Low interest rates, a hot real estate market and a migration northward from New York City have led to inflation in the Hudson Valley, and the income of local residents isn’t keeping up with rising home prices, a Marist College study shows.
The findings are part of the 145-page “Economic Report of the Hudson Valley for 2006,” prepared by the Marist College School of Management’s Bureau of Economic Research.
Christy Huebner Caridi, an assistant professor of economics at Marist, said the real estate market traditionally is affected by population growth, but in the Hudson Valley, it also has been affected by higher-income buyers seeking to move away from the New York City area.
Caridi said there is a direct correlation between post-9/11 property sales and people moving to the Hudson Valley.
“What’s happened is, this area has been thrown off kilter in that the increase in housing values is not tied currently to population growth and not currently tied to income growth,” she said.
“At the time of the dot-com bust, about ’98 and ’99, a lot of money, wealth started to shift away from financial assets towards real estate, and it was helped in part by accommodative (Federal Reserve) monetary policy,” Caridi said. “There was cheap money available. There was a huge pool of money, liquidity literally worldwide, that permitted people to borrow money to buy homes.”