Second Quarter 2019: Real Estate Market Report – Orange County, New York

 

Demand in the Orange County housing market continued to grow in the second quarter of 2019, even while a lack of inventory stifled sales growth. Single-family home sales fell sharply compared to the second quarter of 2019, dropping almost 11%, but we believe that has more to do with a shortage of supply rather than a lack of demand. Why? Because quarterly single-family home prices were way up across the board, rising almost 3% on average, 6% at the median and 8% in the price-per-square-foot. And condo prices absolutely spiked, rising almost 20% on average, 16% at the median, and over 15% in the price-per-square-foot. Unlike its higher-priced neighbors like Westchester and Rockland, Orange has been largely immune from the impact of the 2018 tax reform cap on state and local tax deductions, because buyers at Orange’s price point are more likely to take the standard deduction anyway. Going forward, we believe Orange prices will continue to appreciate through the summer and fall, and expect that sales might go up if we see more inventory hit the market.

Posted on July 15, 2019 at 11:40 am
Adam DiFrancesco | Category: In the News, New York, Orange County, Quarter Market Report

Second Quarter 2019: Real Estate Market Report – Putnam County, New York

 

The Putnam housing market cruised through the second quarter of 2019, with sales up and prices basically flat. Compared to the rest of the region, Putnam was a bit of an outlier, with single-family home sales rising 7% for the quarter and almost 1% for the rolling year – the only county in the region with rising sales. Single-family pricing was a little more mixed: flat on average, up almost 4% at the median, and down 1% in the price-per-square-foot. For the rolling year, though, prices have been generally appreciating. Moreover, the negotiability indicators signaled a rising seller’s market, with days-on-market falling and the listing retention rate up. Going forward, we expect that Putnam will continue to show modest sales growth and price appreciation through the summer and fall.

Posted on July 15, 2019 at 11:39 am
Adam DiFrancesco | Category: In the News, New Jersey, Putnam County, Quarter Market Report

Second Quarter 2019: Real Estate Market Report – Dutchess County, New York

 

The Dutchess housing market was a “Tale of Two Markets” in the second quarter of 2019, with single-family home sales softening a bit even while condo sales surged. After a sizzling start to the year, the single-family market cooled, with sales and prices both falling. But the lower-priced condo market was up, with sales rising over 6% and prices up about 3% on average and 4% at the median. Essentially, both markets should be doing well with these kinds of strong housing fundamentals – rates are low, inventory is low, prices are relatively low, and the economy is strong, But only the condo market is behaving like a proper seller’s market, because the 2018 Tax Reform cap on state and local taxes has suppressed sales growth and price appreciation in higher-priced markets. Essentially, the SALT cap affects taxpayers who are more likely to itemize their taxes, which includes the higher-income home buyers for single-family homes. But the SALT cap has less of an impact in the lower priced-condo market, since buyers at that price point are more likely to take the standard deduction. All that said, we believe that at some point the SALT cap hit will get priced into the Dutchess market, and that the economic fundamentals will eventually drive sales growth and price appreciation in both single-family and condo markets.

Posted on July 15, 2019 at 11:39 am
Adam DiFrancesco | Category: Dutchess County, In the News, New York, Quarter Market Report

Second Quarter 2019: Real Estate Market Report – New York Overview

 

The housing market in Westchester and the Hudson Valley continued to be a “tale of two markets” in the second quarter of 2019, with more expensive single‑family home sales and prices continuing to struggle while lower‑priced condo markets soared. We attribute this divergence to the 2018 Tax Reform cap on state and local tax deductions, which is suppressing what should be a strong, growing seller’s market.

Single‑family home sales and prices were down across the board. Regional sales compared to last year’s second quarter were down almost 6%, and down in just about every county. Similarly, the regional average price for a single‑family home fell 2.5% from the second quarter of last year, with prices down in every county other than Orange, the lowest‑priced market in the region. The regional average sales price was up just a tick for the rolling year, so we have not yet seen any longer‑term depreciation in the market.

On the other hand, the lower‑priced condo markets are booming. Regional condo sales were up over 2% from last year’s second quarter, with average prices rising an eye‑popping 14%. Indeed, the average condo price spiked in many counties throughout the region: Westchester up 15% (and up 6% for coops), Rockland up 16%, Orange up 20%, and Dutchess up 3%. This capped an extraordinarily strong yearlong run for condos, with prices up almost 7% for the year, and rising in every county in the region.

So why is the condo market booming? Well, the fundamentals of the market could not be stronger: interest rates are back down to historic lows, prices are basically at 2004 levels without even adjusting for inflation, and every national and regional economic indicator is positive. That’s why we are seeing condo sales and prices at levels we haven’t reached since the market correction ten years ago.

The better question is: why isn’t the single‑family market booming? And the answer to that is simple: the 2018 Tax Reform cap on state and local tax deductions (the “SALT Cap”), which is having a disproportionate impact on middle‑ and higher‑end home buyers. Why? Because taxpayers in those markets are more likely to itemize their taxes rather than take the standard deduction, which means they’re more likely to feel the pinch of the $10,000 SALT Cap.

That’s why we have a “Tale of Two Markets.” The SALT Cap is suppressing sales and price appreciation in the higher‑priced markets but having little or no impact on lower‑price markets – including single‑family counties like Orange, and condos throughout the region. The SALT Cap hasn’t caused anything like the devastation of the market correction in 2008‑09, but it is still hampering the growth of what should be a robust seller’s market.

Going forward, we still believe that the market is still poised for growth in the summer and fall. At some point, the impact of the SALT Cap will get priced into the market, and the single‑family market will start behaving like the condo market. Again, the seller market fundamentals are very strong: the economy is growing, interest rates are near historic lows, inventory is relatively low, and homes are still priced at attractive levels well below their historical highs.

Posted on July 15, 2019 at 11:39 am
Adam DiFrancesco | Category: Hudson Valley, In the News, New York, Quarter Market Report

Second Quarter 2019: Real Estate Market Report – Rockland County, New York

 

The Rockland housing market was a “Tale of Two Markets” in the second quarter of 2019, with single-family home sales struggling and condo sales soaring. After a surge to start the year, the single-family market softened, with sales and prices both falling. But the lower-priced condo market surged, with quarterly prices spiking over 16% on average and at the median. Essentially, both markets should be booming in response to the strong housing fundamentals – rates are low, inventory is low, prices are relatively low, and the economy is strong – but only the condo market is behaving like a proper seller’s market. Why the discrepancy? We believe it’s due to the 2018 Tax Reform cap on state and local tax deductions, which particularly suppresses growth in higher-priced markets (like Rockland single-family homes), where buyers are more likely to itemize their taxes. The SALT cap has less of an impact in the lower priced-condo market, since buyers at that price point are more likely to take the standard deduction. That’s why the condo market is soaring while the single-family market struggles a bit. All that said, we believe that at some point the SALT cap hit will get priced into the market, and that the economic fundamentals will eventually drive sales growth and price appreciation in both markets.

Posted on July 15, 2019 at 11:39 am
Adam DiFrancesco | Category: In the News, New York, Quarter Market Report, Rockland County

Second Quarter 2019: Real Estate Market Report – Westchester County, New York

 

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.

Posted on July 15, 2019 at 11:39 am
Adam DiFrancesco | Category: In the News, New York, Quarter Market Report, Westchester County

Second Quarter 2019: Real Estate Market Report – Hudson County, New Jersey

 

After sizzling throughout 2018, the Hudson County housing market continued to slow down in the second quarter of 2019. Sales were down over 6% overall from last year’s second quarter, and now down 6% for the rolling year. But this decline in sales did not have a dramatic effect on pricing, which was up about 4% overall and rising across the board: up 5% for single‑family homes, over 5% for multi‑families, and up 3% for condos. 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. Accordingly, we expect to see a relatively robust summer and fall market in Hudson County.

Posted on July 15, 2019 at 11:31 am
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

Second Quarter 2019: Real Estate Market Report – Sussex County, New Jersey

 

The Sussex market slowed considerably in the second quarter, with sales down even while pricing was more positive. Transactions were down sharply, falling 13% for the quarter and now down over 8% for the rolling year. But the drop in sales clearly did not indicate a lack of demand, with median pricing up over 5% for the quarter and almost 4% for the year. More importantly, inventory has finally come down to manageable levels, even though it’s still not at the 6‑month level that denotes a sellers’ market. Going forward, we believe that the seller market fundamentals are strong: a growing economy, prices well below historic highs, low interest rates, and low levels of inventory. So we expect to see continued appreciation and maybe even some sales growth in a robust summer and fall market

Posted on July 15, 2019 at 11:28 am
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

Second Quarter 2019: Real Estate Market Report – Essex County, New Jersey

 

Sales in the Essex housing market went up again in the second quarter of 2019, and finally started to drive some meaningful price appreciation. Sales rose over 8% for the quarter, and finished the rolling year up over 5%. And this sustained increase in sales is finally having an impact on pricing, which was up over 2% on average and almost 4% at the median. The rolling year pricing is still relatively flat (down 1% on average, up 2% at the median), but the trend is positive for Essex sellers and homeowners. Still, 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. 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.

Posted on July 15, 2019 at 11:26 am
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

Second Quarter 2019: Real Estate Market Report – Morris County, New Jersey

 

The Morris County housing market stumbled through the second quarter of 2019, with both prices and sales down slightly. Transactions were down almost 5% from last year’s second quarter, finishing a rolling year in which they were down almost 4%. Pricing was generally flat, with the average price falling about 1% for the quarter, almost perfectly flat 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. 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

Posted on July 15, 2019 at 11:24 am
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report