Low supply drives up home prices

Low supply drives up home prices

YATES COUNTY--The COVID-19 pandemic has done little to stymie a Yates real estate market where demand continues to outstrip supply. The median house price also went up by roughly $16,000 in 2020 compared to 2019. While the number of sales for 2020 dropped less than 1 percent compared to 2019, the number of homes for sale dropped 22 percent.
"We had two months where we were shut down then it went insane... we have had low inventory for five years but it went from low to (next to nothing)," said Dan Morse, broker and co-owner of Keuka Lake and Land Realty. "It is pretty much guaranteed if you put something up for sale, it will sell."
According to numbers provided by the Greater Rochester Association of Realtors, the 2020 median housing price for 2020 in Yates increased 9.8 percent to $184,750 compared to $168,252 in 2019. In total, there were 322 homes for sale in 2020, which was a 22 percent decrease compared to 2019. The difference in sales for 2020 compared to 2019 is still in the process of being tabulated as sales information from 2020 continues to filter in. Currently, 259 sales are listed for 2020 in Yates County compared to 255 for 2019, however, according to Lanie Bittner, president of the GRAR, the true difference is that sales in 2020 are roughly down less than 1 percent compared to 2019.
"Sales in the Finger Lakes were down but that was more of an inventory shift... Over the past five years we have seen a steady decline in the number of homes for sale with steady interest from buyers which has driven the price up," Bittner said.
Bittner added sales were driven, in part, by the increased demand in secondary homes created by the COVID-19 pandemic.
"Boat sales [are] up, pool sales [are] up, secondary home sales [are] up," said Bittner. "People want to stay home with families but still get a change of scenery and get some outdoor recreation like on a lake."
With many people interested in secondary homes within driving distance of their primary home, many recent buyers have been from nearby cities.
"2020 was exponentially good," said Morse. "Our sales were up 20 percent and there was a huge influx of buyers from New York City, New Jersey and Philadelphia as people are fleeing the cities."
Not only are these city buyers looking for secondary homes, but many are looking for new primary residences as the prevalence of remote employment increases.
"Cabin fever has done a good job driving the real estate market here," Morse said. "And you have never seen so many cash buyers in your life... Millions of dollars in cash has been injected into the Yates real estate market."
It is not unusual for houses to receive up to 12 offers, some as much as 30 percent over the asking price depending on the location.
"Right now one house is for sale on Keuka Lake when in previous years 30 would be considered low," Morse stated. "You can't hardly find a house for sale on Seneca Lake, I don't even know if one is for sale right now. Inventory can't be much lower than this."
That trend has continued into 2021, as Bittner said there are only 60 houses for sale this February in Yates compared to 100 available in February for 2020. How long Yates' strong sellers market continues is anyone's guess.
"I am not sure how long this keeps going but I think for at least the next 18 months to two years," Morse said. "The thing that could change it is interest rates are ridiculously low and if they go back to where they were 15 years ago that would flip the equation around. The other factor is (municipalities) are starting to crank everyone's assessment up and taxes increase as a result."
According to the Elmira-Corning Regional Association of Realtors, in Hammondsport in 2019 66 homes were listed for sale with 36 sales for a median housing price of $170,000. In 2020 the number of homes listed decreased to 47 with 23 sold for a median housing price of $175,000.
In Schuyler County, median housing prices rose, while the number of homes sold dipped slightly in 2020 compared to 2019.
"Even with the two-month shut down it was a brisk year for sales," said John Franzese, broker for Franzese Real Estate. "The biggest issue is lack of inventory, we have more buyers than sellers and that's continuing into this year. If a place goes on the market right now and it's priced right it's gone within days, it's that quick."
In Schuyler County in 2019, 221 homes were listed for sale and 120 sold for a median housing price of $145,000. For 2020, 216 homes were listed with 114 sold for a median housing price of $157,000.
"Buyers are competing for fewer available homes and the resulting price gains are creating opportunities for sellers," said Lisa Lilley, president of the Elmira-Corning Regional Association of Realtors.
"There [is] not a lot of new housing and not a lot of places to build new housing like in Watkins Glen, so that's part of it," Franzese said. "Add in COVID and people aren't traveling and they are staying close to home... if you have a decent property priced right it just goes very quickly."
In previous years, Franzese said Watkins Glen was already trending in the right direction, but 2020 created a confluence of factors to drive an incredibly strong market.
"I think everyone wants to live in Watkins Glen, it's been discovered especially in 2020," Franzese stated. "We have a vacation rental just outside Watkins and we had a lot of people stay from in-state, especially from New York City. COVID [is] forcing more local vacations, which is helping Watkins."
While prices are increasing and availability is low, one factor that might be driving the market is that houses in Schuyler, and especially Watkins, are not just affordable but are also a good investment.
"It's a good place to buy because it's relatively cheap and prices are going up as well," Franzese added.
With tourist destinations like the Finger Lakes, the wineries, Watkins Glen State Park and Watkins Glen International, Franzese mentioned local businesses and groups have done a wonderful job of selling Watkins Glen as a great tourism spot.
"And these are the best interest rates I've probably ever seen in my life," Franzese said. "They can't go a whole lot lower than this."