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The Westchester housing market was the quintessential “Tale of Two Markets” in the second quarter of 2019, with single-family homes struggling while condo and coop sales soared. Single-family home sales were down, continuing a trend we have been watching since the 2018 Tax Reform’s cap on state and local tax deductions (“SALT Cap”). As we expected, the SALT Cap has impacted the higher-end Westchester single-family market, where more home buyers are likely to itemize their deductions and feel the effect of the cap. But condo and coop buyers are more likely to take the standard deduction for the federal taxes, which means they’re not feeling the pinch of the SALT Cap. And as a result, coop and condo sales are soaring, with quarterly sales up almost 8% for coops and 7% for condos, and average prices up over 6% for coops and an eye-popping 15% for condos. The question is when the single-family market will finally price in the SALT Cap hit and start responding to the fundamentals that are driving growth in the lower-priced condo market: interest rates back near historic lows, attractive pricing, and a strong economy.
