The Hudson Valley of New York has gone from a dream retirement location to a housing hot spot for those leaving New York City. In Kingston, a city on the Hudson River two hours north of Manhattan, homes are being snatched up by New York City residents pining for more space.
But it’s not just retirees or middle-aged adults — first-time homebuyers, millennials and other young professionals are moving to the Hudson Valley in droves, accelerating existing trends.
“We’re getting a lot of people from Brooklyn moving here, and it’s everybody — all ages,” said Sharon Farley, an associate broker and sales manager with Murphy Realty Group in Kingston. “Before the pandemic, I would always work with the locals — I would sell the parents’ house to the kids, then to their kids, and so on. Now I’m selling to people from the city left and right, and it used to be you only dealt with a few city people each year.”
Farley said the pandemic “opened a lot of eyes” for people living in the city, who decided they wanted more space. In Kingston before the pandemic, she said, you could get a backyard, a garage for a car, and plenty of square feet for reasonable prices.
But the onset of COVID-19 changed all of that.
The housing market is extremely competitive right now. Here is a homebuyer’s guide to navigating bidding wars and low housing supply.
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“Prices are higher than they’ve ever been, and we’re getting offers $40,000 to $60,000 over asking price,” Farley said. “People want to get out of the crowded city because of the virus. And tons of customers are buying homes sight-unseen. I recently did a virtual showing over FaceTime and they put in the offer right then and there, without having physically seeing the property. It’s unreal.”
Per Realtor.com, the average asking price for homes in Kingston sits at $297,500, or $202 per square foot. That’s 32% higher than last year, but it’s a steal compared to prices in the city, where most two-bedroom apartments are four times as expensive.
“I’m selling to a lot of mid-20-somethings who are looking to get out of a big city,” Farley said.
Kingston is an ideal city for outdoors types, said Win Morrison, owner of Win Morrison Real Estate in upstate New York. Morrison cited the air quality, hiking, skiing, hunting, and fishing as the main perks. The proximity to New York City — and the abundance of public transportation that can take you there — is also a factor.
“I sell homes from the Canadian border all the way down to Manhattan, and Kingston is one of my hottest spots,” Morrison said. “At any time during the day, I’ve got people in my shops, looking in my windows at houses to buy. And on the weekend, it’s mostly people looking to move here from Brooklyn.”
Morrison has sold in Kingston since the 1980s, when homes were under $100,000, he said. Now, it’s not a surprise to see places sold for three or four times that. Inventory is low, like it is throughout the country, and that’s driving up demand. A three-bedroom, three-bath with less than 2,000 square feet could easily go for $400,000 in Kingston, he said.
“Residential is going fast out here,” he said.
Inventory in Kingston and Ulster County isn’t likely to get better anytime soon, according to local builders. The price and quality of materials has forced many builders and general contractors in Kingston to delay or outright deny requests from customers. Land is also scarce, according to one contractor based in Kingston.
“It’s extremely hard to get materials, they cost five times the normal amount, and the materials aren’t even that good,” said the contractor. “And we aren’t even sure about timetables — we just hold your hand and keep you updated. Sometimes the materials are here for us to buy, sometimes they aren’t. But it’s $30 for a box of screws, so nobody can afford anything anyway.”
The contractor said her husband recently drove 200 miles to get materials for a project, and the couple had to say no to two potential projects in the past 30 days due to material unavailability.
“It’s not that you can’t build here, it’s just there’s no space for new builds and there’s no materials,” she said.
Brian Hommel, owner of Saugerties-based Brian Hommel Home Improvement, said his company is booked until September 2022 — and most clients are fine taking the appointments that late.
“There’s so much to do and it’s hard to find qualified help,” he said. “Honestly, everyone out here should be booked up for at least six to eight weeks with how much demand there is.”
Hommel hasn’t had as much trouble as other builders getting materials, but he did acknowledge that the high prices that are making life difficult for contractors in Kingston and elsewhere.
“Pre-COVID, I could order a window on a Monday and get it two weeks later. Now, that same window might take four or five weeks to get here, and cost three times as much,” he said.
Lumber and material costs are handcuffing builders and contractors all over the country. The National Association of Home Builders estimates that the rising cost could add up to $24,000 to the price of a new build.
Hommel expressed concern that larger contracting firms like his might be left picking up the pieces when jobs are abandoned in the future by less-qualified contractors.
“I’m pretty sure the bottom is going to fall out on some of these projects, and then we’ll be called to come in after,” he said. “There’s just such a demand for work right now that there’s a big pool of people who say they are qualified, but I’m not sure where they will be after this is all over.”