First Quarter 2019: Real Estate Market Report – Westchester County, NY

The Westchester housing market stumbled through the first quarter of 2019, with both sales and prices down sharply. Sales dropped almost 5% for the first quarter and 4% for the rolling year, continuing a trend we have been watching since the enactment of the 2018 Tax Reform’s cap on state and local tax deductions (“SALT Cap”). As we expected, the SALT Cap has had a modest but meaningful impact on the higher-end Westchester market, where more home buyers are likely to itemize their deductions and feel the effect of the cap. And this decline in sales is also holding back price appreciation, with the average price down almost 5% for the quarter and down a tick for the year, as the SALT Cap suppressed what we believe would otherwise be the kind of robust growth we have seen in lower-priced markets in the region. Indeed, even in Westchester, the negative impact of the SALT Cap was reduced in the lower-priced condo and coop markets, which both saw price appreciation for the year. All that said, at some point we expect the SALT Cap to be priced into the market, and with demand still fairly robust we believe that the spring market could still open strong.

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