2022 - Tracking the Catskills Real Estate Market
All the experts predicted the precipitous drop in business in 2022. They were right, but not entirely right.
Mortgage rate hikes definitely iced down a hot market, but buyers were still looking and, when they found the right place, buying in 2022. Agents who've been in the business awhile continued to be busy.
It was tougher for the newbies. Quite a few new agents who jumped on board during the 2021 boom, jumped ship. It's really hard to justify the amount of time, effort and expense involved in being a Realtor when you don't see any financial reward.
It was tough on agencies as well, particularly the biggest ones. Many big firms ran into real trouble. The battle for business is fierce when a lot of big agencies are all doing basically the same thing the same way. In addition, there's competition from new real estate tech companies which are trying to either profit off referrals to Realtors, or get buyers and sellers to bypass real estate agents altogether.
But here's where the power of the individual comes in. The predicted threat of those companies putting individual Realtors out of business hasn't happened. Luckily for us, there's a human element to being a Realtor that simply can't be replaced by an algorithm. Experienced Realtors, no matter what company they're with, can survive because their business is based on their reputation and who they know, not the company they work for.
But changing times do demand change.
In lean times, if you're going to survive and even thrive, you have to learn to run lean. A huge corporate conglomerate can only do that in one of two ways - cut pay to its agents or increase the fees it requires them to pay. And that's happening.
But there's another option, and it's the path I took - you can buck the trend toward bigger companies, and go small.
Upstate Country Realty started in May with just me - a one woman band. It was an idea I'd been toying with, but the change in the market made it an easy decision. If I was going to have fewer sales, going independent meant I could take complete control of my business and stop paying some corporation for the work I was doing.
A couple of months later, a dear friend joined me, and now we are a company of two. It is friendly and very, very pleasant. We aren't desperate to expand, though we've had a handful of inquiries from agents interested in joining us. I'm sure we'll grow eventually. But we'll take it slow.
How does an independent company compare to a large corporation? In my experience, if the indy company is doing it well, it's better in every way. We are nimble. We are responsive. You are talking directly to us, with no one else picking up the phone. We can be creative and even more aggressive in our marketing, because we have more income to put toward marketing our listings. We have worked on refining our brand, referring good listings that might not fit our brand to agents outside our company who we know will do a good job.
What is our brand? Upstate Country Realty represents the best character and country properties in the Catskills and beyond. It's simple, and it's focused.
That focus will, in time, draw more of those listings. Right now, bigger, out of town corporations are trying to market properties here, but they don't know the market. They're overpriced, and they're not advertising to the right buyers. Their listings aren't selling.
Ours do.
What have the sales told us about the market here? Village properties are still popular with out of town buyers, but most of our sales in a village also include some business plan - whether it's an Air BnB, or someone hoping to open a retail or food service business.
There is a justifiable concern about too many Air BnB's moving into a small village - it creates challenges for services, for local schools; it simply doesn't contribute to a community the way full time residents do. I encourage buyers to be thoughtful about their plans and understand the impact they can have in such a small place.
More buyers are saying they hope to move here full time, even if they can't do it immediately. The pandemic has made remote work a reality, and more young families are hoping to give their children the experience of life where the sidewalk ends.
The majority of buyers now want something in the country. Not too far in the country, but with some privacy, some views, a sense of space. They want reliable Internet, which isn't a problem in many locations, but that's still a challenge in the more remote areas.
Overpriced properties aren't selling now. Buyers are not going to overpay when they also see mortgage rates going up. And they're well aware of the high cost of materials and the near-impossibility of getting local contractors. It's been a busy time in a rural area that never had a lot of plumbers, electricians and contractors to begin with.
Consequently, buyers are being very particular about inspection results. They want a solid house with no major issues. If they have to take on projects, they want the sale price to be adjusted accordingly.
Sellers are slow to come around to the change in the market. I had a sale fall through because the seller refused to discuss the inspector's discovery of mold in the attic. The seller argued someone had told them in the past that it was "just fine." The buyers, understandably, were not satisfied with that. I had a sale fall through at the very last moment because a seller refused to remove an ancient asbestos-covered derelict furnace from the basement. I think both sellers assumed that if the buyers wanted the house, they'd swallow their objections and buy. They didn't. They simply found other, less problematic houses.
I've previewed a couple of properties that sellers thought could be sold in as-is condition. I've encouraged them to do some repairs and cleanup before trying to sell. Listing them in their current condition would be a disservice to the sellers. With a clean out and a cleaning, the sale price could be thousands more.
If 2022 was the year of the reset, I'm guessing 2023 will be the year we get back to some semblance of normal. Mortgage rates appear to be settling down. The economy is fairly strong, as is the jobs market.
The hyperinflation in the Hudson Valley has changed that area forever, and we will continue to see more buyers looking farther north and west. I predict the people who wanted Kingston but can't afford it are going to discover Oneonta. Its main street is every bit as pretty as uptown Kingston, and that's saying a lot. It's got two colleges. It is handy to a highway and it's on a main bus route. If Oneonta catches on, that's going to be huge.
The marks we all carry from the pandemic will stay with us, and I think that will help fuel a continued demand for a better work/life balance, a better quality of life, and a continued recognition that a slower lifestyle is a less stressful one.
That all spells another good year for the Catskills and beyond.
Want to see what's for sale (or sold) in the area? Check out our website.
