May brought a taste of summer to the Catskills, with a couple of days inching toward 95 degrees. That’s unusual.
What’s becoming the norm is a hot real estate market - a strong demand for houses from buyers either fleeing the city, or running from even more severe climates in other parts of the country.
The buying frenzy that began during the COVID shutdown has been tempered by rising interest rates, but there are increasing numbers of people from the West Coast and the Southwest who have decided that the Catskills are a good bet as extreme weather — drought, heat, and wildfires — makes living in some other parts of the country not just uncomfortable, but nerve wracking.
But none of them are going to buy just anything. They’re selective. Interest rates are up. They know it’s a seller’s market, and, for the most part, they keep their heads. An overpriced property sits on the market until it gets to a reasonable price. It almost looks like old times.
But good properties, well priced, are a different story.
That’s when the showing appointments pile up, the offers pour in, and buyers find themselves adding escalation clauses to their offer, hoping their very best bid, the top dollar they’re willing to pay, is enough to beat out the competition. Too often, it isn’t.
One couple I’ve been working with began their hunt by underbidding on houses they liked, assuming that if they offered cash, their offer would win. It didn’t. Their latest was a full price offer, then they added twenty thousand dollars to that offer in their escalation clause. It wasn’t enough.
And here’s where the frenzy of 2021 comes back to haunt us. Those buyers then second-guessed themselves, wishing they’d offered even more.
The fact is, at twenty thousand over asking, there was a very good chance that the house would never have appraised. It doesn’t matter with a cash sale, and yet it should. If you overpay for a house, and anything happens that you need to sell, your odds of walking away without a significant loss go down substantially. It is hard to imagine that the 20%-plus increase in prices we’ve seen in the past couple of years is going to continue. Which means, for now, buyers are paying top dollar.
What kind of house is selling right now?
The Catskills locals are, for the most part, looking for the suburban tract houses, the ranches, the raised ranches, are moving fast and getting multiple offers. The buyers are either first time buyers or retiring downsizers. And there’s just not enough properties available to satisfy the demand.
The out of towners seem to fall into two categories — the ones who are moving here full time, or the ones who may want to move here eventually.
The full timers are either looking for their dream farm or dream home, or they’re prioritizing community, proximity to people they know, and Internet connectivity.
The Catskills have surprisingly good Internet coverage, thanks to both cable and a growing network of fiber optic lines. But it’s not everywhere. Not yet. And cell service is always spotty in the mountains.
The part timers want an investment. They want a place they can enjoy, and they’ll make money through vacation rentals when they’re not there. Many of them plan to move to their vacation home full time someday.
What kind of properties draw them? Something with a view, that’s easy to care for, a couple of acres or more, a bit of privacy. It can be a simple cabin, or a rambling house with twenty acres. It’s all a variation on a rural theme.
And right now, it’s what everyone wants.