How the coronavirus created a historic housing market in Syracuse
The coronavirus pandemic and economic shutdown have created in the Syracuse, N.Y., area the hottest housing market in recent history, agents say.
Buyers are lining up down the street to get into showings. They are offering amounts so high over listing prices, they risk rejection from bank appraisers. Buyers waive inspections. They offer cash to avoid any contingencies.
And houses are selling within days.
The median sale price in May for the Central New York region was $152,000 -- 9.4% higher than last May.
"It's a little crazy right now," said McKenzie Kelly, an agent for Howard Hanna Real Estate.
There have been more buyers than sellers in the Syracuse market for about a year. But the coronavirus has exaggerated the situation, she said.
People who have been stuck inside their homes are ready to trade up for something new and different. Some renters, especially young people, are done handing over checks to landlords and see historically low interest rates as a time to buy. They can afford more house for the same monthly payment with interest rates on a 30-year fixed mortgage at just over 3%.
But potential sellers are holding off.
They are afraid they won't be able to find another house in his market, Kelly said.
New listings are down 33.6% so far this year over last year. There were just 956 new listings in May, compared to 1,568 homes listed in May 2019, according to the Greater Syracuse Association of Realtors.
The people choosing to sell now really need out. They're getting a divorce, combining families, someone has died or they are moving out of the area, agents say.
It has been part of Mary and Tom Sacco's life plan to retire to Pennsylvania to be near their daughter. They had planned to put their Jamesville house on the market in March.
They are over age 65 and worried about having strangers touching the railings and resting their hands on the kitchen counters. They held off for about two months, then called Kelly.
"We're going to jump in the deep end," Mary Sacco said she told her agent.
About 20 people came through the house over two days in May while the Saccos sat in their neighbor's yard and in their car. They had nowhere to go. One advantage: They could see that people were wearing masks and using hand sanitizer on the way in.
Within days, they had about eight offers. Kelly told them to expect offers to come in over the asking price, but they didn't believe her. They've lived in the Syracuse area for 40 years.
"That's just not normal," Sacco said. "Usually you have two or three houses you like, and you decide which one you want to give asking price or you try to give a little less."
The offer they accepted was a big jump over the asking price, Sacco said. She was reluctant to share the numbers because the sale has not yet closed.
Now, they switch to the role of buyers in Pennsylvania, which is experiencing the same kind of market. They've already looked at 24 homes and been rejected twice. On one lost house, they had offered $20,000 over the asking price and offered another $3,000 over the best asking price.
"It's a nightmare," she said. "We've been down six times."
Despite all that activity, the real estate market is struggling to catch up to pre-pandemic sales volume.
The number of closed sales in May was down 33.8% over last May, from 807 to 534.
But because of robust sales in the first part of the year, closed sales are only 10.2% behind this same time last year.
Lynnore Fetyko, chief executive officer of the Syracuse-area association, said she is optimistic that the industry can catch up before the end of the year if the economy continues to reopen and infection rates are low. The challenge is to bring more houses on the market.
"One of the challenges that we have is trying to communicate to the seller that we have methods to make this all happen safely," she said.
The industry was among the first to reopen with precautions. Agents quickly learned to use 3D photography for their websites and to conduct virtual open houses by phone video. Buyers are getting used to touring houses from the comfort of their own homes, she said.
"The economy needs the housing market to make a strong recovery and we want to do our best to make sure everyone involved knows that we can do this safely," she said.