Increased Home Sales Activity Points to Improving Market

The Orange County real estate market is continuing to improve with regard to purchase offers accepted, closed sales and listings. There has been a marked increase in activity beginning this past spring after a slower period during a snowy and bitter cold winter.

Listings have increased as have closed sales. Purchase offers accepted have risen dramatically during June, July, and August, which would bode well for closings in September and forward through the remainder of the year.

According to the second quarter residential home sales report released by the Hudson Gateway Multiple Listing Service, Orange County posted the largest home sales gain in the MLS’s service territory that also includes Westchester, Rockland and Putnam counties.

Orange County posted total sales of 742 units—mostly houses and condominiums—which surpassed last year’s second quarter sales results by 30.4%.

In its report, HGMLS officials noted that Orange County’s market has been powered in the last several years by an abundance of very moderately priced properties.

The second quarter median sale price of a single-family house in Orange County was $209,950, nearly 10% less than last year’s median. The condominium median was $151,625, about 8.0% below last year’s level. Inventory in Orange has stayed in rough proportion to the rate of sales, indicating a balanced market with ample choices for prospective purchasers, HGMLS officials maintained.

It should be noted that this increase in listings and sales is largely due to a substantial increase in foreclosure properties coming on the market. For a period of close to three years (2011-2013), a variety of factors:  1) governmental concerns over the way in which foreclosures were being done, 2) bank hesitancy in placing foreclosed homes on the market prior to decisions by the lenders, and 3) New York State policies regarding the procedures and processes employed by lenders to legally foreclose properties, resulted in very few foreclosed homes being placed on the market. By 2014 those issues were largely resolved and a backlog of foreclosures began to be listed.

The number of foreclosed homes now coming on the market is considerable and may account for more than 30% of all sales. As a consequence of that influx of foreclosed homes, values overall have continued to decrease. The average price of homes sold in Orange County in 2015 is about 5% lower than 2014 and the foreclosure market shows no signs of diminishing. We anticipate this trend will continue to be a large portion of the market for another two or more years.

That said, increased buying activity continues to be strong and houses that are realistically priced are often seeing multiple offers. With the economy improving, with gasoline and other heating fuel prices lower, commuting is less expensive as is homeownership. So, with an economy that continues to improve, with buyer confidence higher, housing prices lower, the expectations for a continued strong housing market through the remainder of 2015 is probable.

John Lease III is regional vice president-Orange for the Hudson Gateway Association of Realtors. He is also Broker/Owner of John J. Lease Realtors of Newburgh and Middletown, NY.