Upstate New York Sees Housing Market Sputter as Well
We’ve talked at length about the slowing housing market throughout New York State, but focused primarily on N.Y. City. According to the Utica Observer-Dispatch, the state of real estate isn’t much different 200 miles north.
When Jody Thomas decided to sell her New Hartford home, she thought the quality of the house, its school district and the neighborhood would have buyers flocking to it.
That was in April.
Three months later, she lowered the asking price by 5 percent to $138,000. Three months after that, she lowered the price to $134,900. The three-bedroom, 1,500-square-foot ranch-style house finally sold.
“It seemed like forever,” said Thomas, who sold a house in Clinton much quicker three years ago.
Houses are taking longer to sell, to the chagrin of local homeowners. Nationally, that process is being called the bursting of the bubble. Home values along the East and West coasts and in major Sunbelt states grew at such a rapid rate that they weren’t sustainable. Home builders saw their investments cut by 15 percent - the largest amount in 15 years - in the third quarter of 2006.
That slowdown has affected the New York mortgage demand in the Utica-Rome area somewhat, but nowhere near as much as it has in other parts of the state and country, because this area’s housing market never soared to such extreme heights.
“We saw moderate increases, but very moderate to the effect of 5, 6 percent, which actually protected us from what the rest of the country is suffering right now,” said Joseph Carucci of Prudential Real Estate.
There still is going to be growth in home sales and prices, he said.
“It’s a good place to buy a house because I think the home prices will be fairly stable,” agreed Celia Chen, director of housing economics at Moody’s Economy.com.
In fact, while the high home prices are projected to decrease in New York State and the country as demand falls, they will continue to increase locally at an annual average of 5 percent in each of the next two years.
The median sale price of a home in the Utica-Rome area was $104,000 in the second quarter of the year, a 7 percent increase from the same period last year. Compare that to a 2.7 percent increase — to $279,000 — for New York State and a 2.5 percent rise — to $228,000 — for the U.S.
“Tthere is an adequate supply of land. There’s not a lot of population growth. And the economy alone is not that fast growing. It doesn’t need to correct,” Chen said.
Still, those whose livelihoods are invested in the local housing market are noting the recent changes. Demand for new homes has declined, but it will likely hold steady for 2007, he said.
S. Utica residents Christopher and Kimberly Salatino were debating whether to build a new home or buy an existing one. The potential costs of custom upgrades and rising mortgage rates prompted the couple to buy an existing home.
“You end up spending a lot more than you planned because of all the upgrades,” said Kimberly Salatino.
The amount that buyers are willing to spend dictates which areas are hot, said Jerry Orsaeo, broker-owner at Weichert Realtors Campion-Weeks in New Hartford. In September 2004, Herkimer County had the cheapest existing single-family median sales price of New York’s upstate counties.
By September 2006, though, the county had experienced the second biggest percent increase — 82.7 percent — to $94,900. A New York mortgage payment on such a modest amount would make people downstate salivate.
“It’s a small market, there might have been a lack of housing at the time for a number of buyers,” Orsaeo said.
South and North Utica and parts of Whitesboro are popular for buyers who want to spend between $80,000 and $90,000, while Clinton and New Hartford are attracting buyers spending between $250,000 and $350,000.