When researching an area where you plan to live, it’s wise to investigate what is happening locally and nationally because it can impact the value of your property. There are many trends that could affect the value of your property, such as new rules and regulations, quality of life or interest rates. Real estate is an ever-evolving space where minor changes can have major effects on property values.
In the Adirondacks, there have been only minor changes in the real estate market due to being a resort area with a high population of tourists and visitors. However, any significant event in the city areas can bring a larger influx of buyers to our communities, as seen after the 9/11 attack in New York City and at the beginning of the Covid-19 pandemic. Both resulted in a large influx of buyers looking to escape the crowded city life to a more spacious and free rural life. Recent trends that have affected values of properties in the region are the aftermath of the Covid pandemic and short-term rental regulations.
During the Covid 19 pandemic, home prices in the Lake Placid region increased quickly due a rush on the market. These homes were selling above asking price, with some even selling without being seen in person. This increase in price could be seen throughout most rural areas across the nation, as buyers from the cities were looking to have more freedom. The Adirondack region provided the perfect area to escape the crowded city where home buyers could explore nature and relax.
Regarding short-term regulations, some members of the Lake Placid community believe that the new regulations will bring homes back to affordable pricing and rebuild the neighborhoods that were seen before. However, the market is showing otherwise. Home prices decreased and leveled out before the regulations were put in place. While some areas may see another slight drop due to the regulations, the prices will still be affected by home buyers who are looking for second homes in our region. The resort status of Lake Placid is now nationally recognized with large events occurring each year, attracting new home buyers who may look to purchase homes at the current prices. Unfortunately, the current household income in the Lake Placid region now cannot support the current home values.
When determining your housing, most accountants and banks suggest only spending less than 30% of your gross income on rent or a mortgage. According to realtytrac.com, the current median residential home price in Lake Placid is approximately $394,000. Zillow and Realtor are showing slightly lower numbers, but they include fractional and timeshares whose values are generally $15-75,000, bringing the median home price lower. If a homebuyer plans on acquiring a mortgage at 4.5%, they will need to make at least $6,239 a month ($74,875/ year) with a 20% down payment ($78,800) in order to afford the home. As of 2021, the average household income in Lake Placid, NY is around $47,000 per year (3,916/month) according to newyork-demographics.com. With this average household income, most homebuyers in the region would only be able to afford a $200,000-$300,000 house with a 20% down payment.
Knowledge is power! Research is essential when you are interested in purchasing a home. The more knowledge of the area, the easier the process will be. With real estate being an ever-evolving industry, even minor or major changes can make waves leading to great or poor real estate purchases. Working with a reputable agent with knowledge of region is an excellent place to start.