The Bronx housing market stumbled in the first quarter of 2019, slowing after torrid growth throughout most of 2018.  Sales were down sharply for most property types, and prices were mixed. Going forward, we will be watching to see if this trend continues in the traditionally robust spring market, but believe that the fundamentals of the market are still very strong.

Prices were mixed, depending on property type.  The average price was up just a little more than 1% for the quarter overall, but that masked a real divergence based on property type, with condos and single-family homes down, but multi-family and coops up.  Even with the market slowing in the first quarter, though, the rolling year numbers were very strong, with the average price up almost 11% overall, and up in every property type: rising 3% for single-family homes, 10% for multi-family, 5% for coops, and 13% for condos.

But sales were down in almost all property types.  Overall, sales were down 11% compared to last year’s first quarter, falling for most property types: down 10% for single-family homes, 20% in multi-families, and 18% for condos. Quarterly sales were only up for coops, rising 4%.  And now, for the first time in years, we’re seeing sales down for the full rolling year, dropping almost 4% overall.

So why did the market slow in the first quarter? It might just be a short-term “breather” after the torrid pace over the past few years; the market has simply exploded over the past few years, and could not keep that up forever. Indeed, the Bronx might be feeling the effects of a much more severe slowdown in the Manhattan market, which is experiencing its first major correction in years. And we might also be seeing the impact of the 2018 Tax Reform cap on state and local tax deductions, which has had a modest but meaningful effect of suppressing sales growth and price appreciation in higher-end markets throughout the region.

Going forward, though, we believe that Bronx sellers and homeowners have reason to be optimistic about where the market is going. The fundamentals are very strong: the economy is growing, inventory is still low, interest rates are near historic lows, and demand is high. We expect that, even with the challenges of the Manhattan slowdown and the tax cap, the Bronx market will grow in the traditionally robust spring market, with both sales growth and price appreciation.

Editor’s Note: This report includes only those sales reported through the Hudson Valley Gateway Multiple Listing Service.

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Pricing in the Dutchess housing market soared again in the first quarter, with single-family home prices spiking from high demand and limited inventory. Average prices were up almost 19% from the first quarter of last year, and over 11% for the rolling year. We caution readers, though, not to read too much into that data, because the quarterly average price was skewed by a number of large-acreage multi-million-dollar sales that are not representative of the average homeowner experience. That said, while Dutchess will probably not continue to experience double-digit appreciation, the county still has room for growth based on longer-term historical trends. The more significant anomaly was the severe drop in sales, which were down over 15% for the quarter and almost 8% for the year. We don’t believe that this is an indication of a slackening of demand, not with prices going up like they have, but more likely is simply a result of low levels of inventory. We expect that sales will rise in the traditionally more robust spring market, but we’re skeptical that prices will continue to rise at this rate.

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Sales in the Essex housing market went up again in the first quarter of 2019, but this increase in buyer demand had a middling effect on pricing. Sales rose over 5% for the quarter, and finished the rolling year up almost 4%. But pricing was mixed: for the quarter, the average price was down over 4% for the quarter, and down 2% for the year. We might be seeing some impact from the 2018 Tax Reform’s $10,000 cap on state and local tax deductions (SALT Cap), which particularly affected higher-income taxpayers like Essex County homeowners and home buyers, who are more likely to itemize their deductions and feel the pinch. We expected that the SALT Cap might have an impact on housing, and we’re certainly seeing that throughout the region in markets like Essex and its high-priced neighboring counties like Morris, Bergen, Hudson, and Westchester County in New York. Going forward, though, we expect that the SALT Cap’s impact will eventually get priced into the market, and believe that the seller market fundamentals are strong: a growing economy, prices well below historic highs, low interest rates, and low levels of inventory

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After sizzling throughout 2018, the Hudson County housing market slowed dramatically in the first quarter of 2019, with sales down sharply and price appreciation diminishing. Sales were down almost 15% overall from last year’s first quarter, and down for each property type. And pricing was relatively mixed compared to last year’s first quarter, with the average price down over 4% for single-family homes, up almost 6% for multi-families, and flat for condos. Now, prices are still way up for the year, rising over 6% overall and up in each property type, but the trend is a little concerning for Hudson homeowners and sellers. We might be seeing some impact from the 2018 Tax Reform’s $10,000 cap on state and local tax deductions (SALT Cap), which particularly affected higher-income taxpayers, who are more likely to itemize their deductions and feel the pinch. And we are certainly seeing some reverberations from the slowdown of the Manhattan market. Going forward, though, we expect that the SALT Cap’s impact will eventually get priced into the market, and believe that the seller market fundamentals are strong: a growing economy, low interest rates, and low levels of inventory.

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The Morris County housing market slowed down in the first quarter of 2019, with sales falling sharply. Transactions were down almost 12% from last year’s first quarter, finishing a rolling year in which they were down almost 4%. We still saw some modest price appreciation, with the average price rising about 2% for the quarter, but up only a tick for the rolling year. We might be seeing some impact from the 2018 Tax Reform’s $10,000 cap on state and local tax deductions (SALT Cap), which particularly affected higher-income taxpayers like Morris County homeowners and home buyers, who are more likely to itemize their deductions and feel the pinch. We expected that the SALT Cap might have an impact on housing, and we’re certainly seeing that throughout the region in markets like Morris and its high-priced neighboring counties like Bergen, Essex, Hudson, and Westchester County in New York. Going forward, though, we expect that the SALT Cap’s impact will eventually get priced into the market, and believe that the seller market fundamentals are strong: a growing economy, prices well below historic highs, low interest rates, and low levels of inventory.

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The Orange County housing market continued to grow in the first quarter of 2019, with both sales and prices up in what is now a thriving seller’s market. Low levels of single-family inventory continued to stifle sales growth, with sales only rising about 1% for the quarter and just a tick for the year. But demand remains high, evidenced by the almost 2% increase in the average sales price for the quarter, closing a rolling year in which Orange homes appreciated over 8%. Unlike the higher-priced markets in the region, Orange was unaffected by the 2018 Tax Reform cap on state and local tax deductions, perhaps because home buyers in the Orange price range are less likely to itemize their taxes. Indeed, if you look at the even lower-priced condo market, sales were up almost 31% and prices up over 6% for the quarter. Going forward, Orange home sellers have reason to be optimistic for the spring market, with prices at attractive levels, inventory below six months, and interest rates still near historic lows.

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The Passaic housing market continued to grow in the first quarter of 2019, with prices up again even while low levels of inventory constricted sales growth. We are seeing clear signs of a thriving seller’s market. Prices continue to go up, with the average price rising over 3% for the quarter and over 4% for the rolling year. And inventory is still falling, dropping almost 7% from last year’s first quarter and now down below the six-month level that usually signals a seller’s market. And that shortage of inventory is still suppressing sales growth, with sales falling a little for both the quarter and the rolling year. Going forward, we expect that sales will only go up when these rising prices tempt more homeowners into the market, and that we will continue to see price appreciation through a robust spring market. The market fundamentals are strong, with prices still below historic highs, interest rates low, and the economy thriving.

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The Putnam housing market got off to a relatively soft start to the year, with both sales and prices falling in a slow first quarter of 2019. Single family home sales were down almost 5%, and average prices were down almost 4%, from the first quarter of last year, maybe as a result of a slackening of demand from the 2018 Tax Reform cap on state and local tax deductions (“SALT Cap”). That said, Putnam sales were only down about 2% for the year, and prices for the year were up almost 4%, so this first quarter might be a hiccup. Indeed, overall, Putnam sellers have reason to be optimistic for the spring market, with supply still below six months of inventory, interest rates near historic lows, and days-on-market still falling. We expect that at some point the SALT Cap impact will get priced into the market, and Putnam will show some more meaningful price appreciation in a robust spring.

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The Rockland housing market surged again in the first quarter of 2019, with both sales and prices of single-family homes up for the quarter. The 8% increase in sales from the first quarter of last year was the largest increase in any county in the region, demonstrating how strong buyer demand in the county has remained. And Rockland continued to see meaningful price appreciation, with average prices up over 2% for the quarter and 4% for the year. Unlike the higher-priced markets in the region, Rockland seemed unaffected by the 2018 Tax Reform cap on state and local tax deductions, perhaps because home buyers in the Rockland price range are less likely to itemize their taxes. Indeed, prices were up even higher in the lower-priced condo market, rising 11% for the quarter and up almost 4% for the year. Going forward, Rockland home sellers have reason to be optimistic for the spring market, with prices at attractive levels, inventory below six months, and interest rates still near historic lows.

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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.

To learn more about Better Homes and Gardens Real Estate Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter, Pinterest, and Instagram.