The Westchester housing market softened in the third quarter of 2016, with sales flat and prices continuing to weaken even in the face of falling inventory.
SALES. Sales activity was up, but not at the pace that we’ve seen over the past few years. Single‑family home sales rose, but only by about 2%. Similarly, coop sales were actually down by almost 3%, and condo sales fell just a tick. Transactions are still up for the rolling year, rising 11% in single‑family homes, 6% in coops, and almost 12% in condos. But we might be seeing a cooling of the sizzling buyer demand that’s been driving sales up in this market for the past five years.
PRICES. We continued to see some weakness in Westchester pricing, with single‑family home prices down 3% on average, 1% at the median, and almost 2% in the price‑per‑square foot. Pricing in the condo and coop markets was a little more mixed, but the overall takeaway is that sustained levels of buyer demand over the past five years have done little to drive price appreciation.
INVENTORY. Inventory levels continue to drop, now under six months of inventory for all property types. That might explain the relative slack in market activity, if buyers are still adjusting to the limited inventory available. But if inventory continues to fall, and demand maintains its current levels, we might see the price appreciation we’ve been waiting for.
NEGOTIABILITY. The negotiability indicators were relatively hopeful. Sellers seem to be gaining a little bit of negotiating leverage, with single‑family home sellers now retaining over 98% of their last list price. And homes are now selling in under six months, which is relatively quick by historical standards.
Going forward, we continue to believe that the fundamentals in the Westchester market are strong. With inventory tightening, pricing at 2004‑05 levels, interest rates near historic lows, and a generally improving economy, we expect that buyer demand will stay strong and eventually drive meaningful price appreciation.