Poconos Housing, and Real Estate Market Report and Trends 2023
Well, here we go again.
Real Estate in the Poconos is (and, always has been) affected by national factors. And, this time it's fractured between National and local issues.
National, of course, is the elevated interest rates. For real estate, the higher the rate the lower the price. AND, under normal conditions, this would be true.
But, something funny is happening here in the Poconos. (It's ALWAYS different in the Poconos than out there in the real world) Our Poconos real estate market is becoming more fragmented than in the past.
In the past we had four markets.
New homes by builders. (about 5%) Almost always at the top price per square foot price.
Retirement Home Buyers (about 15% of the market)
Move Up Buyers (about 10% of the market), because Poconos jobs do not pay enough to allow moving up. Barely pay enough to survive.
Commuter Buyers (about 30%) Because it's much less expensive to live in the Poconos than NY or NJ.
Vacation (second) Home Buyers (about 40% of the market)
Today we have a fifth market for homes in the Poconos. This is the:
Short Term Rental Buyer. Mostly cannibalized from the Vacation Home Buyer market. This new group buys for purely return on investment and buys mostly existing stock. And not the same style / type of home as what's offered by the builders. They buy homes that do not compete with retirement or move up buyers. So... again... this market is mostly affecting the vacation home segment.
The complementary trend (Am getting to the point, be patient) is that there is a shakeout in what communities like (allow) Short Term Rental homes, Some recognize many homeowners in the past would rent their vacation home out to cover carrying costs. But these folks were not running the rentals as a business and the drain on community and the neighbors was not as great as having the home rented much of the time. Rules by communities limiting rentals has now come into play. Some ban, some limit and some allow.
Here's the gist of the current Poconos Real Estate Market ....
New Home, retirement, move up and commuter markets are following the nation trends. Slower sales in all of these categories. As interest rates have ratcheted up, sales have slowed to where prices have leveled and there is some softening.
Vacation home sales have softened also because of interest rates. The sales volume of vacation homes has slowed. But, prices have not softened .. because of a low volume of inventory. There are still buyers in the market, but sellers show little interest in selling.
The Short Term Rental market remains steady as these buyers are not buying on comparable prices and are buying with more initial equity investment. Cash or higher down is the norm.