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A ripe market: Predicted rise in buyer activity brightens hope for area real estate
(Times Union (Albany, NY) (KRT) Via Acquire Media NewsEdge) Jun. 22--While no one is predicting the Capital Region real estate market will soon return to its record-setting pace of a few years ago, area real estate experts and regional economists project that the stability of the area's economy coupled with its stature as the state capital bode well for increased sales activity later this year.
And as the calendar officially turns from spring to summer, there are signs that an upswing in buyer activity may already be under way.
"We have seen some increased activity with the spring market, and it has created a number of multiple offers and a few homes have sold in 48 hours," said Tracy Metzger of T.L. Metzger Associates, a Loudonville real estate firm. "I've talked to other agents from different companies who tell me they also have been seeing multiple offers, which is a very good sign.
"In the past month or so I have a sense that buyers are starting to feel more confidence."
The big dip
It wasn't that long ago that homes in the Capital Region sold as fast as homeowners could put up for-sale signs. The area's housing market basked in a run of eight consecutive record-setting years until July 2006, when sales plummeted 15 percent, the biggest one-month dip that year and fourth straight month of decline.
But as the number of sales have fallen off, median selling prices of Capital Region homes have remained flat or even risen slightly, defying expectations and trends in other areas of the nation.
The latest figures reported by the Greater Capital Association of Realtors show that 2,190 homes have sold in the area during the first four months of 2008, a 19 percent drop in sales, compared to the same period in 2007. But despite the significant decrease in volume, the median selling price of $189,000 in the first four months was up slightly from $185,600 in the same period last year.
In places like California and Florida, where for years homes sold at inflated prices amid unabated demand, the current price correction is vastly more severe than anything being experienced in the Albany area.
"The big reason Albany hasn't been badly hurt by the housing correction is that the run up to it has been pretty mild," said Marisa DiNatale, an economist who follows upstate New York for the West Chester, Pa.-based economic research firm Moody's Economy.com. "It's a pretty tight market. The supply and demand is well balanced and has been for many years."
Metzger, who has operated her residential and commercial real estate company for seven years, said if anything, area homes should sell for more.
"Our real estate is still undervalued, so we are just playing catch-up, since we did not have the overvalued situation other markets had," she said. "That's the reason there is no significant downturn in prices."
Insulated capital
Commenting on the future health of the Capital Region market, DiNatale said capital city areas tend to do well during economic downturns and even seem insulated to some degree. She also said the area's strong university and technology sectors help keep unemployment low and contribute to a steady economy.
DiNatale singled out plans for Advanced Micro Devices Inc. to build a $3.2 billion computer chip factory at Luther Forest Campus in Malta as a project that could have far-reaching benefits for the real estate market and the economy.
"If it comes to fruition, it has potential to be the biggest thing mid-term and long-term," she said. "It would be huge, not just for jobs but because it will attract a lot of spring-off companies."
AMD, which has been struggling financially and lost $3.4 billion last year, has yet to officially commit to the project. It has until July 2009 to begin construction. The company is currently getting the necessary town and state regulatory approvals for the construction of a 890,000-square-foot factory, and it is hoping to get a building permit in place so it can begin construction as early as January, if it decides to move forward.
The plant would employ 1,465 people, many of them engineers and managers with high-paying jobs, and it would also create thousands of construction and service jobs in the region.
Looking ahead
Meanwhile, Jim Ader, executive director of the Greater Capital Association of Realtors, said he expects the market to become more active later this year, though he's not discouraged by the current situation.
"We think it will continue to be a good market and it's not a bad market right now," Ader said. "It's just not anything like it was a couple years ago when we were cruising along at high speed.
"I don't have a crystal ball, but would expect more activity in the third and fourth quarter."
Bob Blackman, vice president of development for Realty USA in Clifton Park, said, like all business, the real estate industry is riding out a difficult economic climate.
"There are outside factors right now," he said. "People are psyched out with the gas price and food prices. There's a presidential election in the fall. For right now, consumers' knees are shakier.
"I don't think it will be like turning on a light switch to go from today's pace to fast acceleration. I'd look for the market to show gradual improvement."
Dan Howley can be reached at 454-5321 or by e-mail at dhowley@timesunion.com.
Tips to sell
Here are four tips to help sellers, provided by Lorraine Denham, a Chicago-base Realtor who has her own television show to educate buyers, sellers and investors in residential real estate:
Declutter: Streamline everywhere. Keep collections simple. Remove bulk from closets, surfaces.
Out with old: Update what matters, appliances, surfaces, fixtures in baths and kitchen.
Price right: Do your homework. Know what has sold in your building, block, neighborhood and set a price to get volumes of buyers in.
Diversify: You must market everywhere, casting a wide net to find buyers from the Internet, newspapers, neighborhood, open houses, signs and giveaways.
For more information to go http://www.lorraineschicago.com
To see more of the Albany Times Union, or to subscribe to the newspaper, go to http://www.timesunion.com.
Copyright (c) 2008, Albany Times Union, N.Y.
Distributed by McClatchy-Tribune Information Services.
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