The TOD deed is non-testamentary, which means that the interest in the real property transfers automatically to the designated beneficiary named in the TOD deed by operation of law and no probate or administration proceeding is required.
Rockland faces further challenges related to environmental sustainability, such as the diminishing availability of renewable energy sources, inadequate drainage systems, flooding and groundwater quality.
Existing-home sales in the Northeast in July climbed 4.3% from June to an annual rate of 490,000, an increase of 2.1% from July 2023.
“We should have more inventory. There absolutely should be more inventory than there is right now.”
WHITE PLAINS—The national and local real estate markets appear headed for a crossroads. As the Federal Reserve prepares to shift its regulatory position and will likely begin to cut lending rates next month, the industry faces a number of troubling headwinds besides high interest rates, such as: persistent low for-sale inventory, escalating prices impacting affordability and NAR practice changes that took effect on Aug. 17 based on its $418-million commission case settlement to name just a few.
Real Estate In-Depth contacted five veteran Hudson Valley real estate professionals to get their take on the aforementioned issues and their impact on the housing market in 2024 and beyond. They are: Leah Caro, Broker/Owner and President of Park Sterling Realty of Bronxville; Crystal Hawkins-Syska, Associate Broker, Keller Williams NY Realty, White Plains; Gail Fattizzi, Regional Manager, ERA Insite Realty, White Plains; Vlora Sejdi, Associate Broker, HomeSmart Homes & Estates, White Plains and Joseph Rand, Chief Creative Officer of Howard Hanna | Rand Realty.
In the first installment of the Pulse of the Market series, the Real Estate In-Depth panel was asked about market conditions now and going forward. All agreed that while lower lending rates will be helpful, the key to the market’s recovery is more inventory.
For background, on Aug. 14, the Labor Department released the latest Consumer Price Index data for July, which showed the CPI rose 2.9%, below analyst expectations. National Association of Realtors Chief Economist Lawrence Yun issued a statement sharing his thoughts on rates in reaction to the CPI numbers. “Inflation is calmer, thereby setting the Fed Reserve up to start the rate-cutting process in September. Consumer prices rose by 2.9% in July and look to head towards the desired 2% in a few months. The Fed has indicated the need to normalize and move away from the current ‘restrictive’ monetary policy and its willingness to cut if inflation moves towards 2% rather than waiting to reach 2%. Shelter costs decelerated to 5.0%, still high but clearly trending down as a temporary oversupply of new apartment units will further dent the figures. Auto insurance continues to rocket, up by 19% from a year ago. This does not bode well for property insurance bills.”
He continued, “Generally, the rate-cutting cycle is not one-and-done. Six to eight rounds of rate cuts all through 2025 look likely. Whoever sits in the White House in 2025 will see lower interest rates. However, a super-sized budget deficit could limit the decline in mortgage rates. More government borrowing means less mortgage money to lend. The new normal for mortgage rates will be around 6% and definitely not to 4% as was before COVID.”
“Pent-up buyer demand has not been dampened by current interest rates. Some people may have taken themselves out of the market, but I don’t think too many and some people may have had to re-evaluate what they can buy, their spending power as a result. However, the biggest crisis facing the market is the lack of inventory,” she said.
Caro, who served as president of the Westchester-Putnam Association of Realtors in 2009 and 2010, noted many homeowners that could or perhaps may want to sell, who are currently mortgaged at 2% or 3%, are staying on the sidelines and are unwilling to take on a mortgage of more than 6%. Caro added that until rates come down to levels near their current rate, a good number of these prospective sellers will continue to stay in their homes.
The longtime Co-Chair of the HGAR Legislative Council related that even after the expected September rate cut, prospective sellers will do the math and then determine if it makes financial sense to list the house. She believes many will continue to stay on the sidelines.
“I don’t expect (the seller’s market) to change unless something happens to shake up the market so that more inventory comes on,” Caro predicted.
Fattizzi said that interest rates will settle a bit lower in the short term as the Fed gets inflation under control and makes its anticipated cuts. “Will these lower rates increase the number of buyers? Maybe, but the obstacle is still inventory. I don't think that the lower rates will create enough additional listings to meet buyer demand, and those who list in the fall were probably going to do that anyway. So, I don't expect to see a big increase in the number of sales through the end of the year.”
Fattizzi, the 2020 President of the Hudson Gateway Association of Realtors, noted that in addition to the high rates and low inventory, prospective buyers are also dealing with escalating home prices.
“While the interest rates are one factor that buyers consider, the other is rising prices. Prices continue to increase. If you are looking at the higher interest rate and you are getting a great house at a reasonable price, it is much more digestible,” Fattizzi said. “Whereas if you are getting a house with what you feel is an inflated price based on conditions and other factors and at a higher interest rate on top of that it is really a deterrent.”
Fattizzi continued, “So, interest rates coming down helps, but if prices keep escalating and people aren’t feeling they are getting good value for what they are spending for the house, that is going to continue to be an obstacle as well.”
The veteran Realtor who also currently serves as the Mayor of Nyack described the current market as “strange.” Citing some similarities to the 2006-2008 seller’s market, Rand noted that the market 18 years ago was a seller’s market that was expanded by a credit bubble that eventually led to the housing downturn beginning in 2009. Today’s seller’s market features continued strong buying demand, but artificially low inventory levels due to potential sellers staying on the sidelines because of very low mortgage interest rates on their current properties.
He related that homeowners who would like to downsize or move face a conundrum where they cannot afford to pay a new mortgage of approximately 7% when their current mortgage rate at their existing home is between 3% to 4%.
Homeowners are saying: “I can’t afford to sell. I can’t move. They would like to downsize, but they can’t downsize because if they downsize their monthly payment is going to be the same at the new house, so why don’t I just keep the house that I am in,” Rand said.
He added, “We should have more inventory. There absolutely should be more inventory than there is right now.” In addition to low inventory, buyers have become increasingly skeptical of rising home values and are not willing to meet sellers at times lofty home price demands.
He said home sales volume is now down to where it was back in 2010. However, 14 years ago that down market was caused by low demand. Home values are currently at record highs in all of the markets in the three states that Howard Hanna | Rand Realty serves and home sales are at record lows in all those markets as well. While demand is lower than a year ago, there are enough buyers in the market to cause home prices to continue to rise.
Rand said that inventories are starting to rise as interest rates fall. He believes the “sweet spot” where property owners who have low-interest rate mortgages will seriously consider and perhaps put their homes on the market for sale will be below 6%. “We get interest rates below 6%, people will relax a little bit… and feel a little better.”
Sejdi, who is President-Elect of the Hudson Gateway Association of Realtors, said there continues to be a “tremendous amount of demand” and little supply of homes on the market.
“There is fatigue for buyers,” she said. “It’s been a rough two years. … There has been a lot of disappointment. It is hard to keep yourself from getting discouraged.” She has noticed that some of her prospective buyer clients who had taken a break from home searching, have recently re-entered the market.
Sejdi, who noted that home prices have risen sharply due to the lack of inventory, related, “First-time homebuyers definitely feel it the most, mainly because there is the most demand in the category and the least amount of supply.” However, intense competition and bidding wars are taking place at all price points.
She believes that market conditions will improve for the remainder of 2024. “I am hoping more listings come on the market, the problem is that even if rates do come down and I believe they will, they are not going to go down to levels that it will make a difference for someone paying at a 2.5% interest rate. … What it is going to do in my opinion is it is going to increase demand and the supply is going to remain pretty limited.”
The 2021 President of the Hudson Gateway Association of Realtors said the current market is the most “intense” since the housing crisis/crash in 2009. She said the seller’s market is particularly difficult on first-time buyers and added that “it is very hard for any FHA or VA buyer to even compete… Essentially those that must purchase are driving the market up in a way that seems unprecedented.”
Because the current market is so competitive, agents don’t have time for “tire kickers or window shoppers.” Inventory is low in all price points.
However, what she has noticed is that “Location matters. If you go to certain places more north, there is more inventory, but there is still high demand,” Syska related.
She believes that most homeowners will resist putting their homes on the market until rates hit 4% or lower. However, with the prospect of lower rates, she believes that while inventory will improve marginally, the buyer pool will increase with more people being able to secure financing. This scenario, she says, will likely cause home prices to continue to increase going forward.
“In many markets, where you are going to see the shift in inventory in any kind of major way is really going to be after November, after the election,” Syska said. “That is when I think we are going to see some movement in a way that is different because I think people are a little more concerned about who takes office and what that means to their bottom line.”
She added: “If the cost of living doesn’t come down dramatically, a lot of people are still going to hold in place.”
From September to November, she predicts that there will be buyers and sellers “panic” where they have to buy or sell quickly, which is going to keep the market in the current “sellers’ bubble.”
Existing-home sales in the Northeast in July climbed 4.3% from June to an annual rate of 490,000, an increase of 2.1% from July 2023.
The Hudson Gateway Association of Realtors has established a one-stop location for members to get the latest tools, forms and information on the NAR settlement and the practice changes dictated by the settlement reached in March of this year.
Since November 2023, Wright shepherded the association in early 2024 through negotiations that led to a $418-million settlement to resolve claims brought on behalf of home sellers related to broker commissions
When we’re talking about what our challenges are in the industry—there’s inventory, there’s insurance and there’s inflation. Those are things that we do not have control over, but those are things we continue to educate people on.”
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