Realtors Believe Worst of Pandemic’s Impacts are Behind Us
John Jordan | July 2020
WHITE PLAINS—The second quarter home sales market in the Hudson Valley, dominated by restrictions to prevent the spread of the coronavirus in New York State, struggled mightily with sales activity down significantly.
Second quarter home sales, according to a recently released report by OneKey™ Multiple Listing Service LLC, were down anywhere from 39.8% in the Bronx; 27.9% and 27.4% in Orange and Westchester counties, to 6.2% lower in Putnam County, as compared to the second quarter of last year.
While the sales figures speak to the deep impacts COVID-19 have wrought on the region’s economy, brokerage executives credit the ingenuity, savviness and determination of agents to complete transactions during the lockdown in spite of restrictions imposed during Gov. Andrew Cuomo’s “New York on Pause” process. Agents were forced to conduct business online and show homes virtually. New York State permitted notary services online and attorneys conducted business in parking lots, in tents and between cars. The sales figures could have been much worse had it not been for the agents’ perseverance under trying and sometimes frustrating business conditions.
Although sales figures in the second quarter took a significant hit, real estate brokerage executives believe that since the home sales market entered the COVID-19 crisis on a strong note with plentiful demand, the industry could see a fairly rapid recovery if a second wave of the pandemic is prevented.
On March 7th, New York State Gov. Andrew Cuomo declared a state of emergency and as of March 20th all non-essential businesses were closed. Most of the COVID- restrictions on real estate were lifted when the Mid-Hudson region entered phase three of the four-phased reopening process on June 23. The Mid-Hudson entered phase four on July 7.
According to the 2020 Second Quarter Residential Real Estate Sales Report Westchester, Putnam, Rockland, Orange, Sullivan Counties, New York released on July 7, single-family residential sales, as compared to Q2-2019 in Putnam County were down 6.6%; Sullivan County posted 10.6% lower single-family home sales, while Westchester County’s single-family sector sales plunged 21.3%. Rounding out the painful figures, single-family homes in Rockland County fell 22.1% and Orange County single-family sales dropped 26.5% in the second quarter of this year.
While sales were down, the median sale price of single-family homes throughout the region, with the exception of Putnam County, were higher in the second quarter as compared to 12 months earlier. Sales prices increased 17.7% in Sullivan to $175,000; 6.7% in Rockland to $480,000; 12.5% in Orange to $298,000 and 1.2% in Westchester to $711,000. Putnam County registered a slight decrease of 1.1% in its median price. The median price in Putnam was $359,900 at the end of the second quarter of 2020 as compared to $365,000 one year ago.
The lower-priced condominium and cooperative markets were battered, suffering a 41.5% and 30.4% decline in sales in Westchester County in the second quarter. The median price of a condominium in the second quarter in Westchester County fell 2.3% to $391,000, while the median for a co op in the county rose 5.6% to $190,000. Editor’s Note: For the full OneKey™ MLS report and charts
HGAR President Gail Fattizzi said the market entered the pandemic on a strong note. Sales began to stall in March and hit their low mark in April, but enjoyed a quick turnaround in May once restrictions began to be lifted.
She points to a number of positive prevailing trends that could foster a recovery in coming months, including: strong buyer demand, a weak New York City market that includes some residents considering a move to the suburbs, as well as the quick rebound of the stock market.
Fattizzi, who is executive director of independent real estate brokerage network Westchester Real Estate Inc. of Somers, said looking forward, “The Westchester and Putnam markets will continue to be strong into the fall. Buyers should get their ducks in a row and be ready to come in with strong offers. They should also consider the fixer-uppers that others don’t want to tackle.”
She recommends, “Buy now, without all the competition, lock in a super low interest rate for 30 years on a renovation loan so the work is all financed, and create the house of your dreams. Sellers should prep their homes and get them on the market now…but keep pricing realistic—buyers are educated and understand value. Know that procedures for showings are still not ‘back to normal,’ that safety is still paramount, but the outcome is definitely worth the effort.”
Leah Caro, chairperson of OneKey™ Multiple Listing Service LLC, also praised agents during the lockdown for their ingenuity. During an interview on the radio program “Building Knowledge” presented by the Building and Realty Institute on WVOX, she said that sales along all market types should rise now that most COVID restrictions have been lifted and the industry has returned to a more normal sales environment.
She believes that one sector that should benefit from New York City residents considering a move to the suburbs is the cooperative market.
“Rents in the city are sky-high, Caro, who is President and Principal Broker of Park Sterling Realty of Bronxville, said. “Owning real estate is always cheaper than renting and a co-op is a great way to get your foot in the door for housing in Westchester.”
Caro also noted that very low mortgage interest rates should also fuel home sales in the region going forward. In addition, the expected increase in work-at-home policies, could spark additional activity in locations outside of Westchester’s cities.
Houlihan Lawrence in its second quarter report authored by Chairman Stephen Meyers and Liz Nunan, president and CEO, noted that agents had to adjust to the new normal during the pandemic.
“All parties involved in a real estate transaction scrambled to meet the demand, all while working virtually, within the guidelines issued by the state. Shortly thereafter came a huge wave of inquiries for short-term furnished rentals to start, soon morphing into single-family home inquiries with an emphasis on home offices and outdoor amenities. As the shutdown wore on, more and more of the workforce embraced working from home as a sustainable model, even if only for part of the time,” they stated.
They added that during the lockdown, many homeowners chose not to sell and opted to sit tight, not wanting to expose themselves to any possible health risks.” Residents in our area did not have the same urgency to flee that the residents of New York City did, in fact, quite the opposite. Thus, throughout Westchester, Putnam and Dutchess counties, inventory was down,” the report stated.
Meyers and Nunan concluded, “Second quarter data for 2020 is partly the result of an atypical event, a paradigm shift in the wants and needs of the buyers. But the market at the end of the quarter remains strong, and interest rates continue to drive the market forward. It remains to be seen if these trends continue long into the year.”
In terms of the region’s luxury market, Houlihan Lawrence indicates that inventory levels are low and pending sales are increasing in many markets. The lower end of the luxury market is gaining the most strength and buyers remain value driven, the brokerage firm’s second quarter report on the luxury market states.
“For now, it appears that the 2020 spring market, which coincided with the start of the shutdown, had a late start. Is this a moment in real estate, or a structural shift with long lasting implications? It is too soon to tell. Meaningful insights will be gleaned from third quarter closed sales data, reflecting much of the activity that began in earnest in May when the curve flattened,” said Anthony P. Cutugno, senior vice president, Houlihan Lawrence Private Brokerage.
Joseph Rand, managing principal and chief creative officer of Better Homes and Gardens Rand Realty, also offered high praise for agents and noted that any exodus by New York City residents to the suburbs will be just a short-term trend.
“My basic feeling is that it could have been a lot worse,” Rand said. “I really was surprised how robust the market was during the pandemic and we were able to sell homes at all.” He noted that at the onset of the coronavirus restrictions in March, the brokerage firm expected sales to be down 50% to 60%, instead of the approximately 25% sales decline in sales the region recorded in the second quarter.
Going forward and with the proviso that a second wave of COVID-19 does not hit the New York market, Rand believes that while closed sales in June and July will be lower than last year, activity will be strong and opens (new contracts) in June and July will be higher.
Rand noted that inventory levels region-wide remain very low and combined with strong demand, market conditions will be tight.
“I believe the sales rate in the third quarter will be much higher than the sales rate in the second quarter and the average sales rate for the past year,” Rand said. “I think we are going to have a huge closing rate of deals. Closings will be way up over the next few months.”
He added that current market conditions will result in agents having to deal with multiple offers and bidding wars on some listings going forward.