At a Standstill

At a Standstill

Area housing market comes to sudden halt due to COVID-19, but real estate brokers express optimism

By Lou Sorendo

COVID-19 has done its share of damage to the local economy, including a real estate market that was packed with promise at the beginning of the year.

“Personally, I feel the COVID-19 situation hopefully will be relatively short-term,” said Thomas Haggerty, broker-owner of Century 21 Leah’s Signature in Fulton and Liverpool. “On the other side of this, we will see the recovery of the economy and housing marketplace.

“I think the housing marketplace stands a good chance of being minimally impacted by the COVID-19 situation, if it isn’t protracted.”

Despite the pandemic, people still need to buy and sell housing for various reasons, including life-changing situations such as death, marriages and divorces, he noted.

“Those life situations can greatly impact the type of housing they need at that point in time,” he said.

“Although it is possible that there could be a standstill, it the situation doesn’t become protracted and is relatively short-lived, I can foresee a recovery of our housing market place certainly by the end of the year,” he said.

Haggerty said early March was “very good” in terms of real estate activity prior to the arrival of COVID-19.

He said with a relatively mild winter and spring, there had been “virtually no slowdown of activity on the market.”

“We had people who wanted to see houses and putting purchase offers on houses on the last day that we could legally do that,” Haggerty said.

In late March, the New York State Association of Realtors outlined restrictions for real estate licensees and brokers, including no open houses, no showings of houses listed for sale or rent, and no in-person listing presentations.

Seller’s market

Up until COVID-19 reared its head, Oswego County was in the midst of a seller’s market as prospective buyers were busy placing purchase orders of properties.

Haggerty noted that when a property comes on the market, typically there is a flurry of activity in terms of showings. “If the property was appropriately priced, you would receive more than one offer within that first week of showings,” he said.

He said a seller’s market exists when there are fewer homes for sale in the marketplace compared to what the demand is.

“That tips the balance in favor of the seller, because now they have a commodity that is more desired by more people,” he said. “When you have less items for sale but they are desired by more people, that drives the price up.”

Conversely, should there be a surplus of inventory, the scale would tip in the other direction and it would become a buyer’s market at that point.

Haggerty said in his experience, Oswego County has historically been a very balanced county in terms of not being either a buyers’ or seller’s marketplace.

In fact, 2019 was actually an anomaly, he said.

“That was the first time in nearly 20 years that we have seen a solid seller’s market,” Haggerty added.

Haggerty said he believes the factors that led to a seller’s market were primarily tied to a robust economy.

“The economy nationwide is booming, and that trickle down effect — believe it or not — has reached Oswego County,” he said. “When the economy is chugging along, that makes everybody more confident about buying a home in particular. It’s the American dream to buy a home. The rising economy definitely led to more people being in the marketplace to purchase a home, and that led to the seller’s market.”

Haggerty said Oswego County has been stable as far as the number of homes that are in the marketplace.

“Absent the current situation with COVID-19, I really don’t see any change in the marketplace. However, it’s really dependent on how the economy picks up after we are through with this COVID-19,” he said.

Price drop explained

According to the New York State Association of Realtors, the median sales price of a home in Oswego County was $90,163 in February of 2020 compared to $111,125 in February of 2019.

Haggerty said the decrease could be attributable to being in a smaller market compared to other locations throughout the state.

“It could be that a few home sales in the prior year were much larger. They might have been $200,000 to $400,000 homes that sold in the prior year, whereas this year we didn’t sell that $350,000 house during January,” he said.

“That appears to negatively impact our marketplace in a much greater fashion than it would some other marketplaces that have more homes that it is selling during any given period,” he said.

Meanwhile, mortgage rates in New York state as of March 26 were 3.75% for a 30-year fixed, 3.06% for a 15-year fixed, and 3.64% for a 5/1 adjustable-rate mortgage.

Haggerty said expectations call for interest rates to follow a downward trend.

“Mortgage rates will become even more attractive to spur more buyers to go out and buy a home,” he said. “Three to 4% is already attractive, and when you hear that the mortgage rates are likely to go down for a period of time, that will make it even more attractive for buyers to want to go out and buy a home.”

In late March, the New York State Association of Realtors outlined restrictions for real estate licensees and brokers, including no open houses, no showings of houses listed for sale or rent, and no in-person listing presentations.

Looking for silver lining

William Galloway, broker-owner of Century 21 Galloway Realty in Oswego, said prior to the COVID-19 pandemic, he was seeing “very high” activity with buyers in the market and homes selling for a higher value than the year before.

Galloway said there is not a surplus of homes on the market for sale, which helps sustain a seller’s market.

He said the low inventory of homes for sale has been an issue for Oswego County as well the entire country.

“With less inventory, the value of homes increases, which makes it a seller’s market,” he said.

In terms of homes for sale, there were 332 units on the market in February in Oswego County, a 5.4% decrease compared to year-ago figures.

“COVID-19 has shut down real estate activity for a period of time, but when we are able to actively list and sell property, we expect the market to be more robust than 2019,” he said.

The stoppage in real estate activity has significantly skewed results for the second quarter of 2020.

“However, with interest rates dropping to record lows and buyers ready to go, the market will be extremely busy. We are getting calls to list properties, so sellers can take advantage of the market,” he said.

“What we want everyone to know is that Century 21 Galloway Realty is concerned for the safety and health of our clients, the public and all of our agents and want everyone to remain safe and healthy,” he said.