Report: Mixed Results for Luxury Home Sales in 2022 for Markets North of NYC
Real Estate In-Depth | January 5, 2023
RYE BROOK—The luxury real estate market north of New York City ended 2022 with mixed results as luxury sales in Westchester, Putnam and Duchess counties were largely unchanged while Greenwich, Darien and New Canaan posted sharp declines, according to the Houlihan Lawrence Luxury Q4 Market Report released on Jan. 5.
According to the report, Westchester (unit sales $2 million and higher) showed a slight uptick in closed sales in 2022, making it the only area north of New York City to exceed 2021 sales. Westchester performed solidly in the lower end of the market (below $5 million) and sales in the higher end dipped by nearly 20%. In a rare bright spot for buyers, inventory is building in Northern Westchester and pended sales are down, the report stated.
The story in Putnam and Dutchess counties is unchanged from last year. Pending sales are down significantly, and first quarter sales will likely land in negative territory.
“These longer-commute-time markets became the darling of New York City buyers seeking low-density areas during the height of the COVID boom, when work from home seemed here to stay. Now, pressure from employers to return to the office, lay-offs at technology companies, and smaller Wall Street bonuses may temper this once white-hot market,” said Anthony P. Cutugno, Sr. Vice President, Private Brokerage of Houlihan Lawrence.
Luxury markets in Greenwich (unit sales $3 million and higher) and New Canaan and Darien (unit sales $2 million and higher), saw sales declines in the double digits, Houlihan Lawrence officials stated.
“At first glance, the logical conclusion is a slowdown in the luxury market. However, the data suggest strong buyer demand in a sharply supply-constrained market. Homes are selling faster at closer to list price at a higher average price per-square-foot than last year. Persistent inventory shortage keeps demand high as the scarcity principle kicks in,” said Cutugno.
Cutugno said the supply issue will not correct itself anytime soon, noting that in the luxury market rising interest rates have a greater impact on sellers than buyers. He said many homeowners who want to sell are unwilling to give up a low-rate mortgage to purchase a new home at higher rate in a tight market. Consequently, they decide to hold on to their house and wait for more favorable conditions, fueling the imbalance in the market.
“The market is admittedly complicated. The first half of 2023 will likely see a decline in sales north of New York City, though even a sharp drop does not mean the market is collapsing,” said Cutugno. He explained that the past two years of luxury sales in Westchester are about equal to the aggregate homes sold in 2016, 2017, 2018, and 2019. “Perhaps 2023 will recalibrate our expectations of a healthy real estate market as the shadow of the pandemic recedes,” he added.
2022 MARKETS AT A GLANCE (2022 vs 2021)
Westchester County Luxury Home Sales /$2M and Higher
Homes Sold: Up 3.2%
Median Sale Price: Up 0.6%
Highest Sale Price Q4: $10,250,000 Rye Neck
Putnam and Dutchess County Luxury Home Sales /$1M and Higher
Homes Sold: Down 2%
Median Sale Price: Down 9.4%
Highest Sale Price Putnam Q4: $1,775,000 Carmel
Highest Sale Price Dutchess Q4: $4,000,000 Washington
Greenwich Luxury Home Sales /$3M and Higher
Homes Sold: Down 30.4%
Median Sale Price: Up 4.8%
Highest Sale Price Q4: $11,193,132
Darien Luxury Home Sales /$2M and Higher
Homes Sold: Down 24.8%
Median Sale Price: Down 1%
Highest Sale Price Q4: $7,100,000
Rowayton Luxury Home Sales /$2M and Higher
Homes Sold: Down 34.4%
Median Sale Price: Up 16.1%
New Canaan Home Sales /$2M and Higher
Homes Sold: Down 28.7%
Median Sale Price: Up 1.1%
Highest Sale Price Q4: $4,945,000