Realtors Expect Continued Strong Housing Market in 2022
John Jordan | January 20, 2022
WHITE PLAINS—After residential sales volume in the Hudson Gateway Association of Realtors’ market area reached historically high levels in 2021, brokers expect continued strong sales activity this year, although not at the feverish pace the industry enjoyed in the midst of the COVID-19 pandemic.
To say there are headwinds facing Realtors and consumers in 2022 would be an understatement, with the prospects for high inflation, rising mortgage interest rates, supply chain problems, the Omicron variant and very low for-sale inventories high on the list. At press time, infection rates statewide and in the Hudson Valley and New York City regions continue to fall daily from highs in the mid 20% rates, perhaps a sign that the worst of the Omicron variant is behind the region, although infection rates continue to climb in other parts of the nation.
HGAR and OneKey MLS recently released the 2021 Fourth Quarter and Annual Residential Real Estate Sales Report Westchester, Putnam, Rockland, Orange, Sullivan, and Bronx Counties, New York. The report noted that residential sales in all markets, with the exception of the Bronx, fell sharply in the fourth quarter as compared to the fourth quarter of 2020. While sales in the Bronx shot up 39.8%, activity in Rockland County fell 10.8%, followed by a 15% drop in sales volume in Westchester County. Orange, Sullivan and Putnam counties saw home sales declines of 15.2%, 18.4% and 25.2% respectively.
The drop off in sales in the fourth quarter was an anomaly for all markets for the year. All posted sizable sales increases for the year as compared to 2020. Bronx County had the largest percentage increase in residential sales at 61.4% year-over-year with 2,553 units sold as compared to 1,582 sales for 2020. Rockland County led the northern counties with an increase of 19.3% (3,631 units compared to 3,044 units in 2020); Westchester, a close second, posted 19.1% increase (11,855 units compared to 9,955 units for 2020); followed by Orange County with a 16% increase (5,406 residential sales compared to 4,662 sales in 2020); Putnam experienced a 10.6% increase over 2020 (1,605 units compared to 1,451) and Sullivan County had a 9.6% increase for 2021 (1,393 compared to 1,271 in 2020).
For perspective, the HGAR/OneKey MLS report noted that while there were significant decreases in the number of residential sales in all counties, except the Bronx, when comparing the 2021 fourth quarter to the 2020 fourth quarter sales, it is important to remember that the fourth quarter 2020 sales were fueled by a surge in buying activity in the second half of 2020 once COVID-19 restrictions were lifted. The report concluded that, “A more realistic comparison would be to the fourth quarters of 2019 and 2018, and the 2021 fourth quarter residential sales numbers were significantly higher than either of those two years.”
The migration of New York City residents to the Hudson Valley fueled sales activity as well as increases in the median sale price in all markets. The median price of a single-family residence in Bronx County increased 8.5% to $575,000. The largest percentage price increase for a single-family home occurred in Sullivan County with a 25.3% increase to $244,400 from $195,000 in 2020. Westchester County saw a 6.1% increase in its median price for the year ($780,000 as compared to $735,000 in 2020) and actually experienced a slight decrease (-0.8%) in median price for the fourth quarter.
Orange County single-family median price year-over-year rose 16.5% ($367,000 compared to $315,000 in 2020), while Rockland County’s single-family median sale price increased 12% to $560,000 (from $500,00 in 2020). Putnam County saw its single-family median price rise 15.8% to $440,000 (from $380,000 in 2020) for the year.
A persistent problem for the suburban New York markets has been low inventory, which has resulted in intense competition for quality listings and multiple bids. According to the HGAR/OneKey MLS report, inventory (for all types of housing) at the end of 2021 fell 53.5% in Rockland; 28.8% in Westchester; 31.4% in Orange; 27.2% and 13.0% in Putnam. Inventory in the Bronx increased 4.8%. Editor’s Note: For the full HGAR/OneKey MLS report, go to pages 6, 7 and 8 in the second section of the newspaper.
HGAR President Anthony Domathoti said there was a slowing of sales in the HGAR market region, with the exception of the Bronx, in the fourth quarter. He believes that the migration out of New York City may be at an end.
He said that buyers are now returning to Manhattan and the outer boroughs. “So, it is the return of the buyer to the New York City market that is writing the narrative for the fourth quarter of 2021,” he said.
Domathoti, who is Broker-Owner of EXIT Realty Premium in the Bronx, pointed out the tremendous sales surge in the Bronx in 2021 with a nearly 62% increase in activity, including a nearly 46% spike in single-family home sales.
Domathoti believes that while conditions are still good for sellers, the rate of home price increases in the suburban markets are not sustainable.
“The economy continues to improve, which is good for real estate, but at the same time the price increases in 2022 will be moderate. It will not be like what happened in 2021.”
Brokerage firm Houlihan Lawrence in its fourth quarter report stated that the low supply of listings led to a natural decline in the number of sales in the suburban markets in the fourth quarter of last year.
“While the first half of 2021 varied in specific metrics to the second half, two factors remained constant. The inventory was at an all-time low, and buyer demand was exceptionally strong. As the year progressed, the sales outpaced inventory replacement, and this further restriction led to a decline in pending sales and, eventually, closed sales,” said Houlihan Lawrence President and CEO Liz Nunan.
She continued. “2022 will likely not see the record-breaking number of sales seen in 2021. But until the supply and demand fall into balance, the market will still be charged with buyers, and sellers will continue to prosper.”
Anthony P. Cutugno, Senior Vice President, Director of Private Brokerage for Houlihan Lawrence, speaking on the luxury market said that like the conventional home sales market, the fourth quarter saw lower luxury sales in the region.
“As the supply of luxury homes declined to historic lows, closed sales cooled down—every luxury market registered double-digit declines this quarter. Homebuyers are not retreating, but their desire and ability to purchase a new home are often thwarted by shrinking supply. Looking forward, pending sales are down at year’s end; robust gains of 2021 will likely taper off in 2022,” he said.
While sales fell in the fourth quarter, Leah Caro, Broker-Owner of Park Sterling Realty in Bronxville, said that two weeks into January 2022—normally a slow time for the housing market— the market continues to be busy with buyers searching for homes in Westchester County.
Caro, who was a guest on the Building and Realty Institute of Westchester’s “Building Knowledge” radio program on Jan. 14, said that in terms of the 2022 housing market, “I think interest rates will tick up slightly. I don’t think that will be something that will drive people out of the buying marketplace.”
She believes that the rise in inflation rates will stabilize later this year and the federal government and hopes others need to address supply chain issues and other market forces that are preventing people from getting back to work or taking on new jobs.
With millions now receiving the COVID vaccine and boosters, Caro is hopeful that the worst of the pandemic is in the rear-view mirror. “We are definitely in for some adjustments and some changes (in 2022) but I am super optimistic, but I always am,” she said.