by John E. Baer, SRES, SRS
The constricting supply of housing in Westchester has brought about some long expected price increases in most areas and in most property types, according to the “2017 Second Quarter Residential Real Estate Sales Report for Westchester, Putnam, Rockland, and Orange Counties, New York” report authorized by the Hudson Gateway Multiple Listing Service (HGMLS) which services these four counties.
The recently released report noted that in Westchester, the second quarter median sale price of a single family house was $670,000, an increase of $20,000 or 3.1% over last year’s level. The mean sale price of $900,000 was 7.0% more than last year, indicating the high end sector may be reinserting itself into the sales mix. Westchester condos and co-ops also enjoyed median price increases of 5.3% and 3.9% respectively.
Prospective homebuyers were operating in a market that has been tremendous reductions in the supply of for-sale housing over the past four years. At the end of 2014 there were 12,153 active listings posted with HGMLS in its service territory and among all of its property types - single-family houses, condos, co-ops, and 2-4 multi-family units. By the close of the second quarter of 2017 that number plunged by more than 3440 units to 8713 or 28.3% fewer active listings. The double-digit percentage rate of shrinking inventory seems be to be continuing. With respect to Westchester the inventory of homes dropped to 4359 active listings on the market, down from 5105 for the same time last year.
Realtors participating in HGMLS, a subsidiary of the Hudson Gateway Association of Realtors, Inc., reported a grand total of 4726 closed residential transactions during the second quarter of 2017, an increase of 4.4% from last year. These sales largely reflected market activity during the winter and early spring months of this year. Westchester, the most populous of the served Counties, posted 2642 sales for an increase of just 1.0% over last year. The shortage of available homes on the market has created fierce competition for those homes that are listed for sale.
In May, inventory fell for the third straight month, according to the National Association of Realtors (NAR). “Buyer interest is solid, but there is just not enough supply to satisfy demand.”
For Westchester as a whole, the absorption rate — the number of months that it takes to sell all active listings based on the pace of sales — was 3.7 months in the last quarter of 2016, the fastest pace since 2001.
A large percentage of buyers moving from New York City are attracted to walkability and smaller homes. In the past several years, city dwellers who are looking for more space than their one-bedroom apartments headed to Westchester communities south of Route 287, including the River towns, Sound Shore and the towns between these two areas, such as Scarsdale. Those communities continue to be popular, but as the inventory shrinks, some buyers may be broadening their search north of I-287.
There appeared to be no obstacles to the continuation of a healthy Westchester real estate market except for the shortage of inventory, which may inevitably drive prices higher or may diminish the volume of sales, or both. There don’t seem to be negative external factors right now that are threatening. Some external factors in good standing with real estate include low mortgage interest rates, low unemployment, good job growth, and reasonable and well-placed increases in the Federal Reserve rates. Some negative factors include possible changes to the tax code affecting real estate, and chaotic governance that causes consumers, that is, prospective homebuyers, to lose confidence in executing their home buying intentions.
Overall, current conditions points to a thriving Westchester 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.