SULLIVAN COUNTY – It has become a resounding theme throughout much of 2022 and 2023 — decreasing inventory and increasing interest rates have combined to take their collective toll on the real estate market, according to the Hudson Gateway Association of Realtors (HGAR).

HGAR monitors home sales, sale prices and inventory in a six-county region, which includes the Hudson Valley and the Bronx.

The Federal Reserve Board appears to have paused, if not ended, its campaign of raising interest rates to curb inflation. Early forecasts have the Fed reducing interest rates three times in 2024 while some analysts predict the Central Bank could reduce rates up to four times this year. 

According to HGAR, home sales were down by double digits in all six counties, including Sullivan, which had 1,189 home sales in 2022 compared to  882 home sales last year, a 25.8 percent decrease.

Prices remain strong

However, sale prices – both median and mean – have continued to increase as demand stays strong for houses coming on the market, despite the economic headwinds.

In the fourth quarter of 2023, 219 singe-family homes were sold at a median sales price of $295,000, up 13.5 percent from the year before.

The median sales price is the price where half of the listed prices are higher and the other half are lower than it.

The mean sales price – which is the average price of all homes sold – also increased in the fourth quarter by 18.8 percent, from $298,000 to $354,000.

Year-end inventory of all homes – single-family, condominiums, cooperatives and 2-4 family – mirrored 2022, with 329 properties for sale. Single-family homes accounted for 313 of that humber, up  one over 2022.

According to HGAR, inventory is suffering in part because homeowners who bought their properties when interest rates were in the 3 to 4 percent range are reluctant to put their home on the market and finance their new purchase at rates approaching 7 to 8 percent.

2024 HGAR President Carmen Bauman said the residential sales market last year was difficult. “Not surprisingly, the fourth quarter statistics for HGAR’s geographies are down over last year’s numbers due to the nationwide theme of lack of inventory and high interest rates,” she said. “Indeed, we closed out the year with an overall negative change in the marketplace averaging a decrease of almost 25 percent in sales.”

Bauman, who is an Associate Broker with commercial real estate brokerage firm RM Friedland, noted, “Still, my outlook for 2024 is a positive one. Real estate is not just an investment in bricks and mortar; it’s an investment in the promise of growth and stability. So, let’s keep the faith and see what this year will bring.”