In the fourth quarter of 2019, the Westchester housing market continued to recover from the impact of the 2018 Tax Reform cap on state and local taxes (i.e., the “SALT Cap”). Single-family home sales were up almost 4%, the second quarterly increase in a row following seven straight declines after the SALT Cap went into effect. And prices were up as well, rising almost 3% on average and over 2% at the median. For the calendar year, Westchester’s single-family home sales and prices were mostly flat, due to the weak first half to the year. But the trend does seem to show that Westchester buyers are pricing in the SALT Cap after 18 months of doldrums – indeed, the high-end is well into recovery, with sales of $3M-plus homes rising 37% from last year’s fourth quarter. Going forward, we believe that Westchester will experience a robust spring market, responding to strong housing fundamentals like low-interest rates, a growing economy, and pricing still below the heights of the last seller’s market.
The Westchester housing market surged in the third quarter, showing signs of recovery from the lingering effects of the 2018 Tax Reform cap on state and local taxes (“SALT Cap”). Single‑family home sales were up about 1% compared to last year’s third quarter, the first year‑on‑year increase since the SALT Cap was passed. Similarly, single‑family average prices rose 3.3%, the largest quarterly appreciation since the inception of the SALT Cap. Moreover, the luxury market showed signs of life with 38 sales of $3M+ homes, an increase of almost 23% from last year’s third quarter, and the most quarterly sales in over four years. In the condo and coop markets, prices were also up significantly; sales results were more mixed, but only because inventory levels are down to about 3‑4 months. Basically, we believe that higher‑end home buyers are finally starting to price in the effects of the SALT Cap, and that the overall strength of the housing market – historically low rates, attractive overall values, and a solid economy – are going to continue to drive demand through the end of the year and into 2020.
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.
“Award winning top White Plains Realtors Peter Gorbutt And Carlos Gomez join Better Homes and Gardens Rand Realty”
White Plains, NY—Better Homes and Gardens Rand Realty has added two new Associate Brokers to its award-winning team: Peter Gorbutt and Carlos Gomez, who are both consistently-ranked multi-million dollar agents.
Says Denise Friend, Regional Branch Manager, “We could not be more thrilled to have Peter and Carlos on our White Plains team of top producers. They really know this market and understand what our clients want and need and are able to deliver it all when it comes time to find a client their dream home.”
Gorbutt has been selling real estate since 2000 and has been ranked at the top of his profession as a multi-million-dollar Realtor®. He says that what sets him apart is his “dedication to selling homes quickly and for top dollar.” Before making the switch to real estate, Gorbutt was a fashion executive and says that he enjoys working in real estate so that he can “help people achieve their dreams.”
“I work hard to be an advocate, a home stager and a home designer, all-in-one for my clients,” he said. “This has resulted in lifelong relationships with my clients that have been and will always be key to my success, with over 80 percent of my business coming from referrals from satisfied clients.”
Gorbutt’s partner, Carlos Gomez has been selling real estate since 2002 and is a multi-million-dollar Realtor®. Gomez, a former IT consultant, joined Gorbutt to form a top-notch real estate team. Gomez is fluent in English and Spanish and looks forward to working with both Spanish
and English-speaking clients alike. He says that understanding his client’s needs and the impact that buying a home has on their lives, has been the key to his success. Gomez gets to know each of his clients personally and works tirelessly for them to ensure that their real estate goals are met.
He says, “My goal is to know that each and every client has a positive home buying and selling experience. I take pride in taking care of all the details so that my clients can focus on the big picture and get on with their busy lives.”
Property Spotlight: Historic Colonial Hits the Market in White Plains Fully Renovated 1700s Westchester County Home Offered for Sale at $1,435,000
White Plains, NY —- Better Homes and Gardens Rand Realty has announced the listing of a historic 1710 colonial set on a beautiful 1.2-acre property for $1,435,000. The 3,471 square foot home offers classical elegance and historic charm throughout its 4 bedrooms and 3½ baths and is filled with 1700s historic touches including original architectural features. Fully renovated, the home also offers the best of contemporary living and design and is located in the heart of White Plains, a short commute to New York City.
The historical elegance of this beautiful home is evident in every corner, including original colonial aspects which have been meticulously reimagined in each room: exposed wood beams, 18th-century brick, wood-burning fireplaces, period molding, and wide king’s board flooring. Combined with modern features including new windows, a new boiler, central air conditioning, modern appliances, and new electrical and plumbing this home is the perfect blend of historical charm and modern amenities.
Listed with Nicholas Wolff, Associate Broker, and Daniel Luckner RE Salesperson, Better Homes and Gardens Rand Realty, White Plains, “this is a very unique listing and a perfect fit for any history buff as it was once home to Benjamin Lyon, a Revolutionary War hero who cast a vote for the Declaration of Independence.”
For more details: https://www.bhgre.com/property/28-Colonial-Rd-White-Plains-NY-10605/50041212/detail
White Plains, NY—Better Homes and Gardens Rand Realty announced that Annette Cicinelli, who has sold over $20M in homes, has joined the Yorktown and White Plains offices.
Annette, who has risen to the top of the industry as a seasoned agent at Coldwell Banker and then Houlihan Lawrence, began her career in real estate in 1999. Known as “The Real Estate Girl,” she has been a successful REALTOR® for 20 years, serving the entirety of Westchester County, and holds a dual license in New York and Connecticut. She is an extremely active member of the Yorktown community where she participates in many town-sponsored events and is considered to be a knowledgeable, committed and sociable realtor with a powerhouse of expertise and power in the real estate industry.
Annette attributes her success to her “love for real estate, as well as always putting the client first and always being honest.”
“Communication is imperative in the real estate industry and knowing what and what not to tell buyers and sellers is key. If a buyer or seller asks you a question and you don’t know the answer, don’t make one up – just find it out!”
As an active community member, Annette loves when she can make a client’s dream come true and then see the family in town. “When I see a buyer at the supermarket or a school event and they tell me how much their family loves their new home, it makes my day,” she said.
Says Don Dwyer, Yorktown Office Manager, Better Homes and Gardens Rand Realty:
“We are thrilled to have Annette join our growing office. She brings local market knowledge and insight, home marketing skills and negotiation power that will prove to be advantageous to both our company and clients.”
Better Homes and Gardens Rand Realty Property Spotlight: Spectacular Home by Award Winning Architect Hits the Market in Scarsdale for $2,899,000
Scarsdale, NY– Better Homes and Gardens Rand Realty has announced the listing of a gorgeous, move-in ready five bedroom, six+ bathroom contemporary colonial, designed by award-winning architect Eran Chen featuring a loft-like flow and situated at the end of a cul-de-sac.
With over 6,000 square feet of bright, sun-filled living space, the house features floor-to-ceiling windows set off by black oak floors, along with state-of-the-art LED lighting. The kitchen is the heart of the home, designed by Vicente Wolf and complete with Calcutta gold countertops, four ovens, a built-in espresso machine, Sub Zero refrigerator and Viking range that will make even the most novice cook feel like a professional. Built in 2007, the home has been modernized with the most current smart home features, including Nest thermostats, electric vehicle charging station, custom closets, 7 zones, generator, and smart home security system.
Listed with Esther Berkowitz, Associate Broker at Better Homes and Gardens Real Estate Rand Realty, she says, “This home seamlessly blends colonial charm with a contemporary feel. As soon as you enter this house you are welcomed into a massive two-floor foyer with great natural light. The feeling of this home is like no other; it truly is a one-of-a-kind property in a serene setting.”
With close to an acre of beautiful park-like property, this home is ideal for indoor-outdoor living and has plenty of room to grow, including approvals already secured for an in-ground pool and basketball court.
For more details: https://www.bhgre.com/property/14-Rock-Hill-Ln-Scarsdale-NY-10583/50112294/detail
Right now is a really great time to be buying a home in Westchester or the Hudson Valley.
Man, do I hate saying that. As I’ve explained before, I hate the phrase “great time to buy” for a couple of reasons.
First, people have different needs, and a market that’s great for one person might be terrible for another person.
Second, while markets tend to move together, we do see micro-markets (i.e., towns and villages) that defy larger trends. So while it might be a great time to buy in Village A, it might be not so great in Town B.
Third, and most importantly, though, “it’s a great time to buy!” just seems like a hack thing to say, the kind of thing that TERRIBLE real estate agents have said for generations to get unsuspecting and gullible people to buy an overpriced home. And I think that most people get suspicious when real estate agents talk like that.
So I understand if you’re skeptical. And that’s why I don’t want to just TELL you it’s a great time to buy, I want to SHOW you why it’s a great time to buy.
Specifically, I want to make this specific point: the monthly payment you need to buy an inflation-adjusted average priced home in Westchester and the Hudson Valley is as low as its been in a generation.
Think about what I’m saying for a second. I’m NOT saying that homes are cheaper than they’ve ever been. That’s not true. Depending on the year, homes have appreciated, and if you go back more than 15 years, they’ve appreciated pretty dramatically. I’m just saying that the MONTHLY PAYMENT you need to make to buy the AVERAGE PRICED HOME is lower right now than it’s been in a generation — if you control for the effects of inflation.
If you look at the graph below for Westchester County, you’ll see what I mean.
On that graph, as we’ve done before, we’ve plotted the monthly payment that a purchaser in the county would have to make to purchase the average-priced home at various points over the years. After all, affordability is not just a matter of the sales price – it’s a matter of the monthly payment you’re going to have to make, which is partly a function of the prevailing interest rate. And then to measure the change in the monthly payment over time, we factored in the effects of inflation.
So we took the following data points:
•The average price of a single family home up to the end of 2017 – from the local MLS data.
•The average interest rate for a 30-year fixed-rate mortgage for every calendar year up to 2017 – from Freddie Mac.
•The prevailing inflation rate for every calendar year up to 2017– from the US Department of Labor.
You can see the results on the graph. The monthly payment you have to make to purchase the average-priced home in Westchester is just about as low as it’s been in years. We saw the slightest uptick from 2012-2014, partially because of a slight increase in pricing and a slow inflating of interest rates. But the payment came down again over the past two years, with rates falling and prices stalling.
Generally, though, we’re talking about a monthly payment that is as low as anytime in the past 35 years – and as low as it was in the mid-1990s, during a crippling buyer’s market.
So why are monthly payments lower than they’ve been in a generation? A couple of reasons:
1) Prices. Part of it is that we have not seen prices go up in any measurable way in almost 10 years. Home prices peaked in 2006-08, lost about 25-30% of value from 2008-2010, and have bounced around a little since then. But they’re still around 2004 levels — without controlling for inflation.
2) Inflation. Ah, yes, inflation — the value of money goes down a little bit each year as inflation takes a bite. Now, inflation rates have been pretty low over the past 15 years from historical standards, but that little bit each year does add up.
3) Rates. But the biggest reason we’re seeing monthly payments lower than they’ve been in a generation is that rates are still at historic lows. After all, about ten years ago, the average interest rate was about 6%. For the past few years, it’s been below 4%. That’s a huge difference in your monthly payment.
And the same is true throughout the Hudson Valley. I showed you Westchester first because we have good data on prices for the county going back all the way to 1981. In other counties, our data doesn’t go back as far, but if we look at each of those counties you can see that it’s pretty much the same story for the time period we have.
Orange County. Here’s Orange County, where we have data going back to 1994:
You can see that the monthly payment to buy an average-priced home in Orange County is lower right now than it’s been in over 20 years.
Rockland County. In Rockland, we have data going back to 2002, over 14 years of data.
Again, you can see that even with a slight rise in the past few years, the monthly payment you have to make to buy the average-priced home in Rockland is lower right now than it’s been since at least 2002, and probably for quite a bit of time before that.
Putnam County. Similarly, we have data going back to 2002 in Putnam, and the story is the same:
Dutchess County. Again, same story in Dutchess County for that same period:
And although we don’t have data for Orange, Rockland, Putnam, or Dutchess going back as far as Westchester, the fact that the curve over the recent decade or so is very consistent with Westchester’s results suggests that, like in Westchester, the monthly payment you need to make throughout the Hudson Valley is lower right now than it’s been since the Carter administration.
Condos and Coops. All that’s for single-family homes. What about condos and coops? Well, we don’t have data going back as far, but in each county, condos (and coops in Westchester) show the same trend — the monthly payment to buy an average priced condo or coop in the region is lower right now than it’s been at any time since the 2005 era. Here are the graphs:
You can see that except for Westchester and Putnam condos, which have seen some pricing changes in the past two years, the monthly payments are lower than any time since 2005. And even in Westchester and Putnam, they’re lower now than at any time in the last decade, just a little higher than the last two years.
We wrote this up last year, and predicted that 2016 would be the last time we’d be able to say it. And we were mostly correct, since prices throughout the region went up a bit, and rates started to creep up. So it’s not quite right to say that 2018 is the best year to buy a home in a generation, since 2917 and 2916might have been better. But you have to otice the trend — the real monthly payment you have to make to buy the average-priced home in our region is lower than it’s been in years.
Again, I HATE it when real estate professionals say that “this is a great time to buy,” because at many times in our history that has been bad advice.
But if you measure a “great time to buy” by looking at the monthly payment you’ll have to make to buy a home, then we’re talking about as good a time to buy as any in the past decades. Prices have been flat for almost 10 years, and they’re down significantly if you factor in the effects of inflation. And interest rates are still as low as we’ve ever seen them. Unless we see some major shock to the economy, I think we’re looking at a near-decade of reasonable price appreciation coupled with increasing interest rates – both of which are going to drive that monthly payment up over the next few years.
So I’m not going to tell you what to do. That’s not my job. But if you’ve been thinking about buying a home, I think these graphs speak for themselves.
Joe Rand is the Chief Creative Officer of Better Homes and Gardens Real Estate | Rand Realty, and compiles and writes the Rand Quarterly Market Report.