Kids are officially back in school (fingers crossed.) I hope all had an enjoyable summer. We have entered the next "pop" in real estate sales in our area with Fall market historically the second highest in sales volume behind Spring market.

Fall market kicks in just after Labor Day weekend and lasts until the beginning of November. Historically speaking, real estate slows down for the winter with signs of real estate life returning in January/February prior to the full rush of Spring market. That's the historical real estate cycle in our region. Net net: if you want to sell, sell now while still in a sellers market and before winter hits.

This and more so grab your coffee and let's go...

The list of price reductions, expirations, lengthy days on market and noticeable increase in open houses lately prove not all homes are flying off the shelf, regardless of continued inventory levels that, per Mid Hudson multiple listing service, continue since May, 2021 to be approximately 30% below the last recorded historic inventory shortage of May, 2004.

So how do we have an inventory shortage yet houses sitting? Here are some (there are more) current examples.

I went on a listing appointment for a home. I will provide no identifying details as I would prefer not to have daggers thrown my way by the listing agent. I believe it is an important part of my job and responsibility to keep a very firm pulse on the market for both buyer and seller clients. That's how The Brick was born in the first place. I take pricing very seriously with successful sales histories leaving a high degree of confidence in my pricing recommendations.

Based on comparatives and overall market knowledge, I recommended an open price of $619,000. I don't blow smoke to get listings and value my time and the time I dedicate to my clients too much to take on an overpriced listing. It listed with another realtor for just under $850,000.

The house continues to sit, which is no shocker. I'm seeing this over and over. Another house came on the market for $750,000 back in January. Several price reductions have it now listed at $585,000. I pulled comparatives and spent an extensive amount of time evaluating as my clients really wanted the house but I could not in good conscience counsel my clients to the asking price as it simply was not comping there.

I sent the listing agent the comparatives and invited her analysis, which only served to solidify reduction counsel to my clients. My clients were willing to go a bit higher if needed, but opened at $529,000, which was at the higher end of range based on comparatives. A house that has been sitting since January with last reduction to its current price nearly 60 days prior refused to even counter. My clients walked with my full blessing.

Buyers have accepted elevated Covid adjusted pricing to a certain level, but there is a line they are generally not willing to cross, unless by their choice (ie: bidding war). Buyers have proven willingness to climb the pricing ladder against each other for solid priced and effectively marketed homes, particularly if they check "coveted boxes." Multiple offers are still alive and well in this market. My clients routinely enjoy them. In fact, my clients have realized $30,000-$211,000 over ask since the real estate gates re-opened in June, 2020. Two of my clients sales set Dutchess County records during this period. Conversely, buyers will walk, often in disgust, from overpriced listings. This is being proven over and over again in a multitude of sale histories of sitting homes in a market with historically low inventory available. Buyers, for the most part, are done with absurdity, but it seems not everyone is catching on to that just yet.

The longer a home sits on the market, particularly our current sellers market, the more buyers wonder what's wrong with the house. If multiple offers are to be had, it is most often during the critical first two week market entry period. With these facts combined, opening high and "reducing if no one bites" is not a strategy, but rather a gamble with bad odds that rather dissuades buyers from involvement during the crucial market entry window which inherently can lead to potential loss of multiple thousands in return by sitting rather than selling strong.

Another underlying indicator that certain houses are not moving swiftly: increased need for open houses. Per the MHMLS (and my inbox with notifications!), the number of open houses has jumped dramatically over the past eight weeks. What does that mean? While the number of open houses is still a fraction of active listings, this means more houses are not jumping off the shelf and require extra juice to capture buyer attention. Over this past year, open houses ranged from 0-3 per month. Over the past eight weeks, this number jumped to 25-30 per month, per MHMLS.

August, 2019 saw 237 closed sales with 1,365 homes available in the Mid-Hudson MLS ("MHMLS"), which was considered a balanced inventory month based on trending at the time. Also per MHMLS, August, 2020 realized an increase over August, 2019 with 285 closed sales, yet decrease in inventory to 991 active listings. August, 2021 saw a 10.5% dip from the August 2020 number to 255 closed sales with 624 active listings.

With 624 homes available August, 2021, the available inventory since the record hitting low in May has stayed consistent for three months straight. I will be watching September numbers forward as a break in this recent steady inventory hold could clarify whether we hit inventory shortage apex. Unless there is a trigger (economic being a central one), I suspect the shift out of the current inventory squeeze will, at least initially, be gradual. None of us has a crystal ball, but I would not be surprised if a trigger (or multi-prong triggers) enter the equation to ultimately catapult momentum into a market adjustment.

Then there are closed sales. The month of August 2021 is down 10.5% from August, 2020. The YTD tells an entirely different story. YTD through August is up 33.9% in closed sales over 2020. The YTD median sale price is up 1% higher than the average at 22.7% over 2020 equating to a median sale price of $389,000 in August 2021 versus $317,000 in August 2020 per MHMLS. YTD sales dollar volume is up a whooping 63% over 2020 at $861,277,359 versus $528,404,591 YTD 2020. YET, August 2021 sales dollar volume is up only .5% over August, 2020. 63% YTD yet only .5% when looking at August 2021 versus August 2020. Hmmm...

Increased open houses, buyers walking from overpriced listings, inventory shortage plateaued for three months straight, marginal increase in sales dollar volume in August, 2021 versus August, 2020 yet a YTD increase of 63%. IMHO, we have hit or are very close to hitting inventory shortage apex and we are coming into an adjustment that will most likely be gradual, if barely noticeable, at first. I believe a trigger (or multiple triggers) will be what ultimately feeds inventory back into the market - whether increased interest rates, foreclosure aversion, unemployment, increased taxes, etc. This is all about supply and demand. As more inventory enters the market, the pendulum shifts. I'm going to be watching the upcoming inventory numbers like a hawk as in the moment that appears most likely the first statistical indicator we are going to have of an impending shift.

My child is getting seriously into the electric guitar. After starting barely two months ago, AC/DC's "Thunderstruck" is almost nailed and Van Halen "Eruption" is seriously in the works (aim high!) Fresh from the hospital, my mom came with us to buy her first electric guitar. Go mom!

One of my musician clients/friend recommended the Rock Academy in Saugerties/Woodstock. We went on a tour last night and I am incredibly impressed and totally thrilled at the opportunity the Rock Academy provides for kids (and my child!) Private lessons, rehearsals, performances and even the opportunity to tour! The real thing - tour bus and all! In fact, before Covid, they went to Germany on tour! (I need to sell more houses!!!). We left with a skip in our steps. If you have a child interested in music, I can't recommend exploring the Rock Academy enough. Thanks for the recommendation SR!

I'm transitioning all to Hudson Valley Nest. Future editions of the The Brick will show "spark@hudsonvalleynest.com" as sender. Please update your email if needed so you don't miss a beat!