Have the unicorns left the building? - Let me explain....

So I have a house listed for 399,900 in the Goshen School District.  Median price point for that area, using a 6 month rolling average is 554,900.

So you can see that a home in this price range would typically gain more traffic and sell quickly because it's more affordable.  Yes, it needs a little bit of cosmetic work, but nothing major.  Someone can totally move in as it is. 

Last year this home would have accepted an offer within the first three days of listing. 

Fast forward to NOW: The house has been on the market for 15 days - with 26 showings (that’s a lot when avg. shows per listing is 6).

--- ZERO OFFERS. ( Yes, we've done our part with marketing locally and to NYC.)

We reduce the price to 385,000. Within 15 minutes of doing so we received two offers. 

BUT…hey…why didn’t those folks put in offers earlier? under asking price? 

If you've bought property before, haven’t you done that? Put in a bid below asking?

Here’s the problem: Most buyers out there have been searching for a home -  for a while.

That means, they’ve lived the life of putting in offers, above asking - only to be rejected, to be out bid by a cash offer - no inspections no questions.  They have lived in pain and can’t bear one more rejection.

That's why most buyers are shy to put in an offer below asking these days - to avoid pain.  It sounds dramatic, but it’s true. 

So, if a property is overpriced, it's taking way, way longer than the average or median days on market to sell.

In fact of the 701 single family homes currently on the market in the OC, that haven't sold, the median days on market is 64 - similar to pre-pandemic levels. The median days on market for all of 2024 for the OC was 36.

Here’s the other problem, well kind of,  if you are a seller. - The Unicorn Market has left the building.  Days on market and Inventory has grown. If you want to sell your property, the current buyer pool will dictate its value - not the fact that your neighbor's house (that wasn’t that nice) sold last year for an insane amount. Ouch!!!

Add to that…

Inflation is still sticky. It’s grown for the past 3 months.

Feds aren’t cutting interest rates anytime soon. Some think they will increase again.

Many buyers  feel unsteady with the political climate.

Affordability is a real issue.

Making sense?

Now here’s the nitty gritty of the data to back that up:

Nationally, home prices, adjusted for inflation, (real terms) sit 1.3% below the peak of 2022 and 11% above the 2006 peak.

Locally, we have a  different story.  While most of the nation peaked in terms of median sales price….we haven't. 

Traditionally our market is a slow learner....we lag behind the national trends. So it takes a little longer for our local market to reflect what’s happening nationally. 

For example when the bottom fell out of the market during the Great Recession, Nationally most folks saw this in the last quarter of 2008/ first quarter 2009.  This happened in the OC last quarter 2010/ 1st quarter 2011.

Has our market  finally peaked?  What's next for home prices?

The real estate market in Orange, Sullivan, Rockland, and Westchester Counties is shifting as we move into 2025. Key indicators such as median days on market, months of supply, and homes for sale suggest that home prices have likely peaked for this cycle. While we are not seeing a significant decline in prices yet, the data points to a cooling market with longer selling times and increasing inventory.

1. Homes Are Taking Longer to Sell

One of the biggest signals of a shifting market is the increase in median days on market. Across all four counties, homes are spending more time on the market compared to last year.

Median Days on Market Trend

Below is a chart showing how the median days on market has changed over time for a 6 month rolling average:

• Sullivan County has the longest selling time (~54 days), while Rockland County has the shortest (~27 days). Days on market has grown in each county  in comparison to January 2024.

• What this means: A rising trend in days on market suggests that buyers are becoming more selective, and sellers may need to adjust expectations on pricing.

2. Inventory is Growing, But Expected to Tighten Later This Year

The following chart shows how inventory has been increasing across most counties:

• Sullivan County has entered a buyers market with the highest inventory (~7.4 months supply), while Westchester County has the lowest (~2.4 months supply). Month’s supply in Orange, Sullivan and Rockland have grown since January 2024.

• What this means: Higher supply typically leads to softer price growth. Demand may tighten mid year, keeping prices steady or softening slightly. However an increase in interest rates will produce a slight decline.

Looking at the 6-month forecast, here’s what to expect:

1. Short-Term (Next 3 Months):

   • Prices will remain steady or see minor declines due to rising inventory and longer selling times.

   • Sellers may need to price competitively to attract buyers.

2. Mid-Year (Spring/Summer 2025):

   • Inventory will shrink, which could stabilize prices rather than push them down.

   • If interest rates drop, buyer activity may increase, helping prices hold firm. If interest rate rise, buyer activity may decrease, leading to a softening market.

3. Long-Term Outlook:

   • A balanced market is emerging, meaning buyers and sellers will need to adjust expectations.

   • Sellers should focus on pricing strategy and home presentation.

   • Buyers may have more negotiating power but should act before inventory tightens.

🏡 Final Takeaway

✅ Have Home Prices Peaked? Yes, most likely.
✅ Will They Drop? Not drastically, but softening is expected.
✅ What Should Sellers Do? Be strategic with pricing and prepare for longer selling times.
✅ What Should Buyers Do? Look for deals now before inventory shrinks later in 2025.

As always, We would love help in any way we can! Give us a call at 845-656-4498.