Real Estate Market Update
2014 has been another successful year in real estate in the North Country (Clinton, Essex and Franklin Counties) with dollar sales of all property types up 10.7% to $241MM.
Residential sales have been very strong, with dollar sales up 21.8% in Clinton County, 18% in Franklin County and level in Essex County. More complete information is listed below.
Clinton County residential real estate sales grew strongly this year. The total residential sales were $83MM, compared to $68.4MM in 2013. The number of transactions was up 8% (488 sales in 2013 to 528 in 2014). Important to homeowners as well as sellers, the price of the average home sold in Clinton County increased 12.6% from $140,192 to $157,916. Overall a very strong year for the Clinton County residential market.
Residential real estate transaction in Essex County remained relatively steady with total sales in 2014 at $78MM. A total of 232 homes sold in 2014 vs. 240 in 2013, a 3.5% decrease. The average price of a home in Essex County increased from $328,529 in 2013 to $336,391 or 2.4%.
2014 was a substantially stronger year than 2013 in Franklin County with total sales at $49MM, up from $42MM in 2013. The number of residential transactions increased from 241 in 2013 to 270 in 2014 — a 12% increase. More good news on home values, with the average sale price increasing from $173,831 in 2013 to $184,179 in 2014 or 6%.
Commercial and Investment Markets
The commercial and investment real estate markets in the North Country remained stable during 2014. The following is a summary of the primary real estate asset classes:
In general demand was stable in 2014 with minimal vacancies in the primary Route 3 shopping corridor. The downtown shopping district appears to be stable with renewed interest by community groups to revitalize the area and increase foot traffic. Investor demand for net leased properties remains strong with cap rates in the 7.5-8.5% range.
Demand for office space is fairly low and has been for an extended time frame. A majority of users are considered “B level” from an economic standpoint with cost comfort in the $10-$15 per square foot range. Because of this, our markets have seen minimal new construction of office buildings. Investor demand for office buildings is nearly isolated to users. Investor interest is low due to tenant credit quality and typical lease terms in the region.
Vacancy rates have been 5% or less for an extended time period. Rents were stable to growing slightly throughout 2014. Supply and demand appear to be evening based on market time of vacant units. 2015 will be interesting with two significant multi-family projects being constructed, which will bring over 100 new units to market. Our forecast on the impact of the new supply will be general softening of the market until the new inventory is absorbed. Investor demand for multi-family properties is fairly strong due to low vacancy rates, stable rents and relative inexpensive debt to funds transactions.
Vacancies are low in the region and rents are stable in the $4-$6/SF range. Demand for space was soft throughout 2014. There are several new industrial buildings under construction which include Bombardier, Schluter Systems, FW Webb, North Country Malt and Salerno Plastics to name a few. The Chamber of Commerce and The Development Corporation continue their efforts to attract new companies to the area and promote the State’s StartUpNY initiative.
Fesette Realty in 2014
Fesette Realty continues to be a leader in residential and commercial sales, property management and leasing. The firm finished 2014 as Clinton County’s top producing real estate brokerage, setting a company record for overall sales volume in a calendar year.
Please contact our office if you have any questions about this information. We would also welcome the opportunity to assist you in your next real estate transaction.