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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: Westchester Market Overview
The Westchester housing market started 2016 with a surge of activity coupled with a disappointing drop in pricing, continuing a trend we watched for most of last year.
Sales. Market activity is way up, continuing a trend we’ve been watching for over four years. Residential sales rose sharply, up 11% from last year and finishing the calendar year up almost 9%. Year-on-year transactions have now gone up in 16 out of the last 18 quarters. Indeed, the 5,836 single-family, rolling.year sales was the highest 12-month total in almost 10 years, at the height of the last seller’s market.
Prices. Even with this continued strength in buyer demand, though, single.family prices were down across the board: falling almost 7% on average, over 4% at the median, and almost 3% in the price-per-square-foot. And we’ve now seen prices go down for over a year, with the rolling year average dropping almost 4%. What’s going on? We believe that buyer demand is stronger in the lower priced markets, changing the mix of properties sold. Indeed, the price appreciation in the condo and coop markets shows that entry-level demand is strong, which indicates that perhaps we’re also seeing strong demand at the lower price points for single.family homes. We’re just not seeing the same level of activity in the higher priced markets, which is pushing overall pricing averages down.
Inventory. Indeed, the level of inventory available supports the idea that buyer demand is simply stronger at the entry level market. While inventory for single.family homes was relatively flat, we saw another drop in the number of condos and coops available. In other words, the lower end market is sizzling, while the upper end market is more lukewarm.
Negotiability. The negotiability indicators were a bit mixed. The days on market fell significantly, dropping to about six months for all property types. The listing retention rate was basically flat, though, indicating that sellers have not yet taken a commanding negotiating position with buyers.
Going forward, even with the current downward trend in pricing, we believe that the Westchester market is poised for a robust spring market. With inventory at a 10-year low, prices still at attractive levels, interest rates near historic lows, and a generally improving economy, we expect that the strength in the lower end of the market will 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.
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 Westchester Real Estate Market?: The Rand Quarterly Market Report for 2015Q4
Westchester activity surged in the fourth quarter, with sales up sharply for both single-family homes and condominiums, even while prices remained stubbornly soft.
Sales. Residential rose sharply, up over 13% from last year and finishing the calendar year up almost 8%. We’ve now seen sustained sales growth for four full years, with year-on-year transactions going up in 15 out of the last 17 quarters. For the 2015 year, Westchester closed over 5,700
single-family homes, the highest calendar year total since 2005, at the height of the seller’s market.
Prices. Even with these higher levels of activity, prices were down across the board, finishing a year in which the average price dropped over 3%. While that was disappointing to Westchester homeowners, we note that prices got a little ahead of themselves in 2014, spiking 7% in one year, and the average price is still about 4% higher than it was in 2013.
Negotiability. Although the days-on-market and listing retention rates were basically flat for the quarter and the year, we did see a sharp decline in inventory levels, with the “months-of-inventory” level falling to 5.1 in the quarter and 7.1 for the rolling year – the lowest levels we have seen in over ten years. (In comparison, we had over 17 months of inventory in the middle of 2009, at the bottom of the market).
Condos & Coops. Activity in the condo and coop markets were both strong, with sales up sharply but prices down. Inventory levels have really dropped for this entry-level market, though, with condos falling all the way to 3.9 months of inventory.
Going forward, we believe that the Westchester market is poised to transition to a full-blown seller’s market in 2016, with inventory at 10-year lows driving meaningful price appreciation through what will be a robust spring 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.
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.
