The real estate market has been a hot topic of discussion for the past few years, with fluctuations in housing prices and demand making headlines across the globe. However, as the frantic seller’s market of 2021 and 2022 comes to an end, real estate is looking to return to its traditional setting and place it in the hands of buyers once again.
“Mohawk Valley is home to a boisterous ethnic population with over 50 plus languages spoken, a range of school systems, and several businesses and developments, like Griffiss Technology Park and Wolfspeed, drawing young professionals to our area. As a veteran in the business, I’m thrilled to witness the evolution we’re experiencing. But, if you ask any agent, they’ll tell you, despite the rise in interest rates, the Mohawk Valley still holds a steady hand in the growing market. Our only obstacle is the lack of properties to meet our current demands,” said John Brown, Coldwell Banker Faith Properties owner.
While low interest rates, stimulus tax credits, and grants contributed to the real estate boom in 2021 and 2022, the rise of remote work played a significant role as buyers could purchase homes in their desired locations.
“As people began working from home, they realized they did not need to live where they worked. As a result, they looked to relocate to the country where they could enjoy more space and land. Others, however, sought homes with an office or extra bedroom to turn into their workspace,” Ann Rushlo, Executive Officer for Mohawk Valley Association of Realtors, stated.
Due to historically low-interest rates, homeowners were able to purchase properties that were previously out of their reach. At the same time, sellers could capitalize on the market by selling their homes for a higher price and upgrading them.
“The market was like a revolving door throughout 2021 and 2022,” said Paul Sacco, a licensed real estate salesperson for Howard Hanna Real Estate. “I’d list a house and have multiple offers within an hour, sight unseen. Then, the pull from buyers became so intense that sellers offered deals over the asking price, eliminated home inspections, and paid above-market rates. I don’t think I slept or returned home before 6 p.m. in two years. It was an influx of deals, closings, and little negotiation.”
While the frenzy seemed to overwhelm the market, it helped buyers become hyper-aware of their needs, leading them into 2023 with a keen eye and precise details for what they wanted.
“Open houses were off the table for the longest time. So if you had a desirable home in an area with a desirable school district, the house would sell instantly. That forced buyers to become extremely clear on their non-negotiables so they could make quick decisions when a house hit the market. As a result, the buyers of 2023 have extreme clarity, eliminating a lot of nonsense and unnecessary time,” Sacco reiterated.
One of the most significant changes in the real estate market is the changing economic, social, and political landscape.
“We have a new generation that wants to live in downtown spaces where things are happening. In many growing places in America, appraisers will give a home more value if it’s within walking distance of a hip coffee shop. In all my years in real estate, I never thought that would be considered upscale, but we’re seeing a new wave of community that doesn’t crave the suburban lifestyle. Instead, these individuals want convenience and time spent away from everyday tasks, like lawn care, snow removal, and upkeep, so they can enjoy their lives on the weekend without working on their property. It’s a special time, and the people we’re beginning to pull in for Cree and other areas are responding and requesting this change,” Brown said.
According to the National Association of Realtors, the median home price in the United States reached an all-time high of $355,900 in January 2022, up 16.2% from the previous year. In contrast to the 2022 ideal, which allowed buyers to upgrade, the high prices have put a slight damper on first-time buyers. Ironically, the market in the Mohawk Valley has continued to remain strong. However, there is one factor that buyers and agents are concerned about regarding the real estate boom: the inventory shortage.
“The biggest challenge facing realtors in 2022 is the economy and interest rates. Yet, while we may never see interest rates as low as 2% any time soon, the current rate is relative to what people refinanced their homes for in the early 2000s. Although interest rates will always shape the rise and fall of a market, we’re starting to look at other concerns as buyers arrive from the Carolinas and Texas to work at Cree. Unfortunately, the market for a 100-year-old South Utica bungalow only speaks to some people relocating here. These young professionals seek brand-new homes with all the bells and whistles or housing complexes and lofts. Instead of asking what we will do with another loft building or housing complex, we should examine spaces like Air City Lofts in Rome and ask ourselves how we’re responding to the needs of our growing community,” Rushlo highlighted.
Several trends will shape the real estate market in 2023, including rising home prices, the move toward walkable cities, the rise of sustainable housing, the emergence of real estate technology, the increase in rental properties, and changes in commercial real estate.
As a result, the Mohawk Valley will likely see an increase in the number of homebuyers, developers, and agents keen on taking advantage of environmentally friendly homes and staying current with the ongoing trends in real estate.