Hudson Valley Home Sales Spike Sharply in Second Qtr.
John Jordan | July 2015
WHITE PLAINS—Strong buyer demand in the second quarter fueled a substantial increase in home sales in the four-county Hudson Gateway Association of Realtors market area, particularly in Orange County. The home sales recovery continued in the region with the only caveat being that home sale prices struggled in most counties in the region over the past three months.
However, some would argue that the lack of significant price escalation was the icing on the cake for a very healthy residential real estate sales market that will continue to see strong buyer demand fueled in part by a strong economy and near record low mortgage interest rates.
All four counties in the HGAR region enjoyed double-digit percentage sales gains in the last three months from the same period last year. Orange County led the way with a 30.4% rise in home sales, followed by Putnam with a 12.3% increase, Westchester sported an 11.4% spike and Rockland County boasted an 11.2% surge in sales.
Overall home sales region-wide were nearly 15% higher than a year ago and on a year-to-year basis the 6,460 home sales by mid-year were 12.4% above the same period in 2014, according to the second quarter residential sales report released earlier this month by the Hudson Gateway Multiple Listing Service, a subsidiary of the Hudson Gateway Association of Realtors, Inc.
The report and accompanying charts, which appear on pages 13 and 14 in this edition of Real Estate In-Depth, indicate continued sales momentum in the region as sales in the first quarter of this year were an impressive 12.1% higher than the same period in 2014.
However, sales values struggled overall with Orange County posting a nearly 10% decline in the value of a single-family house to $209,950, Westchester posted a modest 1.4% increase to $660,500, Putnam’s single-family median price was just 1.5% higher than the previous quarter at $289,500, while Rockland County’s median was relatively flat at $410,000, which was 0.3% higher than the previous quarter.
Barry Graziano, Chappaqua-Armonk brokerage manager for Houlihan Lawrence, told Real Estate In-Depth that sales were strong in Northern Westchester. For example, Chappaqua enjoyed a 54% increase in home sales in the second quarter as compared to a year earlier. By mid-year in Chappaqua, year-over-year sales were 68% higher than mid-year 2014. Prices in Chappaqua were down 11% in the second quarter from the previous year and 7% lower year-over-year. He said the sweet spot in terms of pricing is $1.5 million and under. Of the 134 sales in Chappaqua, 90 were homes that sold under $1 million.
Graziano termed the sales market in northern Westchester as brisk, but said the current sales environment is different than other robust markets in that buyers today are taking their time making a purchase. “They are being more methodical about their choices and decisions and they are really holding out for a home that they love as opposed to just buying to buy,” he said.
The veteran Realtor is bullish on the remainder of this year. “Our spring market started a little later this year,” Graziano said. “While we are in July it still feels like the spring market. It still feels like there are new buyers coming to the table. It still feels like there is a spring vibe with new listings coming on the market and there is still a brisk pace going on in New Castle and even North Castle area.”
He added that while he expects the normal slowdown in sales during the month of August, Graziano predicts sales momentum will pick up in the fall.
2015 HGAR President Drew Kessler, a Realtor doing business in Rockland County and a mortgage company executive in the region, said that market conditions have improved region-wide. Kessler, who previously has expressed concern over the quality and quantity of residential for-sale inventory was pleased that all counties with the exception of Westchester saw increases in inventory in the second quarter.
Kessler said that buyer demand is high, particularly for the lower-priced homes where a sense of urgency is more prevalent due to the prospect of interest rate hikes later this year. He added that quality inventory is selling fast and in many cases fueling bidding wars at every price point.
“If it is the right property and the work is relatively done, buyers are being aggressive,” he said. Kessler believes that demand will continue to be high as more and more prospective buyers will jump off the fence to avoid what many expect will be increases in mortgage interest rates later this year.
Joseph Rand, managing partner of Better Homes and Gardens Rand Realty, said that while sales activity has been intense in Orange County, the falloff in home values by about 10% is perplexing. He wonders if there has been a shift in buying preference to the entry level home in Orange County. In addition, the drop in home prices may also be a sign that the county is making strides in reducing its distressed housing stock. He said the rest of the three-county market area saw higher demand in the second quarter and he expects similar conditions to continue in the third quarter.
“My sense is that in looking at our numbers that it was a very strong second quarter in terms of new contracts so I think we will have a very robust third quarter in closings,” Rand said. “We will see what happens with prices.” He later added, “If sales continue to go up, prices will go up, it is just a matter of time,” he said.
Rand compared the current home sales environment in the HGAR territory to the 1998-1999 market. “We are looking at the beginning of a cycle that will take us over the next five years of sustained sales increases,” he theorized.
Roberto Vannucchi, newly appointed executive vice president, Connecticut and Westchester County for Douglas Elliman, said the trends that the brokerage firm has seen for some time continue to play a role in the market—for-sale inventory remains low in many markets and communities closer to New York City are seeing the strongest sales activity
“The communities north of I-287 are the best kept secret because there are unbelievable buys to be had in those communities,” he said.
Looking ahead, Vannucchi believes that the strong New York City residential market will continue to benefit Westchester County in the months ahead.
“I think buyer interest will continue to be strong and quite frankly will even heighten as people move out of the city,” he said. “New York City and even Brooklyn are hotter than ever, people are being priced out of those markets and Westchester is (therefore) attractive for many reasons.”