In the words of a veteran Realtor: “COVID has made ‘home’ more important than it ever was.”
This, and the circumstances surrounding COVID, have lit a fire under the Capital Region housing market, where houses are selling much more quickly and for much more money than before the pandemic.
“Selling was kind of a crazy experience,” said Emily Paulsen, formerly of Delmar. “We actually had people driving past our house 30 minutes after it was listed.” The money in the eventual sale deal was great but the stress was high.
As it turned out, buying the trade-up house in Guilderland would prove every bit as harrowing for Paulsen and her husband.
Their experiences are likely among the more extreme anecdotes in the local real estate industry, but they are far from alone.
Many but not all sales in the Capital Region are made through the Global Multiple Listing Service run by the Greater Capital Association of Realtors. As such, the MLS data provide a good snapshot of market activity across the area.
Comparing the first four months of 2021 and the first four months of 2019:
- The number of houses newly listed for sale dropped 18.5% to 4,925;
- Closed sales jumped 27.1% to 3,981;
- The average number of days on the market dropped 31.5% to 50;
- Average percentage of original asking price paid increased from 95.4% to 97.1%.
- Median price paid increased 15.6% to $237,000.
The numbers are a classic illustration of free-market economics: Decreased supply and increased demand drives up the sale price and prompts quicker sales.
Here are the experiences and observations of several buyers, sellers and Realtors:
Danielle Dodway of Rotterdam began looking for a new place to live in February. It could have been a rental or a purchase, she said, but it needed to have a fenced yard for her two dogs and a dedicated room for the rescue puppies she fosters. She also has a cat.
This all made a rental very hard to find.
But the hot market made purchasing very hard, too.
“I put at least four offers in on houses, got turned down for all of them, it was very disheartening,” she said. “Oh my God, there was so much competition. There were houses that would literally be off the market 24 hours later.”
Dodway worked with Chelsea Rattner, a buyer’s agent at Keller Williams Realty in Latham, and said Rattner was able to give her the rapid turnaround that eventually landed her the house that will become hers late this month.
Dodway had started electronic alerts with Zillow and got a message that a previous sale had fallen through on a Rotterdam house that fit her needs, and it would be going back on the market.
“Chelsea being awesome, she called [the seller’s agent] right away,” Dodway said. Rattner took a look and told Dodway she’d love it. “I said, ‘Chelsea, let’s move on this right away.”
Dodway had to go above the asking price, which she expected, and she had to settle for a septic tank rather than the sewer line hookup she wanted. But the physical flaws that caused the previous would-be buyer to back out didn’t seem too big to her.
“It really was for the best because this house is perfect for me,” Dodway said.
Robert Szymczak of Glenville spent months preparing to sell his late father’s house but the actual sale itself took only three days to button up.
Back in September, he consulted Marion DeSantis, who heads the team that Rattner is part of at Keller Williams, and she gave him a list of things that people would want to see in the house in the current market.
It’s quite an unusual property, secluded down a thousand-foot driveway on nine acres in the dense suburbs of East Glenville, and the house had been overbuilt by his father, who was a homebuilder.
But it was also a bit dated inside and needed touchups, having been rented out in the decade since his father’s death.
“We got along really well and she gave me advice,” Szymczak. “I just followed everything she said.”
New appliances, new paint and a new roof were installed in the following months. He used the contractors DeSantis recommended.
“I’m a dentist but I know about homebuilding and they did a great job,” Szymczak said. There aren’t “enough hours in a day that I could have done all that myself.”
His asking price was $449,000, and the first offer was $15,000 higher. Subsequent offers were even higher, but the first bidder upped their offer and the deal was struck.
“The buyer has to feel really happy and satisfied and the seller has to feel really happy and satisfied,” said Szymczak.
And he does.
DeSantis is a veteran Realtor with 28 years in Capital Region real estate sales. The “team” in the “Marion DeSantis Team” is more than a marketing slogan, it’s a literal description of the approach she takes to helping clients buy and sell houses.
There are many elements that go into a successful transaction — photography, staging, practical repairs, cosmetic updates, marketing, financing approval, inspections and more. It becomes almost a choreography, and if the timing or execution of one element is off, the sale can be delayed or spiked, or the market appeal may be diminished.
A house debuts on the market just once, DeSantis said, and it’s hard to recapture the initial attention and excitement if that debut is flubbed.
“It can make a dramatic difference in the price you get,” she said. “Selling a home is more complicated than it’s ever been.”
Realtors have always discouraged owners from trying to sell their houses themselves, and it’s especially not a good idea now, DeSantis said.
If the house is priced reasonably and there aren’t fatal flaws, owners will be able to sell it on their own, she said. But she predicted that the higher price a Realtor could land would more than cover the cost of the Realtor’s commission. A seller’s agent also will flag the potentially expensive details that an owner might miss in the details of a buyer’s purchase offer and will recommend the details be removed or the offer rejected.
As for the market itself, DeSantis said it’s a remarkable time, with demand far outstripping supply amid a unique period of recent history that has made people more willing to invest in the places they live if they have the means to do so.
In the time of COVID, the home also has become the surrogate office, gym, school and restaurant, she said.
“COVID has made ‘home’ more important than it ever was,” DeSantis said.
She doesn’t think there will be widespread buyer’s remorse, even if the market softens. Unlike the mid-2000s, mortgages are not being given out freely to virtually anyone who asks, she said. Those paying top dollar for houses today have the income to qualify for the loan and make the payments.
Emily Paulsen and Matt O’Brien experienced many of the things that can go right and wrong in an overheated housing market.
In one short period, the couple:
- Got an offer less than three hours after listing their Delmar home;
- Spent two nights in a hotel while two dozen prospective buyers trooped through the house;
- Accepted the highest offer — $40,000 over their $300,000 asking price;
- Had the buyers — an out-of-state couple who’d never seen the place in person before committing to buy it — pitch a tantrum over small details during the walk-through and demand changes that weren’t in the sale contract;
- Found the trade-up house they’d want to spend most of the rest of their lives in, and had their offer accepted;
- Had the bank reject the agreed-on price as too far above the appraised value;
- Scrambled to find another house but not settle on just anything to avoid becoming homeless;
- Almost dismissed a house in Guilderland that looked terrible in photos, then took a look at their agent’s urging and loved it;
- Had little competition because the house was poorly marketed, and saw their offer accepted;
- Got almost to closing and learned the current occupants intended to stay there until their new home was ready.
“It was a nightmare,” Paulsen said — a stressful process made worse on both ends by the other side trying to skirt the terms agreed on in the sale and purchase contracts.
But their Realtor wouldn’t let the other side deviate from the terms of either contract.
“We really learned the value of having a really good team,” she said.
Paulsen and O’Brien closed on the purchase of the Guilderland house in early May and closed on the sale of the Delmar house a week later.
Paulsen and O’Brien were represented in both transactions by Dona Frank-Federico and Laura Murphy, a member of Frank-Federico’s team at Select Sotheby’s in Saratoga Springs.
Frank-Federico said the couple’s experience was more convoluted and stressful than normal, even amid the high-tempo market over the past year.
With the near-shutdown of the industry in March and April 2020 and continued restrictions in May, she thought sales were done for the year. “But it was the opposite — all the things you think wouldn’t happen, would happen.”
She had buyers from New York City, Iowa, California. She had local people who wanted to borrow at low rates to stop renting and start owning. She had people who wanted more and better living space because they were spending so much time at home.
“It was like the perfect storm and it took us by surprise in the beginning,” she said.
“But we did it. I had my best year ever in real estate and it was bittersweet because a lot of my family didn’t have jobs.”
She also lost friends to the virus.
“It was a lot, and it was emotional,” she said.
Some takeaways for Frank-Federico:
- Houses with pools sell very quickly if priced reasonably;
- Houses without high-speed internet service are a very tough sale, regardless of price;
- Some of the people who decided to leave New York City, epicenter of the pandemic, just packed up and left, and stayed in an Airbnb until they could buy a house;
- Luxury houses haven’t had as much sales growth because the people buying them often have multiple residences and don’t feel pressure to buy immediately;
- Open space around the house is a big selling point;
- Saratoga Springs retains its appeal.
Frank-Federico also feels that the upward pressure on prices can’t sustain itself forever.
“I personally believe there’s going to be a bit of a remorse around when it comes time to sell,” she said
Along with all the buyers and sellers who find success in the market scrum, like the ones mentioned so far in this story, others are finding homeownership a dream deferred because of prices and competition.
Chris and Dikla Beasley of Halfmoon are in this latter category, skunked in one attempt after another to buy their first house.
It doesn’t help that they’re looking to stay in the Shenendehowa school district, which contains some of the most expensive housing in the Capital Region. Also, they simply don’t have the ability to make a large down payment or cash purchase.
“The market is a sellers’ market,” Dikla said. “And unfortunately, us as a family trying to live the American Dream, it’s been really hard — we’ve been outbid so many times.”
Chris added: “You almost have to play a game, offer $40,000, $50,000 more than the listed price.
“Have we been discouraged? Yes. But we haven’t given up. We’re trying to hang in there and have hope but we’re not feeling too good about it because the market is crazy right now.”
The couple — she’s Puerto Rican, he’s Black — feel that at least one seller’s questions about their offer might have revealed some bias. But otherwise, they don’t see discrimination at play. The color that matters is green: Money.
“I sometimes wonder, where’s the cap, where’s the control?” Chris said. “Where’s the cap where the average middle-class person can’t afford it?”
The couple takes a dim view of the competition in which bidders resubmit their offers and up their price.
“I think they’re playing buyers,” Dikla said. “I think some of these houses aren’t worth what they’re going for.”
For the four years Chelsea Rattner has been part of the Marion DeSantis Team at Keller Williams, she’s been a buyer’s agent almost exclusively, including for the Beasleys.
With the market surging, she faces a set of challenges just as daunting as the ones DeSantis described for sellers, only from the opposite side.
“I’ve been very transparent with my buyers about what to expect,” Rattner said.
She’ll suggest buyers look at houses listed for $20,000 or even $30,000 less than they are approved to borrow so they have the room to make a higher offer.
“We got lucky with Danielle” Dodway, Rattner said — good timing, persistence and the ability and willingness to move quickly.
The stars haven’t lined up for the Beasleys yet, but Rattner isn’t giving up. (And neither are the Beasleys — they were setting out to see several more houses this past weekend with Rattner.)
“Unfortunately, they’re competing with cash buyers,” Rattner said of the Beasleys.
The couple has looked at places they could afford in outlying areas such as Galway but decided the time and cost of commuting wouldn’t be worth the savings on the house.
Instead, Rattner said, they’re starting to look at houses that have languished on the market longer, places that need repairs or updates but are livable as is. The couple will need to make the fixes on their own rather than having the seller pay for them. But they’ll be buying equity and a future rather than paying month-to-month for a place to live.
“You have this collision of all the elements causing a very good sellers’ market,” Rattner said. “I’m really hopeful with the Beasleys we’ll be able to get something on the table.”