Hudson Valley Home Sales Market Remained Strong in 2018. Sales Slow Down, But Median Prices Continue to Rise in Region
John Jordan | January 2019
WHITE PLAINS—The Hudson Valley residential sales market remained strong in 2018, despite lower sales due mainly to a lack of available inventory.
In a report released earlier this month by the Hudson Gateway Multiple Listing Service, Inc., the overall five-county market serviced by HGMLS (Westchester, Rockland, Orange, Putnam and Sullivan counties) saw a 2.6% decline in sales from 2017 year-end totals.
Putnam, Bronx and Sullivan counties, enjoyed increases in residential sales in 2018 with Sullivan posting a 4.7% increase, followed by Putnam with 1.9% higher sales and Bronx County, which came in with a 1% increase in home sales.
For the year, Rockland County suffered an 8.5% decline in sales. Westchester County posted a 3.9% decrease in sales, while Orange County home sales were relatively flat in 2018 as compared to a year earlier with a 0.3% sales increase. Sullivan County’s home sales rose 4.7% in 2018, as compared to 2017.
HGMLS in its “2018 Annual and Fourth Quarter Residential Real Estate Sales Report for Westchester, Putnam, Rockland and Orange Counties, New York” report released on Jan. 9 cited a dearth of available inventory region-wide as a key driver to the lower sales numbers.
In correlation with the tried and true economic axiom of supply and demand, home prices in the entire region saw healthy gains with Westchester’s 2018 -year-end single-family median home sale price coming in at $650,000, an increase of 1.2% from a year earlier.
Rockland County posted a 4.5% increase in its median single-family home price at $460,000 as compared to year-end 2017. Putnam enjoyed a 3.7% increase in its single-family median price to $350,000 at year-end 2018, while Orange County sported a 6.4% increase in its median single-family home price to $258,600. Sullivan County saw an increase of 7.8% year-to-year, which propelled its single-family median sale price to $128,000.
Condominium sales in Westchester in 2018 fell 1.7% year-to-year, while the median price of a condo unit in the county was flat at $375,000. The co-op market also saw flat sales for the year. The median price for a co-op in Westchester was also nearly flat at $442,708.
Joseph Rand managing partner, Better Homes and Gardens Rand Realty, explained in his firm’s fourth quarter 2018 real estate market report for the Hudson Valley, that the tempered home sales in Westchester could be the result of high-end buyers’ displeasure with the SALT caps from the 2018 federal tax reform law.
“Unlike buyers in the entry-level condo and co-op markets, or in the lower-priced counties, Westchester luxury buyer are more likely to itemize their taxes, so they might be feeling the bite of the cap more acutely. This could be reducing demand at the higher-ends of the market, suppressing the price appreciation we are seeing in the rest of the region,” Rand said.
Both Rand and franchise brokerage network Westchester Real Estate, in its fourth quarter 2018 market report, were bullish for the most part on market conditions for 2019.
“Going forward, we believe the market is poised for growth,” Rand said. “Sales are falling mostly due to a lack of supply, not a lack of demand.” The firm noted that inventory levels are beginning to rise—almost 10% higher in the fourth quarter of 2018—which was the second straight quarter of inventory advances, after 25 straight quarterly declines.
“Ultimately, we believe that the region is still growing as a seller’s market,” Rand noted, “which should allow for both increases in sales and prices in what will be a robust spring market.”
Westchester Real Estate also noted that demand remains high in spite of lower sales volumes of late.
“As we enter the early days of January, well-priced homes hitting the market are already being scooped up by eager buyers who see value,” the firm stated in its quarterly report. “Buyers just testing the waters are abundant and are educating themselves so they’ll be primed and ready to make offers as we hit the height of the spring selling season in the second quarter.”
The firm noted that higher interest rates could affect the market, as could the SALT cap of $10,000 that may prompt some luxury homeowners to put their homes on the market for sale.
The brokerage firm network noted that while price gains may be slowing, this trend does not constitute depreciation, just a slower rate of growth—2%-3% as compared to the 5% the last few years.
“It’s equivalent to driving your car at 80 miles per hour and then slowing down to 60 miles per hour; 60 is still fast, but it feels much slower in comparison,” the report noted.