By John E. Baer, SRES, SRS
In Westchester, we saw a rise in the number of buyers from New York City, indicating greater migration, especially amongst millennials. The fourth quarter of 2016 also saw average sales prices increase compared to the fourth quarter of 2015.
Since the mid-2015, countywide sales have occurred at a blistering pace, as residents of New York City have increasing sought out suburban markets for greater affordability. Listing inventory continued to decline, falling 21.2% to 3,004 from the year ago quarter to the lowest fourth quarter total in 15 years. As a result, the absorption rate, the number of months to sell all inventory at the current rate of sales, fell to 3.7 months, the fastest market pace since 2001. Listing discount, the percentage from the original list price to the sales price, was unchanged at 3.6% from the year ago quarter. Days on market, the number of days from the original list price to the contract price, fell 8.2% to 90 days from 98 days in the prior year quarter.
According to the Berkshire Hathaway HomeServices Westchester Properties’ Fourth Quarter 2016 Westchester County Market Report, average prices were $808,052, down 1.6% from a year earlier for single family homes. Luxury median sales price edged 1.4% higher to $1,927,500 over the same period. Average price for condos were $360,754, down 1.1% and increased 1.3% for co-ops ($134,599). The median sale price for single-family homes were $717,082, up 0.8% over a year earlier. Median prices for condos decreased 4.3% ($334,120) and co-ops increased slightly 0.2% ($122,748).
Lower unemployment rates in 2016 throughout the state of New York and the mortgage rates remaining relatively steady created an even playing field for buyers and sellers. Overall, Westchester County experienced a small increase in median prices for single-family homes and cooperative. Sales volume for single family homes increased 4.9% ($1,081,297,913 vs. $1,030,486,593 a year earlier), and 5.3% for co-ops, which indicates a promising upcoming year as we head into the spring market.
With respect to the national picture, prices rose every month last year (through October) with the largest gains coming in the later half and a 5.61% increase nationally. Experts expect prices will continue their climb, but gains will slow.
“We believe price increases will hold steady despite slowing sales growth, because homebuyer demand is stronger now than it was at the same time last year, and because we foresee a small uptick in homes for sale,” notes Nela Richardson, chief economist at real estate brokerage Redfin.
“With the current high consumer confidence numbers and low unemployment rate, affordability trends do not suggest an immediate reversal in home price trends,” noted David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, in the December release of the Case-Shiller home price index. “Nevertheless, home prices cannot rise faster than incomes and inflation indefinitely.”
Redfin expects the median home sale prices nationally to gain 5.3% in 2017 compared to 2016, which would not be a major change from the 5.5% year-over-year gain expected to close out 2016. Zillow is forecasting the median home value to rise nationally 3.2% from $192,500 beginning November 2016 to November 2017. Zillow’s home value index rose 6.5% in the year ending November 30th.
Westchester will be the top choice for homebuyers looking outside New York City in 2017, surpassing New Jersey and Long Island, according to a new survey.
Real estate data provider Property Shark said its clients, New York City real estate professionals, predict that about 49 percent of homebuyers will look beyond the five boroughs, with most mentioning Westchester County as the place to go to.
Respondents cited Yonkers as a real estate market “that could answer the needs of priced-out buyers looking for a quiet location and more living space,” according to the study.
If the responses regarding where future homebuyers are looking to purchase are correct, Westchester residents planning to sell may be wise to list their homes in 2017.
John E. Baer, SRES, SRS is a NYS licensed real estate salesperson associated with Berkshire Hathaway HomeServices Westchester Properties of Scarsdale and Larchmont. He can be reached for questions at 914/600-6086 or at 914/844-2059. His website is www.WestchesterHomes.info.