Hudson Valley Homes Sales Soar in Fourth Quarter
John Jordan | January 2016
Prices Continue to Stabilize
WHITE PLAINS—During the recession, Realtors in the Hudson Valley had to deal with the bad market that featured little sales activity and prices in free-fall. Today, conditions are much different, but Realtors now face dealing with both the good and the bad. The good is a robust sales market, the bad is a rather lackluster recovery in sale prices.
The Hudson Valley home sales market is booming, with strong sales in all four counties. However, sale prices continue to lag the sales recovery, either staying relatively flat or continuing to decrease in some markets.
According to the 2015 Annual and Fourth Quarter Real Estate Sales Report released earlier this month by the Hudson Gateway Multiple Listing Service, Inc., home sales throughout the four county-HGMS region (Westchester, Putnam, Rockland and Orange counties) exceed 15,000 sales for the year, a level last seen in the pre-recession years of 2006 and 2007.
Orange County led the way in sales for 2015, sporting a hefty 25.7% increase, followed by Putnam County with a 19.4% rise in home sales as compared to 2014. Coming in third with a very respectable 15.6% increase in home sales was Rockland County, while Westchester County registered a 9.2% increase in sales in 2015.
Home sales values continued to tread water in 2015. The single-family home price in Westchester fell 1% for the year to $628,875, although the 2015 value was significantly higher than the $586,500 price posted at year’s-end 2012. Putnam County’s single-family home price at year’s-end 2015 was flat at $310,000 as compared to the year before. Rockland’s single-family home sales price at the end of 2015 was 3.8% higher than 12 months earlier at $415,000. Orange County, while sporting the crown for tops in sales volume, once again posted a decrease in the sales price of a single-family home, closing 2015 at $244,667, a 3.2% drop from the end of 2014.
Editor’s Note: The full home sales HGMLS annual and fourth sales report and statistics appear beginning on page 25 in this edition of Real Estate In-Depth.
Joseph Rand, managing partner of Better Homes and Gardens Rand Realty, said in a telephone interview that he titled his firm’s fourth quarter home sales report as “Welcome to the Seller’s Market.”
“To me this is the beginning of the change. We are now through a period that the market has been transitioning. We have had four years of increasing sales that have not moved pricing. It takes time for changes in buyer behavior to start driving pricing changes and I think we are at the point we are going to see some meaningful price appreciation across the region, principally emanating out of Westchester.” he said.
Rand added that he expects Rockland will also experience price appreciation to be followed by Putnam, while Orange County pricing will stabilize and perhaps increase later on, perhaps as early as late 2016.
“Right now the only market that I think has definitively moved into a ‘seller’s market’ is Westchester,” he said. One major reason for that is the for-sale inventory in Westchester is at or about six months, which should put upward pressure on pricing.
Rand theorized that the price decline in Westchester may be at least partially attributed to the strong sales market in the $400,000-$600,000 range and weakness in the high-end market, particularly in the $3-million and up luxury market. He said the $400,00-$600,000 market was also strong in Rockland County, but those sales in fact put upward pressure on the average sale price there in 2015.
Based on activity thus far in 2016, he believes that sector of the housing market continues to be strong in Westchester and Rockland counties.
In terms of Orange County, Rand said the county continues to post strong sales volume; in fact it has posted sales gains over the past four years. Last year, he said that Orange County recorded the most home sales since 2006. However, the county continues to have to deal with the high level of distressed properties.
“The hottest sector in the region is Westchester condos,” he said, noting that with the condo sector having just a four-month inventory for sale, condo sale prices should rise in 2016.
Rob Vannucchi, executive vice president, Connecticut and Westchester for Douglas Elliman Real Estate, said that the residential sales market continued its rather torrid sales pace in the fourth quarter and that prices continued to be stable.
He attributed the robust sales market to a strong regional economy as well as rising residential prices in New York City, which is making the Westchester County market more attractive and affordable. He said that activity is more keen in the middle-priced sector where there is less inventory and weaker in the luxury market where inventory levels are higher.
In Douglas Elliman’s quarterly report on the Westchester County market authored by Jonathan Miler of Miller Samuel Real Estate Appraisers, the firm noted the softness in the luxury home sales market.
“Sellers of luxury single-family homes continued to be anchored to the previous market peak and remained out of sync with fourth quarter market conditions,” Miller wrote. The report stated that the absorption rate for luxury homes was 13.3 months at year’s-end, as compared to the overall market average of just 4.7 months.
Vannucchi said that low inventory is becoming an issue in Westchester County and that it is possible that if conditions remain the same, the average sale price could rise in the future. At present, the southern sections of the county, including Scarsdale and White Plains, are posting the strongest sales volume.
He said that based on current volume and the fact that the residential market continues to be very strong, he is optimistic the county will continue to see strong sales in 2016.
Chris Scibelli, Broker-Owner of Keller Williams Realty of Highland Mills, said that sales volume is very strong, but predicted that Orange County is far from any measurable price appreciation.
“The main driver to that is we are still working through a number of distressed properties, which are hanging over the market,” he said. When asked if he believed the market had made a dent in the amount of distressed properties that exist in Orange County, he responded, “No, I still think we have another four years of this stuff to go through.”
He said the market still has to deal with whatever comes on the market from homebuyers from 2005-2008 who are now under water in value and may be considering selling their homes.
Sales volume will continue to be strong in 2017. However, Scibelli said that he expects prices will fall by a small amount again in 2016 and will then begin to stabilize in 2017 and stay flat for a few years after that. Only thereafter, does he see price appreciation in Orange County.
He stressed that he is bullish on Orange County’s residential market and economy in the long term. “From a growth perspective I believe there is a lot more upside coming down the pike in Orange County,” Scibelli said. “But it won’t be tomorrow, it won’t be next year, it will be four to five years from now.”