{"id":40357,"date":"2025-01-20T12:26:16","date_gmt":"2025-01-20T17:26:16","guid":{"rendered":"https:\/\/www.saratoga.com\/saratogabusinessjournal\/?p=40357"},"modified":"2025-01-20T12:26:16","modified_gmt":"2025-01-20T17:26:16","slug":"economic-outlook-2025-dealing-with-the-new-normal-in-real-estate","status":"publish","type":"post","link":"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2025\/01\/economic-outlook-2025-dealing-with-the-new-normal-in-real-estate\/","title":{"rendered":"Economic Outlook 2025: Dealing With The \u201cNew Normal\u201d In Real Estate"},"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>Well, 2024 was pretty similar to 2023 in Saratoga real estate and home building&#8230; great if you\u2019re a seller, and tough if you\u2019re a buyer.<\/p>\n<p>Although mortgage rates were predicted to drop in 2024, that didn\u2019t happen. Mortgage rates were around 6.5 percent in January 2024, climbed to about 7 percent by May, briefly dropped to about 6 percent in September, and ended the year back in the 6.5 percent range. Saratoga County home prices continued to climb, because the demand is still much greater than the listing inventory.<span class=\"Apple-converted-space\">\u00a0 <\/span>Most homeowners aren\u2019t selling, due to the \u201clock-in\u201d effect; if they have a 3 percent fixed rate mortgage and current rates are over 6.5 percent they aren\u2019t selling unless necessary &#8211; and that won\u2019t change anytime soon. So, inventory was low, demand was very high, and prices continued to climb. When a new listing came on the market in 2024 we saw immediate activity, multiple offers, rapid sales, and higher prices. <span class=\"Apple-converted-space\">\u00a0 <\/span>Although the number of closed sales was lower than normal due to limited inventory, our median sale price increased nearly 6 percent in 2024, the average market time was only 11 days (historically speaking, 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 more (our historical average is 96.5 percent).<span class=\"Apple-converted-space\">\u00a0 <\/span>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>In 2024, as in past years, many potential home buyers that were frustrated in their home search turned to my new construction. As a result, every good builder and subcontractor in our region is buried with work. Our construction companies, Saratoga Construction and Saratoga Modular Homes, received a record number of new customer inquiries in 2024 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 6 percent in 2024).<span class=\"Apple-converted-space\">\u00a0 <\/span>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>So what\u2019s ahead for us in 2025 and beyond?<span class=\"Apple-converted-space\">\u00a0 <\/span>In my opinion, more of the same.<span class=\"Apple-converted-space\">\u00a0 <\/span>If mortgage rates drop below 6 percent as predicted, that will stoke even greater demand &#8211; 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 recently announced significant expansions of both Albany Nanotech and Global Foundries will bring another wave of affluent home buyers into Saratoga County.<span class=\"Apple-converted-space\">\u00a0 <\/span>As a result, demand for resale homes and new construction will continue to be \u201coff the chart\u201d. As I write this on January 2, Saratoga Construction is nearly booked for 2025, and we already have several projects in planning for 2026 &#8211; and prices are going nowhere but up. NAHB predicts overall costs to increase 6 percent-7 percent in 2024. (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 \u201cprobably not in my lifetime, certainly not in the next 10 years around here\u201d.<\/p>\n<p><span class=\"Apple-converted-space\"><span class=\"\"><b><span class=\"s1\"><span class=\"s2\"><!--more--><\/span><\/span><\/b><\/span><\/span>So as we begin 2025, we continue working in the \u201cnew normal\u201d for our region. My advice to our customers is don\u2019t be in a hurry to sell, but if you\u2019re hoping to buy 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<p>Cecil Provost has been active in Saratoga County real estate and construction since 1985.<span class=\"Apple-converted-space\">\u00a0 <\/span>He is a Graduate of the Realtor\u2019s Institute, a NYS Certified Real Estate Instructor, the Broker\/Owner of ProRealty of New York Inc., and also is the owner of Saratoga Construction LLC and Saratoga Modular Homes LLC, and a six-term Board of Directors member of the national Modular Home Builders Association.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Cecil Provost Well, 2024 was pretty similar to 2023 in Saratoga real estate and home building&#8230; great if you\u2019re a seller, and tough if you\u2019re a buyer. Although mortgage rates were predicted to drop in 2024, that didn\u2019t happen. Mortgage rates were around 6.5 percent in January 2024, climbed to about 7 percent by [&hellip;]<\/p>\n","protected":false},"author":89,"featured_media":39374,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[148],"tags":[],"class_list":["post-40357","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economic-outlook-2025"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\r\n<title>Economic Outlook 2025: Dealing With The \u201cNew Normal\u201d In Real Estate - 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\/2025\/01\/economic-outlook-2025-dealing-with-the-new-normal-in-real-estate\/\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:title\" content=\"Economic Outlook 2025: Dealing With The \u201cNew Normal\u201d In Real Estate - Saratoga Business Journal\" \/>\r\n<meta property=\"og:description\" content=\"By Cecil Provost Well, 2024 was pretty similar to 2023 in Saratoga real estate and home building&#8230; great if you\u2019re a seller, and tough if you\u2019re a buyer. Although mortgage rates were predicted to drop in 2024, that didn\u2019t happen. Mortgage rates were around 6.5 percent in January 2024, climbed to about 7 percent by [&hellip;]\" \/>\r\n<meta property=\"og:url\" content=\"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2025\/01\/economic-outlook-2025-dealing-with-the-new-normal-in-real-estate\/\" \/>\r\n<meta property=\"og:site_name\" content=\"Saratoga Business Journal\" \/>\r\n<meta property=\"article:published_time\" content=\"2025-01-20T17:26:16+00:00\" \/>\r\n<meta property=\"og:image\" content=\"https:\/\/www.saratoga.com\/saratogabusinessjournal\/wp-content\/uploads\/sites\/48\/2024\/01\/cecilprovost-v.png\" \/>\r\n\t<meta property=\"og:image:width\" content=\"432\" \/>\r\n\t<meta property=\"og:image:height\" content=\"631\" \/>\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\/2025\/01\/economic-outlook-2025-dealing-with-the-new-normal-in-real-estate\/\",\"url\":\"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2025\/01\/economic-outlook-2025-dealing-with-the-new-normal-in-real-estate\/\",\"name\":\"Economic Outlook 2025: Dealing With The \u201cNew Normal\u201d In Real Estate - 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