Tips & AdviceUpstate New York Housing Market Explained

Upstate New York Housing Market Explained

Do you long for open space and the sight of spectacular foliage in autumn? If so, the Empire State has much to offer outside the Big Apple. A short drive from New York City, upstate New York features vibrant, walkable small towns, a plethora of natural beauty, and a generally slower pace of life. If you’re tired of the breakneck pace of urban life and thinking about moving, you’ll find upstate homes listed at lower prices than similar-sized properties in the city. Here’s a handy guide to the current real estate market throughout the Catskills and Hudson Valley region.

State of the Upstate Market

The recent COVID-19 pandemic affected the housing market and shifted the priorities of potential homebuyers. Those who previously considered purchasing property in New York City expanded their possibilities to other towns throughout the state. A shift to remote work, combined with a desire for more affordable homes with increased square footage, left buyers seeking towns with lower population densities. Buyers could no longer justify the high real estate prices in areas like Manhattan or Brooklyn if they were not commuting to the office or taking advantage of the city’s conveniences, activities, and opportunities. As a result, like many other suburban and rural areas of the country, the Catskills and the Hudson Valley experienced a housing market boom.

Additionally, historically low mortgage interest rates promoted real estate activity for potential buyers who could afford to purchase a home. Those who previously considered buying a property grew more inclined to take advantage of rates that reached lows of 2.65% in January 2021. As more buyers looked upstate, local housing markets witnessed accelerated activity.

Low Supply Meets High Demand

While upstate New York home prices rose by 30%, real estate costs still remained relatively low compared to big cities. However, small towns do not have as much available inventory as large co-op or condo buildings, leaving some buyers without options. Those who still decided to purchase property engaged in bidding wars, where multiple sellers attempted to secure a piece of attractive real estate.

The pandemic simultaneously interrupted supply chains for materials like lumber, decreasing the rate of new home construction. Even today, demand for homes in the upstate region continues to outpace supply. Those who wish to purchase property may need to wait for a desirable home that matches their search criteria.

The Effects of Rising Interest Rates

Similar to many other cities and towns nationwide, 2022’s rising interest rates forced some potential homebuyers out of the upstate New York market. Interest rates peaked at 7.08% in the Fall of 2022, slowly dropping to around 6.3%. While interest rates remain high, buyers realize that interest rates may not significantly drop in the near future, inspiring their homebuying process. However, inventory across the market remains low.

After delaying a home purchase for several months or more, some homebuyers have decided not to wait much longer and returned to the market. Signs of rising activity indicate that upstate New York buyers appear willing to deal with higher rates to secure a home. Those looking to move upstate in 2023 will find that inventory remains low.

Living in Upstate New York

Why would a homebuyer consider looking at properties in Upstate New York? If you want more space and perhaps a couple of acres of land, you can get a lot more for your money compared to the high cost per square foot of condos and co-ops in NYC. If you’re ready to exchange city traffic hassles for a little, or a lot, of snowfall, you may want to spend time looking in farther-reaching areas of New York.

Compared to the years leading up to the pandemic, homebuying in upstate New York has grown more appealing. Those who work primarily from home or on a hybrid basis can justify living farther from Manhattan as they will not spend as much time commuting to the office. Additionally, their NYC salaries stretch farther and provide more purchasing power in upstate real estate markets than they do in the competitive and higher-priced city boroughs. Potential buyers can consider how often they commute into areas like Midtown to determine the ideal town that matches their budget and provides a reasonable travel time.

If you want to start a home search upstate, remember that each individual town and city has its own character. With a lower cost of living upstate, areas like the Catskills and the Hudson Valley, along with the capital region of Albany, comprise self-contained housing markets influenced by factors outside of the NYC real estate market. At the southern end of the Hudson Valley, Westchester County serves as a bridge between the city and the upstate New York real estate market. There, you’ll find some of the most expensive homes outside of the city but also a link to a more suburban lifestyle.

Various Upstate New York Markets

While inventory remains low across the board, diligent homebuyers will discover a range of housing in upstate New York with varied architectural styles and desirable amenities. If you’re looking to buy a home outside of the city, don’t forget to enjoy the journey and spend some time exploring what each upstate location has to offer.

Albany

Home to the state government and the governor’s mansion, the city of Albany has a lot to offer new residents. Located on the banks of the Hudson River, Albany features beautiful architecture, history, and Empire State Plaza. Potential homebuyers will discover many quaint, older homes in the city’s neighborhoods. Albany resides three hours from New York City, making this area opportune for buyers who travel a few times each month and who primarily work remotely.

Homes currently sit on the Albany market for a median listing price of $242,303 and offers 1,580 square feet of space. Compared to Manhattan’s median listing price of $1,690,000 for 762 square fet of space, buyers in Albany can significantly increase the size of their home without breaking the bank. Albany witnessed a higher volume of transactions throughout 2021 that decreased last year, with 3,601 closed deals.

*Photo Contribution: RealtyHop

Albany has several homes for sale across the area, ranging from older homes to newer properties with modern finishes. Buyers looking for a large home can explore this four-bedroom unit that resides on 0.23 acres of land. This unit entered the market at the end of March 2023 and has a listing price of $379,000.

Those who prefer newer homes can also find buying opportunities in Albany, such as a three-bedroom, 2.5-bath new construction property in the Park South neighborhood, listed for $364,900 plus an appliance allowance.

Dutchess County

You may already know of Dutchess County landmarks, including some of the famous grand estates, or the historic towns such as Fishkill or Poughkeepsie. In Hyde Park, you’ll find Franklin D. Roosevelt’s home and the first Presidential Library, now a national historic site, and the Culinary Institute of America. Rhinebeck, another popular town, showcases unique shops and breathtaking small-town beauty that have captivated many visitors.

Dutchess County also features natural beauty accessible through hiking trails and many stunning homes located in picturesque settings. Located halfway between Albany and New York City, prime real estate in Dutchess County ranges from about $350,000 to $725,000, with a median list price of $499,000. For example, feast your eyes on this colonial home in East Fishkill. This modern, spacious floor plan with a first-floor primary bedroom and a stunning kitchen design offers a pond view in a community with a pool and a fitness center.

*Photo Contribution: RealtyHop

Catskills Region

If you want to experience small-town life at its finest, the Catskills features both vacation homes and year-round living. If you’re looking to buy an investment property, a Catskills property can serve as a second home that generates rental income throughout the year.

Spanning across areas like Delaware, Greene, Sullivan, and Ulster counties, this well-known upstate New York area near the Catskill Mountains promises a quick getaway for skiing, hiking, or other recreational activities. For those looking to relocate, you can find homes for sale across a range of price points.

Another Ulster County find, in the historic city of Kingston, features a recently restored shingle-style mansion designed by British-American architect Calvert Vaux. The home offers dramatic river views, a screened-in porch, and pure architectural splendor. Buyers can secure the home for a purchase price of $1,500,000.

*Photo Contribution: RealtyHop

Westchester County

For those who want easier access to work, or the thriving cultural scene of New York City, Westchester County offers a more suburban feel and a generally larger inventory of homes for sale compared to other upstate locations. The population reaches just over one million, and residents can purchase a home for a median listing price of $649,000. Westchester County offers various living options, from condos to townhomes, and single-family residences.

*Photo Contribution: RealtyHop

While the median listing price in Greenburgh sits at $749,500, buyers with a higher income can purchase a four-bedroom Tudor home for $949,000. Between perennial gardens and two outdoor porches, those seeking an escape from city living will find tranquility in this abode.

Conclusion

Upstate New York witnessed a housing boom during the pandemic that continues to affect potential homebuyers today. Inventory remains low compared to the consistent demand, even despite higher interest rates. However, those who can still work from home or commute part-time can secure a larger home at a lower price point than they would in New York City. Buyers who priortize finances or space can comb through listings throughout Hudson Valley and the Catskills to find a home that works best for them.

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