Home-buying boom in Poughkeepsie pushes inventory to record low


Kingston is typically cited as having one of the most competitive housing markets in the Hudson Valley and the country, where it ranks >second in home-price growth during the pandemic, according to data from Zillow.

But the Town of Poughkeepsie has become a red-hot market as well, with “more price points showing 300–1,075 percent increases than any other town or village in the county,” realtor Sandi Park reported in her monthly e-newsletter “The Brick,” drawing upon Mid-Hudson Multiple Listing Service (MLS) data.

Poughkeepsie homes in the $450,000–500,000 range show an 800 percent increase in units sold from Jan. 1 to June 1 this year, as compared to the same period in 2019, for example. The town is home to 32,000 residents, according to U.S. census data, with a median household income (in 2019 dollars) of $43,794.

The local buying frenzy is part of a nationwide trend. Across the country, states are experiencing a housing inventory shortage due in part to the coronavirus pandemic. In the most recent housing inventory report from the National Association of Realtors, inventory levels were down 20.5 percent in April compared to 2020. The existing housing inventory is so pinched that it would take only 2.4 months to sell all listed homes at the current sales pace.

FOR MORE: Poughkeepsie real estate guide

Even with these dramatic figures in Poughkeepsie, Mid-Hudson MLS Executive Director Brian Engles — who has been in real estate for 35 years — remains largely unfazed.

“You’re not going to get me to back up anything that suggests a [housing] crisis,” Engles said. “I’ve always looked at it more like it’s a pendulum that swings back and forth. And, you know it’s the fairest game in town when that pendulum is swinging toward the middle.”

Engles said that at this point, the market is firmly in favor with sellers. He added there are many factors that have shaped both the record-breaking high sales figures and the low inventory. “I don’t think you can separate the two issues,” he said.

New York City residents and first-time buyers fueling spike

When the shutdown started in March 2020, large swaths of New York City residents were essentially stuck in apartments — many without outdoor space. Very quickly, Engles said they wanted to seek a different lifestyle and began “coming in droves” into the Mid-Hudson Valley marketplace, bringing with them robust purchasing power.

While many of the buyers originated from New York City and surrounding areas, there was also a burgeoning group of young, local first-time homebuyers that entered the market even before the effects of the pandemic set in, Engles said.

“There are plenty of first-time homebuyers,” he said, “and these are a generation of people that have … entered the working world some years ago and have been in an apartment or a stay-at-home situation locally and are now ready to buy into the marketplace.”

The $350,000–400,000 home price range in Poughkeepsie saw a staggering 1,075 percent increase in sales from the same January to June period when comparing 2019 to 2021 (omitting the 2020 pandemic year). For more context, Park points out, Poughkeepsie sold only four homes within this price point in 2019, while in 2021, there have been 47 sales, with an additional 22 active sales and another 31 in contract.

“Both from a rental standpoint and a purchase price standpoint, what price-wise by historical measures seems relatively high for our area seemed like bargain rates to these new buyers coming in from those other urban marketplaces,” Engles said.

“They started grabbing inventory quickly. And it just started moving to a point whereby the sellers started slowing down their entry into the marketplace.” He added the decision for potential sellers to pull their house off the market stemmed from the pandemic and even the high lumber prices.

Engles said in response to the pandemic, families who were anticipating a move outside of the Hudson Valley may have postponed that decision for reasons including job loss. Ultimately this led to houses being taken off the market and shrinking options for eager buyers with pent-up demand. And for New York City folks who wanted to put down roots in a town, this meant having to go further north as prices skyrocketed in the areas closest to the city and home inventory dwindled.

Poughkeepsie sold only four homes within the $350,000 - $400,000 price range in 2019, while in 2021, there have been 47 sales, with an additional 22 active sales and another 31 in contract.

Poughkeepsie sold only four homes within the $350,000 – $400,000 price range in 2019, while in 2021, there have been 47 sales, with an additional 22 active sales and another 31 in contract.

Mid-Hudson Multiple Listing Service

Prior to 2021, the last historic inventory shortage in Poughkeepsie was in 2004, according to Mid-Hudson MLS, at which time there were only 947 single-family detached homes available for sale in all of Dutchess County. As of May 2021, that figure has plummeted to 625 homes for sale, markedly lower than even the 949 homes for sale at the height of the pandemic. Meanwhile, both Westchester County and Putnam County were higher in available inventory in April 2021 than in the same period during 2019.

This also explains the remarkably low absorption rates impacting Dutchess County. The absorption rate refers to the time it takes for a house to go from being listed to sold. Engles said that in general, a steady absorption rate is between five to sixth months, meaning there is a balance between a buyer’s market and a seller’s market.

Absorption rates in the Town of Poughkeepsie and Beacon have shrunk to just under four months, according to Mid-Hudson MLS data, skewing the market favorably toward sellers. If it was at six months or above like East Fishkill, the market would favor buyers.

The future of the market

While Engles is unable to say when the market pendulum will swing back in the buyers’ favor, history has shown this to be a natural progression of the real estate market. Just a decade ago, the market was oversaturated with sellers, giving power to potential buyers.

For a return to normalcy, Engles said one important change needs to occur over the next few years: buyers need to stop buying. At some point, the price of homes will hit an apex that will eventually deter a significant number of home buyers to say, “No, I’m not going to pay that price anymore,” Engles said. He sympathized with home buyers who have been priced out of the market but reassured that that this trend shall pass.

Numbers aside, Engles cited a real estate mantra as to why the boom continues here: location.

“Beacon and Poughkeepsie are known as river towns that sit on the banks of the beautiful Hudson River in the middle of the beautiful Hudson Valley, and people find out it’s a lovely area to live in, there’s a wealth of resources, there’s a wealth of things to do,” he said. “They discover a quality of lifestyle. And that’s when they realized the true value of property in the mid-Hudson Valley.”

Christopher Cicchiello is an editorial intern currently pursuing a degree in journalism from Syracuse University. For story ideas and inquiries, you can reach him at christopher.cicchiello@hearst.com.

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