By John E. Baer, SRES, SRS
The short answer is, according to third quarter 2018 housing market indicators, the housing market in Westchester remains strong. What is my answer based on?
First, we seem to be very slowly shifting from what has been, and still remains, a seller’s market to more of a buyer’s market. Based on the first nine months of 2018, in Westchester new listings were down by 6%, 1% and 11% for single family, condo and co-op homes respectively which means that with the low inventory of homes, it remained a seller’s market. Average price for all home sales increased slightly while average days on market dropped 6% over the previous year to 63 days. At the same time, competition among buyers was high, and still is, with the county maintaining over 98% list to sale pricing and sales. This is an indication that buyers seem to be following the inventory.
In the high end of the market, the number of homes sold over $2 million remained flat year-over-year with average prices increasing slightly to $2.9 million. Harrison, Mamaroneck, New Castle and the Town of Rye all had more luxury sales in the third quarter of 2018 when compared to the third quarter of 2017.
Seasonal shifts once seen in years past with buyers making decisions in spring and fall have not held true in Westchester. This combined with impending loan rate increases, high consumer confidence and strong economy should drive sellers to the market and not wait until spring of 2019.
Although listings were down based on the first nine months of 2018 over 2017, new listings for single-family homes in the third quarter of 2018 were 5.9% greater than they were a year earlier. Similarly, pending sales of single-family homes were up 1.5% in the third quarter. And, the average sale price of a single-family home was up 0.7% to $879,774.
So, why did I say earlier that there is a slight shift from a seller’s market to a buyer’s market? One indicator is that in the third quarter of 2018 inventory of single-family homes for sale increased 3.7% over the previous year. And as inventory of homes increases and the demand for homes by purchasers of homes remains strong, it is unclear if 2019 will remain as strong a seller’s market as it was last year. Clearly, mortgage rates have been increasing. By the beginning of 2019, experts predict mortgage rates will climb even higher. The Mortgage Bankers Association has recently updated its long range forecast, predicting that the average 30 year mortgage rates will rise to 5% by the end of 2019.
Millennials Are Driving the Market
There is a popular myth that Millennial’s are a generation of renters. However looking back at the real estate market in 2018, Millennial’s were a big demographic group and as they are getting older and settling down, they are getting into their home buying years. In addition, when Millennial integrate further into the workforce with lasting and high paying careers, as many of them are in the New York metropolitan area, they will be more comfortable with taking out mortgages. For this reason, I believe that they are now, and will continue to be, a strong purchasing group in Westchester.
Given all of the trends mentioned above it is unclear how long it will remain a seller’s market and how quickly the shift to a buyer’s market will accelerate. One thing is clear, however, given the strong national and Westchester economy, growing demand by home buyers, the modest rise of a mortgage rates, and the increased inventory of Westchester homes on the market, I optimistically believe 2019 promises to be a healthy housing market.
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.