The Westchester housing market started 2016 with a surge of activity coupled with a disappointing drop in pricing, continuing a trend we watched for most of last year.
Sales. Market activity is way up, continuing a trend we’ve been watching for over four years. Residential sales rose sharply, up 11% from last year and finishing the calendar year up almost 9%. Year-on-year transactions have now gone up in 16 out of the last 18 quarters. Indeed, the 5,836 single-family, rolling.year sales was the highest 12-month total in almost 10 years, at the height of the last seller’s market.
Prices. Even with this continued strength in buyer demand, though, single.family prices were down across the board: falling almost 7% on average, over 4% at the median, and almost 3% in the price-per-square-foot. And we’ve now seen prices go down for over a year, with the rolling year average dropping almost 4%. What’s going on? We believe that buyer demand is stronger in the lower priced markets, changing the mix of properties sold. Indeed, the price appreciation in the condo and coop markets shows that entry-level demand is strong, which indicates that perhaps we’re also seeing strong demand at the lower price points for single.family homes. We’re just not seeing the same level of activity in the higher priced markets, which is pushing overall pricing averages down.
Inventory. Indeed, the level of inventory available supports the idea that buyer demand is simply stronger at the entry level market. While inventory for single.family homes was relatively flat, we saw another drop in the number of condos and coops available. In other words, the lower end market is sizzling, while the upper end market is more lukewarm.
Negotiability. The negotiability indicators were a bit mixed. The days on market fell significantly, dropping to about six months for all property types. The listing retention rate was basically flat, though, indicating that sellers have not yet taken a commanding negotiating position with buyers.
Going forward, even with the current downward trend in pricing, we believe that the Westchester market is poised for a robust spring market. With inventory at a 10-year low, prices still at attractive levels, interest rates near historic lows, and a generally improving economy, we expect that the strength in the lower end of the market will expand throughout all price ranges.