region in the Spring of 2021 as housing prices and demand shot up due to people from the city looking for larger homes and vacation rental properties. While the market remained strong throughout 2022, fewer homes were listed for sale this past summer. Because of an abnormally warmer winter, the sales season kicked off earlier this year. Buyers started showing up to view homes in February in hopes of securing property before rates went up further. By June, most of the inventory had been taken up. In Q3 2023 alone, new inventory dropped over 20% in the Mid-Hudson Valley region. In September alone, the market experienced a 22.27% decrease year-over-year in new inventory.
Orange County, the largest of all five counties, experienced a 25.25% decrease in inventory. Similarly, the number of new listings in Dutchess County in September dropped 25.68%. Housing inventory in Ulster County has also become tighter, with a 33.33% difference from a year ago, as the market readjusts to the high interest rate environment.
Fewer Homes Are Sold in September
Ulster County, however, remained one of the stronger markets, as sales closed stayed relatively consistent compared to the rest of the region. While the number of homes sold declined 25.15% year-over-year across Mid-Hudson Valley, Ulster County experienced a minimal change of -1.59%. Meanwhile, sold listings dropped 35.29% in September alone in Orange County and fell below the 2019 levels. Sullivan County is also seeing a slowdown, with sales volume subsiding by 29.25%.
Faster Closings in the High Interest Rate Environment
As the Fed raised the Fed Funds Rate to its 22-year high, real estate is finally feeling the pressure. Chart 5 below shows the relationship between the median number of days from pending to closing and the 30-year fixed mortgage rate since September 2019. In Mid-Hudson Valley, days between pending to close are shrinking as buyers try to avoid financing their purchase. Grappling with market uncertainty, sellers, likewise, are looking for cash buyers to accelerate closing.
Median Home Price Soared 11.46% Year-Over-Year in Putnam County
Since COVID, property values across the region have reached historic highs. The median home value in Ulster County has gone up 89.20% compared to where it was in March 2020. While the market remains strong, the interest rate hikes have contributed to slower growth across all counties.
The chart above illustrates the seasonally adjusted median home prices between September 2019 and September 2023. Before March 2022, when the Fed started raising rates, the growth was significant across all five counties. The upward trend has since slowed down. Putnam experienced the most year-over-year increase in the past 12 months. The median close price of homes sold in September was $525,000, 11.46% higher than a year ago. Meanwhile, the median close price jumped 9.09% in Orange County, followed by 8.97% in Dutchess County. Home values remained relatively stable in Sullivan and Ulster Counties, which experienced 2.85% and 1.27%, respectively.
What to Expect
Hoping to reach an economic soft landing, the Fed has signaled that the benchmark rate will likely remain at its 22-year high for the rest of the year with fewer rate cuts in 2024. Such a move indicates that mortgage rates will likely stay in the 6-7% range for a 30-year fixed mortgage. Home prices in the Mid-Hudson Valley region A difference between a 5% and a 7% interest rate for an average homebuyer could mean thousands of dollars of extra spending toward homeownership per year. Those sensitive to mortgage rates should remain cautious in the next 18 to 24 months. Meanwhile, sellers need to keep in mind that as the sales market slows down, it may make more financial sense to rent out the property until rates fall below 5%.
Sales Highlights
Most Expensive Home Sold by County
Dutchess County
46 Livingston Street, Rhinebeck, NY 12572
- Beds: 5
- Baths: 5.5
- Land Size: 0.53 acres
- Original List Price: $1,995,000 on May 10, 2023
- Final Sales Price: $1,773,500 on Sep 20, 2023 (-11.13%)
- Days on Market: 133 days
- Pending to Close: 33 days
Orange County
15 Silvertail Road, Chester, NY 10918
- Beds: 5
- Baths: 5.5
- Land Size: 0.53 acres
- Original List Price: $1,950,000 on Apr 11, 2023
- Final Sales Price: $1,800,000 on Sep 1, 2023 (-7.69%)
- Days on Market: 133 days
- Pending to Close: 33 days
Putnam County
107 South Highland Road, Garrison, NY 10524
- Beds: 6
- Baths: 6.5
- Land Size: 12.22 acres
- Original List Price: $5,400,000 on May 11, 2022
- Final Sales Price: $4,287,500 on Sep 28, 2023 (-14.43%)
- Days on Market: 505 days
- Pending to Close: 38 days
Sullivan County
1 Marcel 4th Road, Eldred, NY 12732
- Beds: 5
- Baths: 2.5+
- Land Size: 8.69 acres
- Original List Price: $2,350,000 on May 31, 2022
- Final Sales Price: $2,350,000 on Sep 19, 2023 (+0%)
- Days on Market: 111 days
- Pending to Close: 39 days
Ulster County
25 Rock Ridge Road, New Paltz, NY 12561
- Beds: 4
- Baths: 4
- Land Size: 7 acres
- Original List Price: $1,495,000 on Jun 22, 2022
- Final Sales Price: $1,495,000 on Sep 26, 2023 (+0%)
- Days on Market: 96 days
- Pending to Close: 49 days
Methodology
This report examines MLS data covering the Mid-Hudson Valley real estate market. For the purpose of this report, Mid-Hudson Valley includes the following counties: Dutchess, Orange, Putnam, Sullivan, and Ulster. The analysis includes only residential properties – single-family homes, condos, and townhouses.
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