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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: Putnam County
The Putnam County housing market surged in the second quarter of 2016, with dramatic increases in both sales and prices.
Sales. Putnam sales spiked in the second quarter, with single‑family home closings up over 36% compared to last year. The Putnam market is just sizzling, with transactions up in eight straight quarters and 16 out of the last 17. Indeed, the 1,049 closings marked the first time we have seen Putnam top 1,000 sales in a 12‑month period since early 2006, at the tail end of the last seller’s market. Condo sales were also strong, rising over 14% for the quarter and now up 31% for the rolling year.
Prices. These sustained levels of buyer demand had their expected impact on pricing, with single‑family prices up across the board compared to last year: 3% on average, 10% at the median, and 7% in the price‑per‑square foot. These results were consistent with the rolling year appreciation, which was up 3% on average, 7% at the median, and 3% in the price‑per‑square foot. Condo pricing was a little more mixed, but the overall trend was strongly positive.
Inventory. Inventory was down again, falling 38% to 8.7 months of active single‑family listings and 5.4 months for condos. Anything below six months usually signifies a tight seller’s market, which would continue to drive the kind of appreciation we are seeing in Putnam.
Negotiability. The negotiability indicators showed that single‑family sellers were gaining leverage with buyers, with the listing retention rate rising and days‑on‑market falling. The retention rate in condos was flat, but the days‑on‑market fell severely, dropping 25% to under six months of market time. We would expect homes to continue to sell more quickly and for closer to the asking price as the market heats up.
Going forward, while we do not believe that the current levels of price appreciation are sustainable, we do believe that the fundamentals of the market are strong, with demand high, prices at attractive levels, interest rates near historic lows, and a gradually improving economy. Accordingly, we expect Putnam to enjoy a robust summer market, and experience more modest price appreciation 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.
Second-Quarter 2016 Real Estate Market Report: Orange County
The Orange County housing market surged again in the second quarter of 2016, with sales spiking over 35% from last year. But pricing was more mixed, as Orange struggles to find its footing after years of bouncing around the bottom set after the 2008‑09 correction.
Sales. Orange single‑family sales were up yet again, rising over 35% from last year and now up almost 30% for the rolling year. This continues a trend we’ve been watching for over four years, with Orange sales now up seven quarters in a row and 16 out of the last 17. Indeed, we are now seeing sales at historically high levels, with the 3,239 single‑family closings marking the highest twelve‑month total since 2007, at the tail end of the last seller’s market.
Prices. Orange homeowners have reason to be hopeful about home prices for the first time in years. The quarterly pricing was mixed, with the average down 5% but the median up 5%, an unusual spread between the average and median. But what was remarkable was that for the rolling year, Orange prices were up across the board: rising 0.1% on average, 2.3% at the median, and 0.8% in the price‑per‑square foot. That may not seem like much, but it marked the first time that Orange prices have gone up in all three metrics in almost ten years.
Negotiability. The negotiability indicators also give homeowners reason to feel like sustainable price appreciation is coming, with fewer actively listed homes selling more quickly and for closer to the asking price. Inventory was down almost 40% from last year, below 9.0 months for the first time in over 12 years. Similarly, the days‑on‑market fell again, dropping almost 8%. And the last listed price retention rate was up again, rising to 96% for the first time since 2007.
Condominiums. The condo market continued to struggle. Sales were up slightly, but we continue to see prices falling. As we’ve noted before, the problem with Orange condos is that they’re priced too close to single‑family homes. If we continue to see meaningful appreciation in single‑family prices, that will arrest the slide in condo prices.
Going forward, we believe that Orange is poised for its first sustainable green shoots of price appreciation in almost ten years. With demand strong, prices low, interest rates down, and the economy generally improving, we expect that the market will have its best year in a decade.
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: Rockland County
The Rockland County market surged in the second quarter of 2016, with another dramatic increase in sales coupled with an eye‑popping 10% spike in the average sales price.
Sales. Rockland sales were up yet again, rising over 28% from last year’s second quarter and now up 25% for the rolling year. We’ve now seen sustained rates of growth for four straight years, with transactions up for the last seven quarters and 15 out of the last 16. Indeed, we almost saw 2,000 single‑family sales over the rolling year for the first time in over 10 years, at the height of the last seller’s market.
Prices. After years of struggles, Rockland pricing finally broke through, with the average sales price spiking over 10% from the second quarter of last year. But that eye‑opening number comes with a couple of caveats. First, the increase for the rolling year was more modest (and sustainable), up about 6% on average. Second, the other pricing metrics were not as robust, with the median up 5% and the price‑per‑square‑foot up 6%. And third, the 10% increase in the average was skewed by a surge of activity in the high end, with $1M+ sales rising from 3 to 12 from last year’s second quarter. So although pricing is definitely trending upwards, we should not expect to see sustained double‑digit price appreciation going forward.
Negotiability. The negotiability indicators supported the view that the market is tightening. Inventory was down, listing retention was up, and the days‑on‑market were down – all indicating that sellers are gaining negotiating leverage with buyers.
Condos. The condo market in Rockland was up, but not at the pace of the single‑family market. Sales were up a robust 10%, but prices continue to struggle along, down on average and at the median. If single‑family homes continue to appreciate, though, that will expand the pricing gap between houses and condos, which would probably have a positive impact on the condo market.
Going forward, we do not expect Rockland to see sustained double‑digit price appreciation, but do believe that the market will continue to enjoy more modest pricing and sales increases. With prices still at attractive levels, interest rates low, and the economy generally strengthening, we believe that Rockland will have its best year since the height of the seller’s market.
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 County
The Westchester housing market surged in the second quarter of 2016, with sales activity up sharply but prices down slightly because of continued weakness in the ultra high‑end.
Sales. Market activity exploded, with single‑family sales up over 22% from last year and now up over 12% for the rolling year. Year‑on‑year sales have now risen in 17 out of the last 19 quarters, with rolling year closings crossing over the 6,000‑transaction level for the first time in over 10 years. We saw the same thing in the condo and coop markets, with coop sales up over 10% and condos up over 20% from last year.
Prices. Even with this continued strength in buyer demand, though, prices were still down from last year, falling almost 3% on average and 2% in the median and price‑per‑square foot. Part of this is simply a change in the mix of properties sold, with sales softer in the higher‑end markets: $3M+ sales are down about 44%, even while sales for homes priced at $500,000‑and‑below are up over 25%. Indeed, we see the same dynamic in condos and coops, with pricing in the lowest‑priced coop market up almost 7% at the median even while the mid‑priced condo market is depreciating slightly.
Inventory. We are still seeing declines in inventory levels, which are now hovering near the six‑month level that signifies a seller’s market. Single‑family listings were down 24% to 6.7 months, and inventory is even tighter in the entry‑level markets, down to 6.0 months for coops and 4.0 months for condos.
Negotiability. The negotiability indicators demonstrate that sellers are gaining leverage with buyers. The days‑on‑market were down for all property types, at about the five‑month level for single‑family homes and condos, and the listing retention rate rose across the board. With homes selling more quickly and for closer to the asking price, we would expect to see more upward pressure on pricing.
Going forward, we continue to believe that the fundamentals in the Westchester market point to appreciating prices by year‑end. With inventory tightening, pricing at 2004‑05 levels, interest rates near historic lows, and a generally improving economy, we expect that the strength in the lower‑end of the market will eventually expand throughout all price ranges.
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.
Homes in Westchester and the Hudson Valley are More Affordable Than in a Generation
I have always hated it when real estate professionals say “it’s a great time to buy.” It always seems so self-serving, and I know it immediately causes suspicion.
So I’m not going to SAY that it’s a great time to buy a home right now. I’m just going to show you.
Specifically, I’m going to show you that the monthly payment you need to make to buy an averaged priced home in Westchester and the Hudson Valley is about as low as it’s 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 — that is, if you control for 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 2015 – from the local MLS data.
- The average interest rate for a 30-year fixed-rate mortgage for every calendar year up to 2015 – from Freddie Mac.
- The prevailing inflation rate for every calendar year up to 2015– 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 in 2015, 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.
Why? Part of it is that we have not seen prices go up in any measurable way in almost 10 years, during which inflation has reduced the “true” cost of purchasing a home.
But more importantly, rates are significantly lower than they’ve been at any time in modern history. After all, about ten years ago, the average interest rate was about 6%. It’s now 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 13 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 in 13 years.
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 2002-15 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 Wesstchester and Putnam, they’re lower now than at any time in the last decade, just a little higher than the last two years.
Our expectation is that most of the graphs in this blog post are going to start changing this year, and we’ll look back at this time period as the low point for average monthly payments in the region.
Conclusion
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 one of the Managing Members of Better Homes and Gardens Real Estate | Rand Realty, and compiles and writes the Rand Quarterly Market Report.
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: Putnam Market Overview
Putnam County sales and prices both spiked in the first quarter of 2016, with transactions again reaching levels we have not seen in over 10 years.
Sales. Putnam sales surged again in the first quarter, with single.family home sales spiking over 35% compared to last year and now up over 21% for the rolling year. Sales have now been going up for over four years, with transactions up in seven straight quarters and 15 out of the last 16. With 976 sales for the rolling year, we’re approaching the 1,000-sale mark that we have not hit since early 2006 at the tail end of the last seller’s market. We saw the same results with condos, with sales up over 35% for the quarter and the year.
Prices. After a disappointing 2015, single.family prices started the new year with a bang, spiking over 12% on average, 10% at the median, and up just a tick in the price-per-square foot. For the rolling year, prices were up at a similarly torrid pace, rising almost 4% on average and 8% at the median. Even though these types of increases are not sustainable, we do believe that Putnam’s pricing will continue to appreciate this year, particularly as inventory continues to tighten.
Inventory. Indeed, the “months of inventory” indicator fell 24% from last year’s first quarter and is now down to under 8.0 months for single.family homes. Obviously, we’re already seeing the impact of the declining inventory on pricing, and we expect that to continue through the spring market.
Negotiability. The negotiability indicators were flat, with both the listing retention rate and the days on market relatively stable. We would expect homes to start selling more quickly and for closer to the asking price as the market heats up.
Condos. The story was different for condos prices, which were down sharply for the quarter, even while the rolling year prices were relatively flat or up slightly. The condo market is very small, though, so it’s prone to skewing by a few outliers.
Going forward, we believe that these levels of buyer demand will continue through a robust spring market, although we do not expect that the spike in prices is sustainable over the long term. The fundamentals of the market, though, are good, with prices still at attractive levels, buyer demand high, interest rates low, and the economy generally improving.
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: Orange Market Overview
The Orange County housing market finally showed the long awaited signs of meaningful price appreciation in the first quarter of 2016, with prices up significantly for the first time in almost 10 years.
Sales. Orange sales were up yet again, rising 31% from last year and now up over 28% for the rolling year. This was nothing new – we have now seen sustained increases in Orange transactions for almost four years, with sales up six quarters in a row and 15 out of the last 16. Indeed, we are now seeing sales at historically high levels, with Orange closing over 3,000 sales for the rolling year for the first time since 2007 at the tail end of the last seller’s market.
Prices. What’s new is that for the first time in years, we saw some meaningful price appreciation in Orange, with prices up 3% on average, almost 4% at the median, and up just a tick in the price per square foot. This was important because prices had fallen every single calendar year since 2007 – that’s eight straight years of year-on-year price depreciation. As a result, home prices today are down almost 30% from the height of the market. But for the first time, Orange homeowners have reason to be hopeful that the trend is moving in a positive direction.
Negotiability. Certainly, the negotiability indicators support the view that Orange is due for continued meaningful price appreciation. The months of inventory in Orange fell again in the first quarter, dropping below 10 months for the first time in over 12 years. Similarly, the days on market fell again and the listing retention rate went up a full point, showing that homes are selling more quickly and for closer to the asking price – all of which tends to drive price appreciation.
Condominiums. The condo market also surged, rising over 43% for the quarter and up almost 45% for the year. So we have a lot of demand. Unfortunately, we’re not yet seeing that demand impact pricing, which was down across the board. As we’ve noted before, the problem with Orange condos is that they’re priced too close to single.family homes. If we continue to see meaningful appreciation in single.family prices, that will arrest the slide in condo prices.
Going forward, we believe that Orange is finally seeing the light at the end of the dark tunnel it entered in 2008. We expect that demand will stay strong through a robust spring market that will continue to drive meaningful price appreciation through 2016 and for several years to come.
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.
