For Cortland County residents looking to sell their homes, now is the time Realtors said, as a combination of lower mortgage rates, increased demand and reduced inventory — much of it driven by the COVID-19 pandemic — have driven prices up nearly 13% in the past year.
“We really didn’t know where things were going to end up when things freed up,” said Joanne Sweeney, the 2020 president of the Cortland County Board of Realtors and an associate broker for Berkshire Hathaway HomeServices Heritage Realty in Homer. “The market just went crazy.”
Between March and April, real estate agencies weren’t able to do business because of the coronavirus pandemic and Gov. Andrew Cuomo’s executive orders, said Dana Decker, a principal broker with Berkshire Hathaway HomeServices Heritage Realty, said Thursday.
“With the inventory of homes for sale still constrained, a competitive market for buyers shows little sign of waning,” states the July market trend report from the Cortland County Board of Realtors. “New listings were up 34.7% to 66. Pending sales held steady at 34. Inventory shrank 14.6% to 146 units.”
Prices in July were also up 12.8% from July 2019, with the median sale price at $148,000 and the number of days a home spent on the market also decreased to 45 days in July from 49 a year ago.
“It’s absolutely a great time to sell your home,” Decker said.
Sweeney said some homes are even selling above asking price.
The increase is more extreme than the national trend. The average home price in the U.S. in May rose 4.2% compared to a year ago, reaching record highs. And cheaper homes, those in the lower third of the market and a typical target for first-time buyers — grew faster than the rest of the market, rising 6.7% from a year ago.
The pandemic pushed the U.S. economy into a deep recession as many businesses shut down, which in turn forced the hand of the Federal Reserve to dramatically lower interest rates. The average mortgage rate fell to below 3% from around 3.75% at the beginning of the year in a matter of weeks.
That sudden drop in mortgage rates was an instant boon to home affordability, economists said, allowing many buyers to afford much more expensive homes while keeping the same monthly payments.
The pandemic also caused sellers to delay putting their homes on the market. Nationally, the supply of homes for sale in May dropped 30% from the previous year.
Decker said that as many people spend more time at home, they are taking note of what they would like to see in a home, and that could be one reason there has been an uptick in people looking to buy homes.
The other reason is that the spring selling season didn’t really kick off until summer because of the virus.
“I think it’s under a magnifying glass right now,” Decker said, noting the real estate market is the busiest he’s seen in his 15 years as an agent.
He also said real estate agencies are seeing some people moving from urban areas of New York to more rural areas and even Central New York.
That only accounts for a small percentage of the uptick in the market, he said, however, he does think more people will come, looking to move out of urban areas.
“How long this will go on we just don’t know,” Sweeney said.
The Associated Press contributed to this report.