Properties selling countywide quicker at higher prices
The economic impacts of COVID-19 do not appear to have hit the Chautauqua County real estate market in an unfavorable way.
Brokers and agents in the area were forced to make quick shifts to online communication and digital technology in the wake of public health mandates for social distancing, but that transition has not necessarily translated to a decline in business.
“If you would have asked me before this started, I would have expected real estate sales to really slow dramatically, and it didn’t. I kept waiting for it to slow and it hasn’t,” said Steve Holt, owner of Howard Hanna Holt Real Estate. “We are up 20% in sales over last year, and last year was our best year ever. There is a true lack of inventory. There was before COVID and it seems like the inventory has even dropped more since COVID. I’m not sure if it was because of COVID or if it was already headed in that direction. I’m sure COVID didn’t help the inventory situation.”
According to Upstate New York Real Estate Information Systems June report for Chautauqua County, there has been a 31.7% decrease in inventory of homes for sale in June this year, a drop from 578 in 2019 to 395 in 2020.
Year-to-date data shows a 10% increase in median sales price, up from $90,000 to $99,750, and a 4% increase in average sales price.
The year-to-date days on market index has also decreased 15.7%, with homes averaging 83 days before sale in 2019 and 70 so far in 2020.
Holt Real Estate operates three offices in Chautauqua County, employing 32 agents and brokers based in Lakewood, Mayville and Fredonia.
When COVID-19 first began to affect real estate transactions and associated industries such as construction, financing and permits, Holt was well-positioned to handle social distancing requirements.
“As a company we had implemented a lot of technology before COVID. Not planning on COVID, just planning on being able to provide our customers with more technology,” Holt said. “That was great for us and great for our customers. When everyone had to work remotely we had all the tools to do it, where a lot of other companies kind of had to scramble to figure out what they were going to do and how to handle it.”
Even with unprecedented public health restrictions and huge economic dislocation during the pandemic, sales for Holt have remained strong.
A combination of factors have helped keep real estate transactions moving along, starting with low interest rates and increased free time for homebuyers and owners.
“Our market has definitely gotten stronger over the last three or four years, but we’re in a situation now with the low inventory where we are seeing multiple offers, we’re seeing people paying above the asking price. It has gotten to be a normal situation,” Holt said. “People are less afraid to pay a little bit more because interest rates are so low right now. I think part of the recent demand has been, people have spent three months in their homes, and found all of the shortcomings of their existing homes.”
Holt and his staff handle both residential and commercial real estate, although homes and residential properties make up the bulk of business in the county.
With a significant percentage of the area’s workforce switching from regular office hours to working remotely, many homeowners have used the time to improve their properties and review living situations.
“I can’t tell you the number of calls we’ve gotten about, what are repairs that we can do to our home that will make it more valuable?” Holt said.
It may take more time to draw conclusions about the impact to commercial real estate markets, as businesses like restaurants and retail stores continue to deal with COVID-19 fallout in the months to come.
“I do expect that there will be more commercial properties that will be coming up for sale as a result of COVID,” Holt said. “Businesses that closed, I think long-term people are going to be looking differently at office space.”
In addition to possible restaurant and business closures, COVID-19 has also forced many businesses to reassess paying for office space if employees are able to work from home. It remains to be seen how widespread and long-lasting that change in thinking may be at a local and national level.
Aiding the resilience of real estate in the last several months has been the response at the county level.
“I think that the county clerks office did an amazing job closing, recording transactions with limited staff,” Holt said. “They implemented new technology to allow for electronic closings. I give them a ton of credit because none of that existed before COVID. All of a sudden, in a matter of weeks, they were on board with that. It was a little bit slower than they normally operate, but the thing was they were at least still functioning.”
DEMAND ALSO HIGH FOR SMALLER AGENCIES
Alan Shaw, owner of Northern Chautauqua Realty, has followed similar changes in supply and demand.
“Springtime is always the time when most people think to list their homes for sale. March, April, May, those are the months that typically people are listing and inventories are growing,” Shaw said. “What I’m seeing is that the homes that are available are selling, and if you are getting a new one here and there they tend to sell relatively quickly, again, provided they are priced right and are something that is desirable.”
Shaw explained that due to COVID-19 restrictions, listing and showing new homes was difficult or impossible during the New York on PAUSE initiative.
During that time, prospective homebuyers continued to look for properties on the market, keeping demand high.
“When they shut us down back in March for the next two-three months, people were not listing their homes for sale,” Shaw said. “As a result, I’m sure, everyone’s inventories dropped substantially or did not grow as a result. Once they opened up the real estate market to us somewhat with all of the restrictions they have on us, we’re able to at least start to show the properties that we do have for sale. So you’ve got a smaller supply but the demand is still there, and people are anxious to buy their home, they have been sitting and waiting.”
Attractive interest rates have also help to buoy demand for homebuyers.
“The supply is down, the demand is greater at the moment. Interest rates are phenomenal, it makes you want to buy something even if you don’t need it just so you can borrow the money,” Shaw said.