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Real Estate Market Report: Third Quarter 2016 – Westchester & Hudson Valley Market Overview
The housing market in Westchester and the Hudson Valley in the third quarter of 2016 defied the standard economic laws of supply and demand. Sales were up and inventory was down, but prices were flat across the board. Why? Maybe buyers are just leery of making a move during a tumultuous presidential election year.
Sales activity continues to increase throughout the region. Sales were up compared to the third quarter of last year in every county in the Report, ranging from a modest 2% increase in Westchester to a robust 18% rise in Orange. We’ve now seen sustained sales increases for almost five years, with regional year‑on‑year sales going up in 17 out of the last 19 quarters. And we’re reaching transactional totals we haven’t seen since the height of the last seller’s market, with the region hitting 15,000 single‑family home sales for the first time since 2016. We did see some signs, though, that the pace of growth might be slowing: regional sales were up only 8% for the quarter, relatively disappointing in a rolling year where sales rose almost 17%.
Inventory continues to tighten throughout the region. The supply of homes for sale is falling throughout the region, down in almost every county in the Report: dropping 20% in Westchester, 31% in Putnam, 17% in Rockland, and 21% in Orange. And if you look at the months of inventory available given the current rate of sales, we are already approaching the six‑month inventory level that usually signals a tight seller’s market. For single‑family homes, Westchester is already below six months at 5.8, and the other counties are getting close: Putnam at 7.3, Rockland at 6.4, and Orange at 8.1. And for condos, it’s the same story: Westchester at 3.7, Putnam at 4.7, Rockland at 7.1, and Orange right at 6.0.
So with demand up and supply down, why aren’t prices rising? Prices were down modestly throughout the region, and in most of the counties in this Report. We can think of three reasons.
- Disproportionate strength in the lower‑end markets. The fact that sales were up 18% in lower‑priced Orange and only 2% in higher‑priced Westchester might be a sign that demand is stronger at the entry‑level. That would tend to drive overall pricing down a bit.
- Buyers are still spooked by the financial crisis and meltdown of 2008‑09. Maybe buyers aren’t yet willing to give in to seller demands for higher prices – that would blunt the impact of declines in inventory, and might also explain why sales increases have tapered a bit.
- The impact of a particularly tumultuous presidential election year. It’s tough to get data on this, because we have so few presidential election years to use as comparison points. But real estate agents have traditionally complained about the difficulty of selling homes during a presidential election – and we expect that this election is especially fraught for home buyers (on both sides).
Going forward, we are hopeful that the market will close the year well. The fundamentals of our regional market are strong: demand is high, inventory is falling, interest rates are near historic lows, and the overall economy is doing fine. Accordingly, we expect that sales will continue to outpace 2015 levels, and believe it’s only a matter of time before these falling inventory levels start driving meaningful price appreciation throughout the region.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
Second-Quarter 2016 Real Estate Market Report: Dutchess County
The Dutchess County housing market surged forward in the second quarter of 2016, with strong increases in sales activity coupled with modest but promising signs of price appreciation.
Sales. Dutchess single‑family home sales were up again in the second quarter, rising 18% from last year. This marked the seventh quarter in a row with year‑on‑year‑sales increases, leading to a rolling year where sales were up almost 28%. With almost 2,400 sales over the rolling year, Dutchess is now closing homes at a rate that rivals what we saw during the last seller’s market.
Prices. We continue to see the first “green shoots” of price appreciation in Dutchess, with prices up just slightly on average but rising over 5% at the median. For the rolling year, pricing is flat, but we are starting to see signs that prices might be moving in a positive direction. With the sustained increases in sales activity that we’ve seen for the past two years, we are bound to see an impact on pricing eventually.
Inventory. Dutchess inventory continues to decline, now down over 25% to 13.5 months of active single‑family listings. Although we are nowhere near the six‑month level of inventory that usually signals a “seller’s market,” we are certainly seeing some tightening that could support the price appreciation we are expecting.
Negotiability. The negotiability indicators show that Dutchess sellers might be starting to get some leverage with buyers. Homes were selling for a little closer to the asking price, with the listing retention rate up above 96% for the first time since the last seller’s market. And the days‑on‑market fell again, now down below six months.
Condominiums. The condo market was also up, with sales rising over 8% and prices a little mixed. For the year, condo sales are up over 28%, but pricing is down on average and at the median. Inventory continues to tighten, though, which could stabilize pricing later this year.
Going forward, we believe that Dutchess is on the precipice of meaningful price appreciation. Sales have been up for several years in a row, and it’s only a matter of time before these levels of buyer demand start driving prices up. With a stable economy, low interest rates, and homes still priced at appealing 2004 levels (without even controlling for inflation), we believe that Dutchess is poised for better things by the end of this year.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
Second-Quarter 2016 Real Estate Market Report: Westchester & Hudson Valley Market Overview
The Westchester and Hudson Valley regional housing market surged again in the second quarter of 2016, with sharply rising sales finally starting to have an impact on pricing, particularly in the mid- and entry‑priced markets throughout the region.
Sales. Activity continues to surge, with regional sales up over 26% compared to the second quarter of last year, and rising in every county in the Rand Report. We’ve now had sales going up for over four years, with regional transactions rising in 16 out of the last 18 quarters. Most importantly, we’re now seeing sustained sales increases driving sales totals to levels that rival the height of the last seller’s market, with almost 15,000 single‑family homes and 3,000 condos sold over the past 12 months.
Inventory. Available inventory continues to tighten throughout the region. In the real estate industry, we measure inventory levels by looking at the “months of inventory” available at any given time on the market, and consider anything under six months of inventory as an indicator of a “seller’s market.” Well, we are not yet under six months in any of our regional markets, but we’re moving in that direction, with months of single‑family inventory down 24% in Westchester, 38% in Putnam, 32% in Rockland, 39% in Orange, and 25% in Dutchess. Condo inventory was also down, falling 38% in Westchester, 48% in Putnam, 9% in Rockland, 29% in Orange, and 18% in Dutchess. Both Westchester and Putnam condos are now below six months worth of inventory, and other counties are closing in on the threshold.
Prices. These sustained surges in sales activity are not, though, yet having a widespread impact on pricing. You’ll notice on the accompanying graph that regional average prices have been ticking down for the past year or so. This is a little surprising, given that basic economics tells us that increasing demand coupled with falling inventory should drive prices higher. But we caution you not to read too much into the regional price decline, because the relative strength of activity in the lower priced markets (Putnam, Rockland, Orange, Dutchess) compared to Westchester has changed the mix of properties sold over the past year. Indeed, if you look at individual counties, we had price appreciation in Putnam, Rockland, and Dutchess, and mixed results in Orange. It was only in Westchester that we had prices go down, but even there we believe that the drop was largely caused by a relative lack of demand in the very high end of the market, for homes selling above $3 million. In other words, both the regional price decline and the price drop in Westchester are partly caused by the relative strength of lower‑priced markets compared to higher‑priced markets throughout the region.
Going forward, we expect a robust summer market. The fundamentals of our regional market are strong: demand is rising, inventory is falling, interest rates are near historic lows, and the overall economy is doing fine. Accordingly, we expect that sales will continue to outpace 2015 levels, and believe it’s only a matter of time before the sustained increases in buyer demand start driving meaningful price appreciation throughout the region.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016: Real Estate Market Report: Dutchess Market Overview
The Dutchess County housing market started the year with a massive spike in sales activity, which had only a modest impact on pricing.
Sales. Dutchess County single.family home sales surged again in the first quarter, with transactions up a whopping 43% from last year. This marked the sixth quarter in a row with year on year sales increases, leading to a rolling year where sales were up almost 30%. With 2,300 sales over the rolling year, Dutchess is now closing homes at a rate that rivals what we saw during the last seller’s market.
Prices. In our last Report, we noted that we were starting to see the first “green shoots” of price appreciation in Dutchess. That continued in the first quarter, with the average and median price both up a tick. The rolling year numbers are still not positive, but we think it’s only a matter of time. With these types of sustained increases in sales activity, we are bound to see an impact on pricing this year.
Inventory. We measure inventory by looking at the “months of inventory” that are available, given the current absorption rate of properties on the market. Generally, the industry regards six months of inventory as a demarcation for a seller’s market. In Dutchess, we are nowhere near that, with inventory still above 14 months. But the market is definitely tightening, with the months of inventory falling over 25% in the past year. As inventory tightens, we would expect prices to start going up.
Negotiability. The negotiability indicators show that Dutchess sellers might be starting to get some leverage. Homes were selling for a little closer to the asking price, with the listing retention rate up above 95% for the first time since the last seller’s market. And the days on market fell again, now down below six months, indicating that homes are selling a little more quickly. If homes are selling more quickly, and for closer to the asking price, that means sellers are gaining a bargaining position with buyers.
Condominiums. The condo market was also robust, with sales up over 28% compared to the fourth quarter of last year, and up over 22% for the year. Pricing was disappointing, though, with the average and median down for both the quarter and the year. Inventory continues to tighten, though, which could stabilize pricing in 2016.
Going forward, we believe that if Dutchess continues to see sustained increases in sale activity, we are bound to see meaningful price appreciation by the end of the year. With a stable economy, low-interest rates, and homes still priced at appealing 2004 levels (without even controlling for inflation), we believe that Dutchess is poised for a strong 2016.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016 Real Estate Market Report: Westchester & Hudson Valley Market Overview
The Westchester and Hudson Valley regional housing market in the first quarter of 2016 picked up where 2015 left off, with another surge in sales activity that is still not yet having a widespread impact on home prices. With inventory declining throughout the region, though, we believe that we will start seeing meaningful price appreciation before the end of the year.
In our last Rand Report, we welcomed readers to the next “seller’s market,” predicting that 2016 would be marked by increasing sales, declining inventory, and rising prices. So far, we’re right on two out of the three predictions: sales continue to go up, inventory continues to go down, but prices have not yet taken off throughout the region.
Sales. Activity continues to surge across the region. Transactions were up in every single county in the Report, and collectively rose over 23% compared to the first quarter of last year and over 18% for the rolling year. This is nothing new – we’ve been watching sales go up quarter after quarter for over four years, with regional transactions rising in 15 out of the last 17 quarters. Indeed, the region closed over 14,000 single-family sales over the past 12 months, which is the highest rolling year total since the middle of 2006 – at the tail end of the last seller’s market.
Inventory. Available inventory continues to tighten throughout the region. In the real estate industry, we measure inventory levels by looking at the “months of inventory” available at any given time on the market, and consider anything under six months of inventory as an indicator of a “seller’s market.” Well, we are not yet under six months in any of our regional markets, but we’re getting close, with Westchester, Putnam, and Rockland all under eight months. More importantly, inventory is tightening across the board, down sharply in most of the counties.
Prices. You’ll notice on the accompanying graph that regional sales prices have been ticking down for the past year, and went down again in the first quarter. How can that be? Why would prices be going down even while sales and inventory are going up? Well, the explanation is that it’s just an optical illusion. Don’t believe your lying eyes – prices are actually rising.
Here’s why: right now, the market is strongest in the lower.priced markets, which is disproportionately increasing the number of lower priced sales and thereby skewing the pricing. We see that most clearly in the countywide numbers, with sales up much more sharply in the lower priced markets. While sales in the highest priced market in Westchester are up only 9%, the other regional markets are spiking: Putnam up 21%, Rockland up 20%, Orange up 28%, and Dutchess up 29%. As a result, Westchester sales accounted for only 36% of the sales in the region in the first quarter of this year, compared to 40% last year and as much as 50% in prior years. So it follows that if higher priced Westchester sales are making up a smaller part of the overall transactional mix, then the average price for the region is going to drop.
Indeed, the average price was up in four out of the five counties in the region: rising 12% in Putnam, 3% in Rockland, 3% in Orange, and up just a tick in Dutchess. Prices were only down in – you guessed it! – Westchester, and we believe it’s for the exact same reason: strength in the lower end of the market. Even within Westchester, the demand was much stronger in the entry-level coop and condo markets, which had higher sales increases, rising prices, and lower levels of inventory. It follows that if the condo and coop markets were so strong, then the lowest end of the single.family market was probably also a lot more active than the middle or high end. So don’t read too much into the regional price drop, or even the decline in Westchester single-family homes.
Going forward, we expect a robust spring market. All the fundamentals point to a burgeoning “seller’s market,” with demand high, inventory falling, interest rates low, and a generally improving economy. Accordingly, we expect that sales will continue to go up, and that the strength in the lower priced markets will gradually extend throughout all price points.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
Presidential Homes in the Lower Hudson Valley
For those of you who live in the Lower Hudson Valley, you probably know the area has some rich bits of history ingrained in its land. Whether or not you’re a history buff, you can’t deny how interesting it is to live in a place where notable political figures have made their mark. To coincide with the recent President’s Day and ongoing presidential debates, here are some connections previous Commander in Chiefs have with the Lower Hudson Valley.
Seeing as George Washington was our first president, we’ll begin with him. If you visit 84 Liberty Street in Newburgh, NY in Orange County, you will find the location of Washington’s headquarters, a fieldstone farmhouse that has the distinction of being the first public historic site in the country. Washington resided in this house for 16 months following the end of the American Revolution, and while staying there, he created the Badge of Military Merit, which is the predecessor to the Purple Heart. The house is now a museum that overlooks the magnificent Hudson River and also includes the Tower of Victory, which was constructed in 1890 to overlook the river. The tower is meant to honor the centennial of Washington’s stay at the house. It’s a real privilege to be in close proximity to a piece of history involving one of our Founding Fathers, so if you have time to visit this museum, I highly suggest you do so.
If you find yourself traveling around Hyde Park, NY in Dutchess County, you should go to 4097 Albany Post Road and visit the Springwood estate, which was the birthplace, home, and final resting place of Franklin Delano Roosevelt, our 32nd president. He was once quoted saying, “All that is within me cries out to go back to my home on the Hudson River,” and it’s safe to say anyone can find a sense of tranquility when living in a home as beautiful as this one next to a river as historic and gorgeous as the Hudson. The property also includes a library and museum that will teach you about FDR’s 12-year presidency (this was before the enactment of the 22nd amendment, which limits a president to two terms). In 1943, Roosevelt donated his home to the American people; and following his passing in 1945, it was given to the National Parks Service. There was even a movie released in 2012 called “Hyde Park on Hudson,” which starred Bill Murray as FDR. Roosevelt also had the quaint and cozy Top Cottage, which he built in 1937 as a retreat and eventual retirement home, where he also had guests such as King George VI and Queen Elizabeth. Top Cottage also has the distinctions of being one of the first wheelchair-accessible homes and one of the only homes designed by a living president.
In 1927, our 35th president, John Fitzgerald Kennedy, moved from Brookline, Massachusetts to the Bronx, where his family spent two years before moving into a home in Westchester County at 294 Pondfield Road, Bronxville, NY when he was 12. He and his family lived there from May 1929 to January 1942. It was a 5.5-acre hillside estate called Crownlands, and it was a Georgian-style mansion with a white exterior and red roof, and it had a circular row of columns that added to the home’s stateliness. The house also had a grand white set of stairs that descended the hill on which the house was situated. This was certainly a home where you could imagine the great Jay Gatsby hosting a party. It was demolished in 1953 by a developer who found a use for the land, which back then was the largest piece of property in the village. With Kennedy being one of our most well-known presidents, you can’t deny how neat it is for him to have lived in an area so close to us.
No matter where you live, odds are there is some interesting history behind your surrounding area. Whether it be local history or history that has a bigger connection to national history, it’s always fun to learn the story behind where you live. In celebration of Presidents’ Day 2016 and the current presidential race, take the time to acknowledge the moments in our country’s history that have touched certain places in the Lower Hudson Valley and value the opportunity we have to live in a place that has ties to a few presidencies.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
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So What’s Going on in the Dutchess County Real Estate Market?: The Rand Quarterly Market Report for 2015Q4
Dutchess finished the year strong, with a nice increase in sales activity coupled with the first small signs of meaningful price appreciation. For the year, sales were up sharply while prices were basically flat.
Sales. Dutchess County single-family home sales surged again in the fourth quarter, with transactions up 11% from last year. This marked the fifth quarter in a row with year-on-year sales increases, ending a year where closings were up almost 25%. Indeed, the 2,140 yearly sales represented the highest calendar year total since 2006, at the tail end of the last seller’s market.
Prices. For the first time, we are starting to see some “green shoots” of price appreciation in Dutchess, with both average and median prices up, compared to the fourth quarter of last year. For the calendar year, average prices were down a tick while the median was basically flat, but we believe that the sustained increases in buyer activity we’re seeing in Dutchess are bound to have an impact on pricing in 2016.
Negotiability. The negotiability indicators show that Dutchess sellers might be starting to get some leverage. Homes were selling for a little closer to the asking price, with the listing retention rate up to almost 95%. And the days-on-market remains down below six months for the year, indicating that homes are selling a little more quickly. As sellers gain negotiating leverage, we would expect prices to go up.
Condominiums. The condo market was robust, with sales up over 31% compared to the fourth quarter of last year, and up over 20% for the year. And although prices were down sharply for the year, they spiked this quarter, indicating that we might be seeing odd fluctuations from outliers in a relatively thin market.
Going forward, we believe that with a stable economy, interest rates near historic lows, pricing at 2004 levels, and increasing buyer demand, Dutchess is poised for meaningful price appreciation in 2016.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
So What’s Going on in the Market?: The Rand Quarterly Market Report for Westchester and the Hudson Valley Region for 2015Q4
The Westchester and Hudson Valley regional housing market finished 2015 strong, with another surge in activity that drove sales up almost 17% for the year. And although this sustained increase in buyer demand has not yet had its expected impact on pricing, declining levels of inventory are now signaling that meaningful price appreciation is imminent.
In other words – welcome to the seller’s market! As we have noted before in this Report, our housing market tends to run in approximately 15-year cycles from the beginning of a seller’s market to the end of a buyer’s market. We saw this cycle play out from 1981-1997, with prices and activity rising for about seven years through most of the 1980s (the “seller’s market”) and then falling for about eight years from 1989-1997 (the “buyer’s market”). And we saw it again in another 15-year period from the seller’s market that started in the late 1990s, ran through the crash of 2008-09, and then transitioned to the buyer’s market that ran through the past few years.
Well, as we come into 2016, we are now on the cusp of a new cycle, a seller’s market that has been slow to develop over the past few years, but is now showing real signs of taking off. Here are some of the reasons why:
First, sales activity has now been generally up for over four years. Year-on-year sales have now gone up for 14 out of the past 16 quarters, culminating in almost 13,500 single-family sales this year – the highest total we have seen since the height of the last seller’s market in 2005. By comparison, yearly regional closings routinely fell below the 10,000 sale mark after the market correction in 2008.
Second, inventory levels have dropped significantly, with some markets going below the crucial six-months-of-inventory mark. We measure inventory levels by looking at the “months of inventory” available at any given time on the market, which we calculate by taking the number of homes on the market and dividing them by the average number of homes that are selling every month. So, if we have 1,000 homes on the market, and we are selling about 100 homes on average every month, we say that we have about 10 “months of inventory.” According to industry standards, about six months of inventory signals a “balanced” market: anything less, and buyers chasing scarcity are likely to create bidding wars that will drive prices up. And for the first time in about 10 years, we’ve seen one of our markets go under six months of inventory, with Westchester single-family homes at about 5.1 and condos at about 3.9. The other markets are above six months, but they are definitely trending downward and are hitting levels we have not seen since the last seller’s market.
Third, as a result of declining inventory and rising demand, we are starting to see some “green shoots” in pricing at the county level. It doesn’t look like much, particularly since the overall regional price fell this year due to some regression in Westchester, but we are seeing a slight upward trend in most of the counties over the past several years. It takes time for changes in activity to impact pricing, but basic economics tells us that four years of rising sales coupled with a declining inventory should drive prices up.
Going forward, we expect that 2016 will mark the clear beginning of a fully realized seller’s market. The economy is in reasonably good shape, interest rates are still near historic lows, and homes are now priced pretty attractively given that they’re still at 2003-04 levels without adjustments for inflation. So we see no reason why buyer demand would fall off from its current levels. And unless we see a flood of new inventory hitting the market, those buyers are going to be chasing a declining number of homes for sale, which is likely to drive prices up in a robust spring market and through the end of the year.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
