Hudson Valley Home Market Continues Healthy Sales Gains
John Jordan | October 2016
WHITE PLAINS–The third quarter in the four-county region of the Hudson Gateway Association of Realtors continued an all too familiar, albeit pleasant theme—continued strong sales volume and little price appreciation that might put the brakes on activity going forward.
According to the third quarter residential real estate sales report released recently by the Hudson Gateway Multiple Listing Service, Realtors in the HGAR market area of Westchester, Rockland, Orange and Putnam counties posted 5,644 closed residential sales of single-family houses, condominiums, cooperatives and 2-4 family properties, a 7% increase over 2015’s third quarter sales totals. 2016’s sales volume year-to-date is running about 15% higher than last year’s activity.
Three of the four HGAR counties posted double-digit sales increases in the third quarter: Orange County led the way at 19.2%, Putnam County followed with a 17.4% sales gain and Rockland County registered a 15.9% increase in sales. Westchester County posted a 1.4% rise in home sales in the fourth quarter.
The prolonged strong sales activity in the HGAR market area has cut into available inventory, the HGMLS report stated. In fact, for-sale inventory has fallen 20% from last year’s stock to 9,387 properties on the market for sale at the end of the third quarter of this year.
Pricing in the four-county region was mixed in the third quarter. The median sale price of a Westchester single-family house was $668,500 down 1.2% from last year. Condominium and cooperative prices fell by 0.3% to $372,000 for condos, and by 3.4% to $157,000 for co-ops in Westchester County.
The median sale price of a Putnam single-family house was $340,000, an increase of 1.5% from last year. The median sale price of a Rockland house was $429,000, up by 1% from last year. Orange’s median sale price for a single-family house reached $244,500, which was 2.2% higher than last year.
Real Estate In-Depth talked to some prominent Realtors in the region to get their respective takes on the current housing market and where they think home sales and prices are heading for the remainder of 2016 and into 2017.
Joseph Rand, managing partner, Better Homes and Gardens Rand Realty, related that the Hudson Valley has seen sustained sales growth for nearly five years with regional year-on-year sales rising 17 out of the last 19 quarters. The third quarter did show signs that the pace of sales might be slowing somewhat, since the third quarter sales volume was considerably lower than the rolling sales increase of nearly 17%, he noted.
“Going forward, we are hopeful that the market will close the year well. 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,” Rand said. “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.”
In its individual market assessments, BH&G Rand Realty stated in its third quarter market reports that each county’s fundamentals were strong and that it expected continued strong buyer demand and future price appreciation to start to take hold.
In Westchester County, Rand noted that “sellers seem to be gaining a little bit of negotiating leverage, with single-family home sellers now retaining over 98% of their last list price.” He added that homes in Westchester County are now selling in less than six months, which is relatively quick by historical standards. “If these trends continue, we would expect to see meaningful price appreciation soon,” he predicted.
Rand admitted that he had expected more significant price gains earlier. “I honestly thought prices would go up by now. But I think that buyers are still spooked by the memories of 2008, or they’re nervous about the election, and they’re unwilling to pull the trigger unless they feel like they’re getting a ‘deal.’ That might be why the pace of sales increases is slowing, even while inventory is falling,” Rand said.
However, he stressed that home values should rise in the near future. “At some point, something will cause the dam to break. Maybe relief at the election being over,” he theorized. “Maybe the looming Fed rate hike. Or maybe just the accumulation of thousands of individual decisions by buyers who just can’t wait any longer. But, if demand stays strong and inventory keeps falling, prices will start going up. My best guess—next summer we will start to see meaningful price appreciation.”
However, perhaps the most glowing review of the four HGAR counties, Rand reserved for Orange County, which until recently had lagged Westchester, Rockland and Putnam counties and was seeing its home values decrease markedly.
“Going forward, we believe that the Orange County housing market is looking at its best year since the height of the last seller’s market,” Rand said. “The fundamentals are strong: demand is high, prices are still attractive, interest rates are at historic lows, and the economy is generally improving. We expect a strong finish for the year, and meaningful price appreciation in 2017.”
2016 HGAR President Marcene Hedayati said the continued strong home sales and minimal price gains in Westchester County are clear indications of a healthy market. However, there are some headwinds going forward.
“I think that what we might start seeing, but we haven’t seen it yet, are sales starting to fall because we don’t have enough inventory to sell,” said Hedayati, who is Principal Broker/Owner of William Raveis Legends Realty Group in Hastings, Irvington and Tarrytown.
She said that sales are strong in all market sectors, with the exception of the luxury market, which in the Rivertowns would be homes priced from $1.2 million and higher. “The luxury market continues to be sluggish,” Hedayati related.
Demand overall is coming from all age groups, including the highly sought after Millennial demographic. She said the Rivertowns are seeing a good number of Brooklyn transplants who are searching for housing in Westchester because rising home values in Kings County are pricing them out of the market.
Chris Scibelli, Broker/Owner of Keller Williams Realty in Chester, said the home sales market in Orange County may have reached its peak. “I don’t see it duplicating this level, but I still see prospects for a strong year (in 2017),” he said.
However, current sales activity is showing some Orange County markets posting flat sales volume, while others are slowing down slightly. He also said that continued strong sales have cut into available inventory, which could put downward pressure on sales volume going forward.
Scibelli predicts home prices will stabilize and perhaps could go higher if conditions remain the same. “If the listings stay where they are or don’t grow, we may see some price appreciation.”