Hudson Valley Home Sales Continue to Increase, But at Lower Rate
Real Estate In-Depth | January 2018
WHITE PLAINS—2017 proved to be another positive year for residential sales in the Hudson Valley following the remarkably strong sales of 2016. Participants in the Hudson Gateway Multiple Listing Service Inc., a subsidiary of the Hudson Gateway Association of Realtors, Inc., reported total residential sales of 18,854, which was a 4% increase in sales over 2016 sales of 18,161 residential units.
This was a slower pace than the 12.5% growth of 2016; an indication that sales may be reaching a more sustainable level or, in fact, may have been hampered by increasingly lower inventory levels.
The statistics were released by HGAR in its 2017 Annual And Fourth Quarter Real Estate Report for Westchester, Putnam, Rockland and Orange counties.
For the second year in a row, Orange County posted the highest sales gain as well as the most significant gain in median sales price. Sales of single-family residential units, by far the housing of choice in Orange County, went from 3,485 units in 2016 to 3,818 in 2017, an increase of 9.6%. Concomitantly, the median cost of a single-family home increased by 6.2% to $243,250 from $229,000 in 2016. Orange County experienced inordinate price appreciation in the years leading up to the housing recession and while unit sales have caught up to pre-recession numbers, the median price at $243,250 remains well below the 2007 median of $322,500.
Rockland County, the second best performing county, experienced a bump of 5.5% in single-family residential sales for the year, from 2,050 in 2016 to 2,163 in 2017 while also experiencing an increase in the median sales price of 3.5% to $440,000.
Westchester County saw a slight decrease (less than 1%) in single-family residential sales, but an increase of 3.1% in sales price to $642,000. Cooperative housing in Westchester showed no such weakness with co-op sales rising 7.9% to 2,033 units (from 1,884 in 2016). Co-ops remain an affordable alternative for Westchester.
Putnam County was the only county, in the four-county region, to experience a drop in sales of 6.8%. Nonetheless, multi-family housing sales in Putnam increased by 4.3%. Multi-family housing (2-4 family homes) actually showed significant strength in all counties with increases in sales of 16.8% in Orange, 31.3% in Rockland, and 9.7% in Westchester.
While the Hudson Valley did see price increases across the board in the four-county region, single-family price increases, with the exception of Orange County at 6.2%, were in a sustainable 3% range. Ordinarily, this environment should bode well for buyers and sellers in 2018. The only immediate cloud on the horizon appears to be the low inventory levels being experienced in the entire market area. At year-end, inventory for Westchester was down 12.1%, Putnam was down 11.9%, Rockland down 17.9%, and Orange down 20.3%.
Another unknown factor is tax reform. At this point in time no one can really assess the impact of the recently passed federal tax laws, which may have a significant impact on real estate in states where homeowners regularly pay property taxes in excess of the $10,000 total deduction allowed for both property and state and local income taxes.
However, given the overall strength of the market during 2017, there is certainly reason for optimism that the momentum will carry over into 2018. Unemployment in the lower Hudson Valley continues to trend at historically low rates and recent modest incremental rate hikes by the Federal Reserve do not appear to be leading to dramatic increases in mortgage rates. There is also considerable multi-family development occurring in the region, which will hopefully spur prospective homeowners to relocate to the lower Hudson Valley.