ALBANY — The New York State Association of Realtors said it continues to see the dearth of available homes on the market as “a concern” amid surging mortgage rates and rising prices on houses presently being sold.
In May, realtors observed an 18.1 percent decline in available homes from the previous year. Last May, 43,458 homes were on the market throughout the state. Last month, the number of units was down to 35,573 units.
“Months’ supply of inventory fell 12.5 percent in year-over-year comparisons from 3.2 months of inventory in May 2021 to just 2.8 months in May 2022,” Realtors shared in a statement released Tuesday, June 21. “A 6-month to 6.5-month supply is considered to be a balanced market.”
Closed sales were up 12.2 percent in May – from 11,095 homes in May 2021 to 12,451 in May 2022. Pending sales fell from 14,793 units in May 2021 to 14,306 homes in May 2022. This represents a decrease of 3.3 percent. New listings were down as well, falling 4.7 percent from 19,839 in May of last year to 18,900 units last month.
Responding to the nation’s worst inflation rate in 40 years, the Federal Reserve raised benchmark interest rates three-quarters of a percent on Wednesday, June 15; its most aggressive rate hike since 1994.
According to Freddie Mac, the monthly average on a 30-year fixed-rate mortgage soared from 4.98 percent in April 2022 to 5.23 percent in May 2022. This is first time the monthly average commitment rate has been over five percent since January 2010, when it stood at 5.03 percent.
Median sales prices continued to climb, escalating from $355,000 in May 2021 to $480,000 just last month. This represents an increase of 35.2 percent and marks 25 consecutive months in year-over-year comparisons that median sales prices have increased.
The residential real estate market throughout the Capital District remains fast-paced and challenging to buyers with the median sold price hitting a new high and time on market at a new low, the Greater Capital Association of Realtors said.
The median sales price reached $279,000 in May, up about 11 percent as compared to last year and nearly 19 percent over May 2020.
The percentage of original list price received at sale rose to 102.4 percent indicating that buyers are still willing to pay top dollar for homes as inventory remains slim. In May there was just a 1.5-month supply of homes for sale. This was a 32 percent decrease from May 2021.
New listings decreased 8.2 percent from May 2021 to 1,641 for the month. However, more new listings entered the market in May than any other month since August of last year. On average, homes spent just 30 days on the market, down by 11 days from the same time last year and down 34 days from May 2020.
The total number of homes for sale was down 42.5 percent percent to 1,655 units from May 2021. However, this has improved from last month’s 51.5 percent decline.
“Any increase in inventory is positive news, especially during the summer months,” said Kendal Baker, Broker-Owner of Markers Octagon Realty. “For a variety of reasons, new construction is still lagging behind on the current demand for homes”.
Pending sales decreased 13 percent from May 2021 to 1,299 for the month. Closed sales were down by 15 percent from May 2021 to 902 for the month. Still, buyers, sellers, and Realtors had a busy May with more than 28,000 showings conducted. New construction’s median sale price rose by 37 percent over May 2021 to $502,806.
“The reduction in some of last month’s numbers is the result more of the continued lack of inventory rather than the increase in the historically low-interest rates,” said Laura Burns, Greater Capital Association of Realtors CEO. “While the Fed’s recent rate increases may edge out some potential first-time home buyers and others on a tight budget, at this time, lack of inventory is still pushing sale prices to exceed list prices.”
There is still some uncertainty about how and when the real estate market will adjust but for the summer months, sellers in the Capital District remain in a good position and rates remain affordable.