Inside the Freak-out Housing Market of Upstate New York
In the past year, the real-estate market has — well, gone berserk. Houses are going for millions over asking in Boise and Albuquerque. Buyers are offering to name their firstborn baby after sellers. In this new series, Realtor Diaries, we talk to the people at the center of it all — about the 2 a.m. emails from clients, the 16-hour, six-day-a-week workdays, and the all-cash offers coming in from people who’ve never once seen the property they’re buying.
This past year, in upstate New York, city dwellers swarmed small towns and villages, turning what had, even before the pandemic, been a very competitive housing market into pandemonium: real-estate lust spiked by panic. When it came to the most in-demand properties — tastefully furnished farmhouses with wide-plank floorboards, Scandinavian-inspired cabins, anything with a pool or priced under $500,000 — it wasn’t uncommon for brokers to field 15 or 20 offers. We talked to brokers in three of the wildest upstate markets: the Hudson Valley, the Catskills, and Kingston.
Dutchess and Ulster Counties: Raj Kumar and Annabel Taylor, Sotheby’s Lillie K. Team.
During the first half of 2020, some $348 million in real-estate deals happened in Dutchess County, a popular part of the Hudson Valley. In the first half of 2021, that number was $709 million.
A.T.: At the very beginning of the pandemic, April or May, these lovely clients called us from London. They said, “We’re moving to the Hudson Valley, we want to find a rental, then we’re going to look at houses.” They called a week later, they said, “We found our house, buy it for us.” It was a beautiful stone house, they paid over ask. A year later they called and said, “Thank you so much for getting us this house, we hate it.”
R.K.: They don’t hate the house, they hate the Hudson Valley. They always had this fantasy about what living in the Hudson Valley would be like, but once they got there, it was cold, not a fantasy anymore, and they wanted to go home.
A.T.: They bought it for $1.350 million and we just sold it for $2 million not even a week after listing it.
R.K.: 99 percent of the people we’ve sold to are very happy. There are obviously some people who have buyer’s remorse. We have a mortgage broker that we always go to who’s very annoyed with us and thinks we’ve been giving our business to other people, but the thing is no one is buying with a mortgage lately — they’re just paying cash. Which is mind-blowing. I think about half our deals are done cash deals. Before, only 5–10 percent were all cash. There’s a general rule of thumb: It takes a year to sell for every $1 million. So, a $2 million house takes two years to sell, and so on. But last month, we launched three $2 million listings, and sold all of them in less than a week.
A.T.: In 2019 there was not a single sale of a residential home over $2 million in an entire year in all of Columbia County. We kept thinking it was just a moment in time and things would settle down. Compared to last year, it does feel like things have settled a bit. Last year when the pandemic was first happening, it really felt like these buyers were coming up and it was life-and-death. There was no inventory, people were making bad decisions. Buying houses with no character, or a laundry list of problems. We’d get calls from people halfway into the pandemic who said, “I bought this house last year with another realtor, it has so many problems, do I pour money into it or sell it?”
R.K.: More than 80 percent of our clients are between 25 and 40. More than half of them had started moving up full-time before the pandemic. It just went crazy during the pandemic, but the shift had started before. I think the prices are going to continue to go up.
A.T: Right at the beginning of the pandemic, there was a frenzy. People were selling a shit property for a lot of money. It was physically exhausting to a point; we were working 16-hour days five days a week. Our phone would be ringing 100 times a day, someone saying, “I need to get into a house now,” while we’re at another house with buyers, trying to handle our listing agents.
R.K.: I would send an email out to our clients at 1:30 in the morning. What was worse was I would get a reply back at 1:45. They were that focused on making that purchase. Everyone was stretched thin, the inspectors, the attorneys, anyone related to the real-estate business was overstretched.
A.T.: We had a few celebrities reach out to us and a few buying. In a normal market, a seller would get really excited by that; in this market it was just like, “Okay, well, what are they offering?” It was who had the best price and best terms. It was very cutthroat. We had tons of contracts sold out from under us. We make sure to work with the best and fastest attorneys so our clients didn’t miss out. We’ve had deals with people in place, but if their attorney wasn’t fast enough and it took a week to sign a contract, someone else could easily slide in — it’s really not done until the ink has dried on the contract. There were a few houses in particular buyers went crazy for. 55 Woods Road in Barryville. It was an Instagram sensation even before we got our hands on it; the owner had written a book called Cabin Porn. We had to hire a full-time admin to field the emails and DMs on Instagram. It sold for significantly over ask very quickly. It went into contract over the first weekend of showings; the offer was exceptional both in price and in terms.
R.K.: Steven Holl is probably the best living architect in the U.S., No. 3 or 4 in the world. One of his masterpieces built in 1998, the Y house, built for an Austrian family that sought him out, they own one of the largest private museums in Europe. They own this house in Middleburg, and decided to sell. Middleburg is kind of a needle in a haystack, further from the city, not the most developed. I ended up selling it to a buyer who lives in Dubai, who had never been to the Hudson Valley before, and who bought it over Zoom for $1.6M.
Sullivan County: Robin Jones, Country House Realty
In Sullivan County (located in the western Catskills), reports show median sales prices for single-family homes rose 35 percent over the past year.
I primarily work in the second-home market — my clients are almost entirely coming up from the city. During the height of the pandemic, any house in the area would have at least 15 offers, all at least $50k over the asking price. No matter what that asking price was. We have one client right now with a $900,000 budget who has lost four bidding wars, and who is feeling fatigued.
I was the selling agent for this beautiful farmhouse in Livingston Manor. It was renovated by a design couple, Homestedt — they ran it as a B&B for a while. So — well-designed, on six acres, and we listed it for $450k. During the first open house, we already had offers $50k over the asking price. At the end of the second open house, there were already eight offers on the table.
COVID kind of pushed window shoppers out of the market. You just stopped being allowed in any house until you had bank preapproval of funds. It was important both to reduce the flow of people during the pandemic, and because houses were flying off the shelves the same day. If you weren’t ready, there was no point for you to be there.
People tend to want either modern builds, boxy Scandinavians, or renovated farmhouses, with white-painted wide-plank floors. But by last fall, buyers were trying to get creative and find other things, like gut renovations. I saw the prices of those were going up. Also land prices started increasing as well, which is something we’d never really seen before — people were like, “I can’t find what I want, I might as well just build something.” I advise people, get an understanding of how long it will take — I mean, pre-COVID, it could take two years or so, even for something small, and now labor is very, very hard to find. Contractors are backlogged, and so is wood. So if you want to replace your floors or do any renovation work that involves wood — you could be facing months, years. I have a client who took about two years to finish a 300- or 400-square-foot A-frame. They went through three contractors.
Some people got really — well, ambitious with their listing prices. I’ve seen million-dollar listings that should have been like $450k. I started having a conversation with every one of my clients — basically saying, “If you buy in this market, you will be overpaying.” There’s no such thing as a deal in the Catskills in 2021. That is the context we’re working in. I didn’t want anyone to feel hoodwinked into overpaying.
Kingston: Megan Jo “MJ” Collum, Country House Realty
According to the National Association of Realtors, Kingston — previously one of the more affordable cities upstate — is the “hottest market in the nation right now.” Now, inventory is rock-bottom and prices are skyrocketing.
Before the pandemic, people wanted to live near, but not in, Kingston, to have the true country experience — they liked Stone Ridge, Woodstock, Hurley. Close enough that they could come here for dinner. But after COVID hit, they wanted full-time homes, and they wanted to buy in places where there were things to do. So: Kingston, Red Hook, Rhinebeck, and Tivoli. I think they just realized, you know, If I’m going to live permanently upstate, I don’t want to live alone in the woods.
I think the biggest issue we had — and still have — here is the limitation on housing stock. The good housing that is available, people are fighting over it. The average sales price in 2020 was $252k, and the average days on market was 68 days — down about 20 percent. Average sale price is now $315k, an increase of 25 percent from 2020 to 2021.
Kingston has very old housing stock. We have a lot of Victorians, and there was also a building boom in the ’50s and ’60s, so there are a lot of one-story ranch houses. And then there was the IBM boom in the ’70s and ’80s. Most of these places have not been renovated, and many are filled with lead paint and asbestos. Heavy-lift homes, in other words. But they’ll sell. For way over.
For instance, there’s this house on the market right now that is a complete fucking disaster, 116 Henry. The bathroom is gutted, not on purpose, it has just completely fallen in. The roof has a giant hole in it, the porch is missing a column, the kitchen is an addition. Which is not even mentioned in the listing. They’re asking $225k — before the pandemic, maybe it would have gone for $100k. But my client put in an offer for full-price offer, and they wouldn’t accept it — they wanted over.
And at the end of the day, it’s also crazy because you’re dealing with New York City people. One of the things we have to talk to our buyers about is that things happen up here on upstate time. Things don’t move as fast, people are not as motivated as people in the city. Having that patience can be challenging for city folk. That being said, I closed 32 transactions in effectively ten months.
I did have to take a couple months off at the beginning of this year to recover from it all — I still feel slightly hung-over from the whole experience. It just felt like drinking from a fire hose most days.#thevillagesmortgage #thevillagesfl #thevillagesflorida