A common question our Lake Placid real estate office staff and agents receive recently comes from home buyers and sellers asking: “Is the homebuying competition easing?” The short answer for this question is yes, the level of urgency and competition in Adirondack region home transactions are easing. If homes are priced correctly and in a desired neighborhood there is still some competition, but it is not at the level that was seen during the pandemic.
During the pandemic, the low housing supply especially with lakefront homes, combined with reduced interest rates for home mortgages provided a storm of offers for many homes on the market. This created a real estate market environment with constant competition and a rush to buy – especially in less populated and rural areas like the Adirondack mountains. “On the ground” in Lake Placid, now that life has gone back to how it was before the pandemic, coupled with an increase in interest rates from the Federal Reserve, we have noticed properties staying on the market longer. There have also been fewer offers on homes for sale in and around the area.
Higher Mortgage Interest Rates And Home Prices
During the pandemic, the Federal Reserve lowered the interest rates to 2.5-4%. This is one of the lowest rates in history. With this rate, home buyers could borrow more money to buy homes since they could afford the lower monthly payments. Recently, the Federal Reserve has increased interest rates to almost double, ranging from 6.8-8%.
Competition for homes is also slightly lower because coupled with higher interest rates, Lake Placid prices have increased on single family homes and only some have lowered prices with the pandemic settling down. With these monthly payment increases, many buyers have taken a step back and are waiting to see what the market will do.
In a recent (September 2022) report by the National Association of Realtors, NAR stated every house listed in their existing homes sales data averaged 2.5 offers in the late summer of this year, what is down from the high of 5.5 offers per listing in April of 2022.
In the ADK Lake Placid region, we have discovered the higher interest rates have slightly reduced the number of buyers, leading to fewer offers on properties. Also, during the height of the market we worked with many buyers who were making offers with little or no pre-sale contingencies. Now, buyers are asking for more contingencies with the market being less competitive and urgent, time wise. As stated above, certain properties that are currently priced right in certain areas are still receiving multiple offers with less contingencies.
What This Means For Home Buyers And Sellers
While the information above may lead you to believe that the Lake Placid region is starting to turn toward a buyer’s market, we feel the area is still in a seller’s market. Our office is working consistently with new buyers looking to purchase homes in our region, but the low inventory has provided few options for what they are looking for. They have just become more patient looking to find the perfect property for their desired Lake Placid and Adirondack lifestyle goals.