Prices in the Westchester housing market rose again in the third quarter of 2017, even while a lack of inventory suppressed sales growth.
Sales. Home sales were down in the third quarter, falling about 5% from the third quarter of last year and marking the second straight quarter of declining sales in a row. This is almost certainly a lack of inventory stifling sales growth, though, rather than a decline in buyer demand. Still, though, sales are at levels we have not seen in over ten years, almost doubling from the bottom of the market at the end of 2009.
Prices. Low levels of inventory had some impact on prices, up 1% on average, 2% at the median, and down a tick in the price‑per‑square foot. Over the longer‑term, we’re starting to see some meaningful price appreciation, with average prices up almost 4%, and the median up almost 3%, for the rolling year.
Negotiability. The negotiability indicators continue to signal the emergence of the seller’s market. Inventory declined again, falling over 5% and now at the lowest level of inventory we have had in Westchester in over 12 years, since the height of the last seller’s market. Similarly, the listing retention rate was up again, and is now at almost 99% of the last listed price. And the days‑on‑market fell sharply ‑‑ homes are now selling in Westchester within about four months from listing to closing.
Condos and Coops. The condo and coop market was even more robust. Sales of coops were up almost 10%, and condo sales were up just a tick. But that shortage of available condos and coops is having its expected impact on pricing, which was up sharply across the board for both property types in the quarter and for the rolling year.
Going forward, we expect that Westchester is going to continue to see meaningful price appreciation through the rest of the year, especially as inventory continues to tighten. With pricing near 2004‑05 levels and interest rates near historic lows, we believe that the market will continue to thrive in the fall market.
The housing market in Westchester and the Hudson Valley surged again in the third quarter of 2017, with strong buyer demand driving meaningful price appreciation even while declining inventory stifled sales growth. With inventory rates continuing to fall, we expect this trend to continue through the rest of the year.
Inventory throughout the region continues to fall. Regional inventory was down almost 23%, and is now down to 6.1 months– right at the level that the industry considers a “balanced” market. But many of the individual counties in the region are now at‑or‑below six‑months’ worth of inventory, which usually signals a rising seller’s market: Westchester single family homes are now at 5.5, Putnam at 6.4, Rockland at 5.5, and Orange at 6.3.
The lack of inventory is stifling sales growth. Regional sales were down for the second straight quarter, falling over 5% from the third quarter of last year. Even though sales were up just a tick for the rolling year, we’re definitely seeing some pressure on sales growth from the lack of inventory on the market. Essentially, we need more “fuel for the fire.” That said, sales are now at levels we have not seen down since the height of the last seller’s market in 2005
These inventory levels are starting to drive meaningful price appreciation. The regional average sales price was up for the third quarter in a row, rising just about 1%. Most importantly, though, we’re starting to see long‑term meaningful price appreciation, with the average price up almost 3% for the rolling year. And quarterly average prices were up in almost every county in the region, rising 1% in Westchester, over 5% in Rockland, 1% in Orange, and over 3% in Dutchess (prices fell about 3% in Putnam).
Going forward, we expect that prices will continue to appreciate through the rest of the year. Demand is strong, bolstered by near‑historically‑low interest rates, prices that are still near 2003‑04 levels (without controlling for inflation), a generally strong economy, and sharply declining inventory. We will need fresh new listings to drive more sales growth, but we expect that we will continue to see price appreciation through a strong fall market and into 2018.