Taking Stock of Housing: A wild ride

Unpacking the pandemic buying frenzy to answer the question ‘how did we get here?’

By Tim Rowland

Lake Placid real estate agent Jodi Gunther wondered if she had sold her last house. 

It was March 2020 amid the breadth and severity of the Covid pandemic. The work of real estate agents had been deemed nonessential and they were barred from their offices.

Gunther remembered what she’d read about the real estate crash of 1926, which helped fuel the Great Depression, and feared a similar outcome. As a hedge she took a job buying groceries for the housebound.

That was before buyers from San Francisco to Florida to Philadelphia to Puerto Rico descended on the Adirondack Mountains, as did a multitude of in-state refugees from the cities, and hastily formed LLCs that began collecting vacation properties like trading cards.

“From March 18 until mid-May we were not allowed to go into houses,” she said. “Most of us thought there was no way people would buy a house without walking through the door.”

As it turned out, the Adirondacks was on the cusp of the wildest real estate ride anyone had ever seen. Not only would they buy without entering the house, but they would also buy without entering the state. From places like Texas and the Pacific Northwest, people were hunting on the web for safe, sparsely populated locales, then submitting bids on properties they liked the looks of online.

If Adirondack housing had been costly before, the crushing demand was rocket fuel to home prices, as both the panicked and the prudent reassessed their life choices and the risks of tightly packed crowds where every exhaled breath might carry a deadly contagion.

In Manhattan there is one person for every 400 square feet; in Hamilton County in the heart of the Adirondack Park, there is one person for every 213 square acres. That sounded good, and so did prices that, to those used to real estate in major cities, seemed like pocket change. 

Outsiders paid cash and list prices were mere suggestions. According to MLS listings, one pleasant, 1,875-square-foot home in Upper Jay went on the market at $450,000 and sold for $100,000 more.

This wave of demand crashed over a limited supply with predictable results. “Scarcity has driven values,” said Mike Straight, a real estate agent in the Town of Jay. “I see things happening that have absolutely stunned me.”

Caught up in all this were people like Ashley Griffin of Keeseville, who grew up in the North Country always assuming she would be able to buy a home of her own. She and her fiancé, both 28, have professional jobs and good incomes. “You’d think we would be a shoo-in, but we are being priced out of the market, even for really tiny homes,” she said.

After looking at 10 properties and making unsuccessful offers on multiple homes, they bowed to fate and offered $30,000 over asking price on a home they liked — and got beat out on that one too. “We check the listings every day, but at this point if a house hits the market we feel like we’ve already lost,” she said.

On a popular real estate website in March, a 62-year-old cabin near Upper Saranac Lake was there for the taking. With a wood stove as its only source of heat, it had 400 square feet of living space, bunk beds and an outhouse on just shy of three acres — asking price, $340,000. 

The seller could not be considered delusional. Forty miles to the east in the town of Black Brook, a $345,000 cabin with 864 square feet of living space in a less desirable location was already under contract.

Photos by Mike Lynch

Curious trends are emerging within the park itself. Anyone with a spare lot was putting up something, anything, and finding buyers and vacationers aplenty.

In the hamlet of Jay, real estate agent Amy Shalton spent $20,000 on an Amish-style shed that she put on a lot she and her husband owned contiguous with their own home. Envisioning it as an office, vacation rental or a spot for visiting family, she and handy family members finished it as a tiny two-bedroom residence. “A little efficiency is what it is,” she said.

It was assessed the first year at $130,000 and this year at $175,000, reflective of assessors who have their hands full trying to keep up. Assessors who had just completed a painstaking revaluation of town property were told by the state they had to do it all over again, because values just six months old had been overtaken by events.

And where city residents once moved to Lake Placid to escape the hubbub, they are now fleeing Lake Placid for the same reason, Straight said, seeking the tranquility of towns outside the common tourist attractions.

Previously sleepy towns bordering Lake Placid and Saranac Lake were suddenly hot properties. At one point, in the four towns east of North Elba, there were only 10 total listings, and a couple of them were barely habitable.

Far more common than locals were buyers from downstate, who came north in a progression that was similar to the coronavirus itself. “When we saw the Hudson Valley fill up, we knew the tidal wave was coming,” said Jamie Konkoski, community development director for the village of Saranac Lake. “They were putting in offers for cash, and locals just couldn’t compete. To find a place to live, you basically had to know someone.”

Help is on the way

Examples of attainable housing projects in the North Country

Project: Land Banks

What is it? Land banks typically allow municipalities, working through a nonprofit agency, to fix up zombie homes and sell them to people who can’t afford market-rate housing.

How do they work? Property that falls into municipal ownership, usually due to unpaid taxes, is rehabilitated at a cost that’s cheaper than building new. While the primary goal is affordable housing, land banks also improve streetscapes by combating blight.

How common are land banks? There are 28 land banks in the state of New York, which has authorized the creation of 35. In the Adirondacks, Essex and Franklin counties recently established land banks, and Clinton County is in the process. The Greater Mohawk Valley Land Bank covers a part of Herkimer County in the southwestern Adirondacks.

How are they funded? Typically from a combination of grants and proceeds from the sale of rehabbed housing, but funding mechanisms are flexible. Clinton County is exploring a plan that would tap into a fractional share of sales tax in participating towns.

Who is eligible? Lower income families that are good credit risks and (often) agree to financial counseling.

For more information: Visit nylandbanks.org

Against their own interests, some real estate pros were telling friends to watch the obits or look for the telltale sign of a Dumpster in the yard — anything to snare a house before it went on the market. At a 2020 meeting of the Keene Town Board (held outdoors due to the virus) a homeowner tentatively asked the best way to sell his house. Laughing, members of the audience advised him to “tell the ladies at Valley Grocery” in Keene Valley, who would most likely be able to hook him up with an eager buyer before the day was out.

Condition seemed not to matter. A burned-out husk of a vacation home went on the market for $99,000, before being bid up and sold for $102,000, according to real estate sales records. A contractor bought a partially rehabbed house on the Ausable River with the idea of finishing and flipping it. In the end, he didn’t even have to finish it, Straight said. After a few months he put it back on the market in the same condition he’d found it and doubled his money.

The impact on the affordable-housing market is palpable. Ten years ago, $120,000 would have purchased a solid, turnkey home. Scrolling through listings looking for a $120,000 home today, Straight pointed to a dilapidated two-story house with no kitchen or working furnace.

While the pandemic was the flashpoint, it also accentuated trends that were already in the works. The Great Resignation, as it turned out, was fueled in great part by people at or near retirement age, who didn’t need much of a push to hang up their spikes — and many already had their eyes on the Adirondacks.

“The Adirondacks has become a retirement mecca, and this has pushed out a lot of working-class families,” said Bruce Misarski, the recently retired director of the Essex County housing assistance program. 

In this way, the great Adirondack real estate boom of 2020-22 is about the buyers who bought. It was also about those who sold: They loved their home, but high taxes, deep snows and grandchildren in far-off lands were pre-existing motivators — the fabulous sums their houses were now worth allowed them to cash out and fund retirements, said Garry Douglas, president of the North Country Chamber of Commerce.

Further, residents who sold their homes did so with a sense of permanence. With housing prices being what they are, and no expectation that they will ever return to pre-pandemic levels, there is no coming back — in some cases, terminating generations of Adirondack life.

Nor can children who have gone away for school or a career return home, as many previously did. “Now, they can’t return even if they wanted to,” Douglas said. “The next generation doesn’t have that connection.”

These people also played an important role in their communities, and their absence creates questions about what these communities will look like in the future. “Who’s going to volunteer to be a firefighter, who’s going to volunteer to be an EMT, who’s going to volunteer for anything?” Douglas said.

People moving in will bring their own talents and community contributions. But what happens when a residence becomes a rental? One solution: Build affordable housing. A nonprofit did so and created Fawn Valley in Lake Placid, housing for 50 people in 22 townhomes and freestanding capes subsidized by donated land, a community grant and philanthropic financial and in-kind contributions. 

Douglas said he does not anticipate a return to the Great Camp era, when the Adirondacks was populated only by the very wealthy and the people who worked for the very wealthy. But there’s a whiff of that in the air, and the full effects of the housing boom and associated affordable housing shortage are a troubling concern.

“There is no silver bullet that will solve this,” Douglas said. “This has been a very complex shift of demographics and economics.”

The series is funded in part by a grant from the Generous Acts Fund at Adirondack Foundation and by the Annette Merle-Smith Community Reporting Fund at Adirondack Explorer. If you would like to support our community reporting,get started here.