Newburgh Real Estate News Spring 2018

Posted in Historic Commercial Real Estate, Uncategorized | Last Updated April 29, 2018

There’s a real estate boom in Newburgh. What’s driving it?

Exploring Newburgh’s neighborhoods is exciting at this time of year, particularly when street after street seem caught up in spring renovation fever. The warmer weather and gentler light puts a fresh face on people and places after the long winter.

Driving the city we’ve discovered the consistently busiest areas are those anchored by Liberty Street north of Broadway, Downing Park, Liberty Street headed up towards and up in The Heights, and the mixed-use corridors near or on Broadway.

Newburgh Real Estate News Spring 2018. What's driving the boom?

A generator truck powers on-site work

To a casual observer there appear to be three key drivers to recent real estate activity in Newburgh:

  • The partnership between nonprofits: Rupco, Newburgh’s Community Landbank, and Safe Harbors of the Hudson
  • Primary and first time home buyers
  • Real estate entrepreneurs

Three key economic market conditions are also in place:

  • Interest rates are still low
  • The economy  is expanding
  • First time and primary residential home buyers are priced out of the N.Y. metro market. The high cost of construction makes this area one of the top five slowest in the nation in new housing starts per Redfin. For instance, a new home built on Long Island, just outside of Manhattan, is coming in at an average of $451,000 per home a figure possibly outside the budget of many middle class families.

Three nonprofits dig into the heart of Newburgh.

Early this March we decided to see how work on properties is progressing, especially in the area near St. Luke’s hospital.

After parking at the north end of Downing Park we headed south down Dubois. Midway we hiked fifty feet up Downing Park’s eastern slope of Downing Park and took in an incredible view of rooftops framed by the Hudson Highland mountains in the distance.

Check it out!

 

Dubois Street just north of St. Luke’s Hospital

Walking past St. Luke’s we noted multiple trucks running generators. They were pumping power into the abandoned buildings they were working on.

Trucks lined both sides of the street and carpenters, handymen, and project managers hurried about, coveralls white with dust or splattered with paint.

Saws, hammers and power tools clanged in an industrious cacophony blending ambulance sirens in a hurry  to the E.R. The noise quickly trailed off behind as we took a hard left at First Street and headed eastward towards the river.

In less then a minute we came to the corner of First and South Miller Street. Here we found a beautifully restored house, the product of the union between Rupco, The Land Bank, and Safe Harbors of the Hudson  we’d heard about.

The three nonprofits forged a collaboration, spearheaded by New York State Homes and Community Renewal,  www.nyshcr.org. It’s a state agency that works to create, preserve and improve affordable homes within communities like Newburgh.

The trio, working with the state as well as Sterling Bank, struck a deal to create a scatter-site development in the East End Historic District area north of Broadway.

The site includes 15 buildings.

Rupco/Landbank First Street renovation before work is finished. (image courtesy Google Instant Street View)

 

 

Newburgh Real Estate News Spring 2018. Nonprofit partnership between Rupco, The Newburgh Land Bank, and Safe Harbors of the Hudson Valley help drive boom.

The beautifully restored building after renovation. An East End Historic District jewel, thanks to the revitalization effort let by: Rupco, The Newburgh Community Land Bank and Safe Harbors of The Hudson.

Plans for the area include a mix of studio, one, two and three bedroom apartments for income-eligible individuals and working families.

Homeless veterans and artists will receive preferential consideration amongst all applicants.

First, we must say that the grandeur and beauty of the historic architecture encountered is inspiring.

But as we continued our walk further down First Street and taking a sharp turn left and north up Johnston Street we could see there are buildings that are simply beyond repair and area neighborhoods that still require lots of work.

The benefit of anchoring the neighborhood, though, is clear.  By renewing the buildings on Lander, South Miller, Johnston and Dubois the nonprofits have secured at four points a considerable rectangle stretching between Broadway and First that already has created a stabilizing influence in this region of the city if only visually.

Primary and first-time home buyers are coming in

Janis Borgueta, realtor at Hudson Valley Home For Sale offered us residential real estate market insights as well as a market report .

Janis is a longtime resident of the Hudson Valley who is located in Newburgh. She has seen her share of downturns caused by businesses and residents fleeing Newburgh.

Now, however, Janis sees a reversal of fortune:

“The City of Newburgh’s housing market has been making great strides in the last 12 months. As a real estate agent it has been frustrating: I have many buyers looking to relocate to the area with little inventory to sell to them.

“Many newbies are under the impression that when they decide to take the plunge they can make the move immediately. If only it was that easy!

“Buyers are amazed to find choices are few, and that Newburgh has become much more expensive than they expected.

“While the prices in Newburgh are greater than a year or two ago, there are still homes with great value that would sell for much higher prices in Rockland or Westchester. ” she said.

Stats from Janis’s market report:

A Comprehensive Real Estate Market Analysis for the City of Newburgh, NY

Sale Stats for the City of Newburgh – 12 month review, February 28th 2017 to March 1st 2018

  • Currently 34 Single Family Homes on the market
  • 139 Sold Single Family Homes in the last 12 months, up +19.8%
  • Median sale price of these homes were $113,75, up +61.3%
  • Average sales price was $135,914 up +32.6% from last year.
  • Homes on average remained approximately 104 days on the market.
  • 51 homes sold under $100,000
  • 55 homes sold between $100,000 to $249,000
  • 10 homes sold between $200,000 and $250,000
  • 10 Homes sold between $250,000 & $350,000
  • 5 Homes sold over $350K in the last twelve months.
  • 8 Additional homes sold not listed in the MLS.
  • The absorption rate is now at 5.1 months of inventory which is falling from last years 7.7 months of inventory.

Read our post about a Newburgh Architect who was able to access grants in order to fund his multi-family renovation

An investor with an interest in Newburgh.

John Hickey locally known for his investment business Newburgh Storefronts and Lots has managed and invested in properties in New York City and Brooklyn. Now his sites are set on Newburgh where he has begun assembling an investment portfolio of multi-family and commercial properties.

Q. John, when did you become interested in Newburgh?

A. I started coming to Newburgh right after the recession hit. I was looking at properties in the Heights and a few near Mt. St. Mary College. The time wasn’t right for me financially, but I stayed interested in the market.

From time to time I would pass through and look, but I never bought until last May. I got a few friends together and we bought two houses.  One was vacant the other rented. My partners were not that interested in Newburgh.

Q. What happened next, since you now own a number of properties.

A. I found a few more.  I came across a package of properties that were poorly maintained and with many issues.  One of the properties: 222 broadway is a rooming house.

I talked to some folks in the city about the building.  One called it: “ the worst building in the city, it has always been a problem for at least 20 years.”
One of John Hickey’s commercial properties on Broadway in Newburgh, N.Y.
Q. Didn’t this deter you from purchasing?
A. I was told this by a law enforcement officer, but he did say it could change. In fact, he offered some helpful suggestions:
  • cameras
  • rules for tenants
  • changing locks etc.,

I followed his suggestions and came up with some  others:

  • tough background screenings
  • evictions for rule breakers
  • no visitors
  • no letting in strangers
  • no garbage bags flying out of the windows
  • no drugs
  • no prostitution
  • no nefarious activity
  • no smoking in hallways.
Q. How has all that worked out for you in terms of property management?
A. With the rules in place we have had some success getting good tenants after also seeing to some simple fixes:
  • new mailboxes
  • new garbage cans
  • painted rooms
  • refinished bathrooms, hallways etc.

We have some other renovations in progress.  We also rented out some of our commercial properties, but that’s a bit tougher.  Residential property newly renovated rents fairly easily. Commercial property is a different game.

Q. What’s the market look like now?
A. We’re still buying, but it’s obvious that prices have soared even since last spring. Right now we’re looking for multi family, mixed use, and commercial. But so is everyone else! Good for Newburgh.  It deserves it.
Q. What’s your long term play for Newburgh?
I came to Newburgh because I study and follow gentrification.  I bought out a slumlords package of buildings, but I didn’t come up here to be a slumlord.  In a few years all my units will be renovated as tenants move in or out.
Q. What’s your advice for current residents of Newburgh?
A. Most of my tenants want better apartments.  I always warn them:  If you are renting in Newburgh and want to stay you had better buy.  These rents/house prices are going up in the next ten years. In my opinion, there is no greater transfer of wealth especially for low income individuals who purchase now and hold on for 10+ years or more.  No guarantees, but that’s my take.
John Hickey offers real estate meet ups monthly at Blacc Vanilla in Newburgh, N.Y. To follow John and learn about his meet ups visit his Instagram profile: @newburghlofts.

Read about Dwayne Jordan, another real estate entrepreneur in Newburgh, here.

In summary, nonprofit investment in a large section of Newburgh’s East End Historic District, a pressured residential market in the tri-state area owing to high construction costs and a booming economy, and real estate investors taking advantage of market conditions seem to be working in concert in Newburgh to create a real estate boom!

DISCLAIMER: This article in no way constitutes investment advice nor recommendations. Real estate investing can be highly speculative and requires a great deal of research, professional advice from licensed realtors, as well as advice from attorneys and financial institutions familiar with real property investments.

A River of Opportunities offers insights for those interested in learning about Newburgh’s commercial real estate, and the makers and creative individuals choosing to live here.