{"id":39373,"date":"2024-01-22T17:16:49","date_gmt":"2024-01-22T22:16:49","guid":{"rendered":"https:\/\/www.saratoga.com\/saratogabusinessjournal\/?p=39373"},"modified":"2024-01-23T14:49:21","modified_gmt":"2024-01-23T19:49:21","slug":"saratoga-county-will-continue-to-experience-a-tight-real-estate-market-with-higher-prices","status":"publish","type":"post","link":"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2024\/01\/saratoga-county-will-continue-to-experience-a-tight-real-estate-market-with-higher-prices\/","title":{"rendered":"Saratoga County Will Continue To Experience A Tight Real Estate Market With Higher Prices"},"content":{"rendered":"<figure id=\"attachment_39374\" aria-describedby=\"caption-attachment-39374\" style=\"width: 205px\" class=\"wp-caption alignleft\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-39374\" src=\"https:\/\/www.saratoga.com\/saratogabusinessjournal\/wp-content\/uploads\/sites\/48\/2024\/01\/cecilprovost-v-205x300.png\" alt=\"\" width=\"205\" height=\"300\" srcset=\"https:\/\/www.saratoga.com\/saratogabusinessjournal\/wp-content\/uploads\/sites\/48\/2024\/01\/cecilprovost-v-205x300.png 205w, https:\/\/www.saratoga.com\/saratogabusinessjournal\/wp-content\/uploads\/sites\/48\/2024\/01\/cecilprovost-v.png 432w\" sizes=\"auto, (max-width: 205px) 100vw, 205px\" \/><figcaption id=\"caption-attachment-39374\" class=\"wp-caption-text\">Cecil Provost, is the owner of Saratoga Construction and Saratoga Modular Homes.<\/figcaption><\/figure>\n<p>By Cecil Provost<\/p>\n<p>2023 was another \u201cinteresting\u201d year in Saratoga real estate and home building&#8230; but we haven\u2019t had a \u201cnormal\u201d year in quite some time, have we?<\/p>\n<p>In local residential real estate, although interest rates and prices both jumped, the demand continued to exceed the listing inventory in 2023. Homeowners with 3 percent fixed rate mortgages aren\u2019t selling unless necessary (and that won\u2019t change anytime soon). So, when a new listing hit the hotsheet in 2023 we saw immediate activity, multiple offers, rapid sales, and higher prices.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>Although the number of closed sales was relatively low due to limited inventory, our median sale price increased nearly 10 percent in 2023, the average market time was only 24 days (in my experience 90 days is \u201cnormal\u201d in our area, and I\u2019ve seen it as high as 130 days), and most sellers got full price or better (our historical average is 96.5 percent). In a \u201cnormal\u201d year the higher prices and interest rates would have made selling a home more difficult, but demand is so overwhelming in our area that the only listings that don\u2019t sell in 45 days are the ones that are grossly overpriced.<\/p>\n<p>As a result, many potential home buyers turned to my new construction.<span class=\"Apple-converted-space\">\u00a0 <\/span>Every good builder and subcontractor in our region is buried with work. Our company, Saratoga Construction, received an unprecedented number of new customer inquiries in 2023 (well over 100 per month), and shattered our previous records for both number of home sales and total sales volume, despite much higher construction prices and interest rates. (Construction costs were up about 10 percent in 2023). Thankfully, most of the supply chain issues that we experienced during the pandemic have been resolved, but there\u2019s still a huge shortage of skilled workers in our area.<\/p>\n<p><span class=\"Apple-converted-space\"><span class=\"\"><b><span class=\"s1\"><span class=\"s2\"><!--more--><\/span><\/span><\/b><\/span><\/span>So what\u2019s ahead for us in 2024 and beyond?<span class=\"Apple-converted-space\">\u00a0 <\/span>In my opinion, these trends will continue for several years. The National Association of Realtors and the National Association of Home Builders both predict 30-year mortgage rates will retreat to something like 6.25 percent in mid-late 2024, which will stoke even greater demand. That\u2019s better than the 7.75 percent peak that we saw in 2023, but probably won\u2019t convince most homeowners sitting on a 3 percent mortgage to sell, so resale inventory will remain tight and bidding wars\/price escalation will continue. The coming expansions of both Albany Nanotech and Global Foundries will bring another wave of affluent home buyers into Saratoga County. As a result, demand for resale homes and new construction will continue to be \u201coff the charts.\u201d<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>As I write this on January 10th, Saratoga Construction is nearly booked for 2024 and we have several projects in planning for 2025. We\u2019re now receiving price increase announcements from our material suppliers for 2024. Lumber prices seem to have stabilized but siding, drywall, insulation, roofing, concrete, cabinetry, wire, pipe, etc., are all going up 5 percent-10 percent in Q1. NAHB predicts overall costs to increase 6 percent-7 percent in 2024. (The historical average is 3 percent-4 percent per year). Customers are always asking me if\/when I think the construction costs will come back down, and my response is \u201cI don\u2019t see that happening, unless the whole world blows up\u201d.<\/p>\n<p>Affordability continues to be a huge challenge, especially for first-time buyers. I have three children ages 15-21, and if I wasn\u2019t able to help them out as a Realtor and builder I don\u2019t know how they could afford to buy a home or live here after college. Our region is experiencing (and will continue to experience) many of the same challenges as Boston MA, Austin TX, San Jose CA, and other areas where the economy suddenly booms with high-tech jobs. I founded our sister company, Saratoga Modular Homes, in 2008 so that we could offer quality-built homes at affordable prices because as a former software engineer I knew what was coming when it was announced that AMD was coming to Luther Forest. Saratoga Construction now offers all types of home construction (traditional stick-frame, modular, panelized, log and timber, SIP panel), but all of those costs have risen dramatically. I\u2019m hoping that our local and state government leaders will develop some creative programs to stimulate affordable housing development.<\/p>\n<p>So as we begin 2024, welcome to the \u201cnew normal\u201d in our region. My advice to our customers is don\u2019t be in a hurry to sell, but if you\u2019re going to be a buyer then sooner is better than later. Prices are going to continue climbing, inventory is going to remain tight, and housing demand is going to outpace supply locally for years to come.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Cecil Provost 2023 was another \u201cinteresting\u201d year in Saratoga real estate and home building&#8230; but we haven\u2019t had a \u201cnormal\u201d year in quite some time, have we? In local residential real estate, although interest rates and prices both jumped, the demand continued to exceed the listing inventory in 2023. Homeowners with 3 percent fixed [&hellip;]<\/p>\n","protected":false},"author":89,"featured_media":39412,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[147],"tags":[],"class_list":["post-39373","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economic-outlook-2024"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\r\n<title>Saratoga County Will Continue To Experience A Tight Real Estate Market With Higher Prices - Saratoga Business Journal<\/title>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2024\/01\/saratoga-county-will-continue-to-experience-a-tight-real-estate-market-with-higher-prices\/\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:title\" content=\"Saratoga County Will Continue To Experience A Tight Real Estate Market With Higher Prices - Saratoga Business Journal\" \/>\r\n<meta property=\"og:description\" content=\"By Cecil Provost 2023 was another \u201cinteresting\u201d year in Saratoga real estate and home building&#8230; but we haven\u2019t had a \u201cnormal\u201d year in quite some time, have we? In local residential real estate, although interest rates and prices both jumped, the demand continued to exceed the listing inventory in 2023. Homeowners with 3 percent fixed [&hellip;]\" \/>\r\n<meta property=\"og:url\" content=\"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2024\/01\/saratoga-county-will-continue-to-experience-a-tight-real-estate-market-with-higher-prices\/\" \/>\r\n<meta property=\"og:site_name\" content=\"Saratoga Business Journal\" \/>\r\n<meta property=\"article:published_time\" content=\"2024-01-22T22:16:49+00:00\" \/>\r\n<meta property=\"article:modified_time\" content=\"2024-01-23T19:49:21+00:00\" \/>\r\n<meta property=\"og:image\" content=\"https:\/\/www.saratoga.com\/saratogabusinessjournal\/wp-content\/uploads\/sites\/48\/2024\/01\/provost-fi.png\" \/>\r\n\t<meta property=\"og:image:width\" content=\"960\" \/>\r\n\t<meta property=\"og:image:height\" content=\"630\" \/>\r\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\r\n<meta name=\"author\" content=\"Jake Van Ness\" \/>\r\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\r\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Jake Van Ness\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\r\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2024\/01\/saratoga-county-will-continue-to-experience-a-tight-real-estate-market-with-higher-prices\/\",\"url\":\"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2024\/01\/saratoga-county-will-continue-to-experience-a-tight-real-estate-market-with-higher-prices\/\",\"name\":\"Saratoga County Will Continue To Experience A Tight Real Estate Market With Higher Prices - 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