By Nora Mercier
Regardless of the weather, this time of the year brings many home buyers out, in anticipation of settling into a new home some time in the spring or early summer. It takes, on average, about 60 days to close on a house from the time of a purchase offer.
Both buyers and sellers often ask “what the market is like” in our area. For the six months prior to January 31, there were 59 sales in Rhinebeck, and the average sale price was $339,450. In Red Hook, there were 32 sales, and the average sale price was $307,433. Keep in mind that this is just an average; it does not take into consideration differences in lot size, style of house or amenities (such as pools and central air conditioning).
In both towns, homes have sold at an average of 96 percent of the asking price, so prices have become much more realistic than in the past; it is not necessarily just a “buyers’ market” anymore.
Another factor that comes into play when purchasing a home is interest rates. According to Wells Fargo N.A., a 30-year fixed rate for a standard mortgage loan is 4.5 percent, and 4.25 percent for a FHA loan. The 15-year fixed rate is 3.625 percent, and 5-year ARM (Adjustable Rate Mortgage) is 3.25 percent. The expectation of market strategists is for rates to rise, which will negatively affect a buyer’s purchasing power, since it will “cost more” to borrow the money. When that will actually happen is an unknown, because mortgage rates are tied to the bond market as well as other economic factors. Sellers should keep this in mind, also, when pricing their homes.
Buyers in the town of Red Hook have something else to consider: the Red Hook Community Preservation Act Transfer Tax. What this means is that anyone purchasing a home in Red Hook may also have to pay this preservation tax. The tax only affects purchase prices above the “median price,” which is currently $260,000. The buyer of the home will pay 2 percent of the difference between the purchase price and $260,000. For instance, for a purchase price of $300,000, the tax would be $800 ($300,000-$260,000 = $40,000 x 2% =$800.). Please note that this only affects the town of Red Hook, not, for instance, the town of Clermont in the Red Hook School District.
This is a great time for both buyers and sellers: for sellers, potential buyers will be looking to be settled in their new homes as soon as the weather improves. For buyers, interest rates are extremely favorable still, but may not be for much longer. Furthermore, prices of homes have stabilized.
Nora Mercier is a Licensed Real Estate Sales Asssociate at Paul Hallenbeck Real Estate, Inc. in Rhinebeck. She can be reached at 845-216-4397 or email@example.com.