Residential Home Sales Bull Market to Continue in 2018
John Jordan | January 24, 2018
WHITE PLAINS—The residential home sales market in the Hudson Valley remained robust in 2017, rising 4% over 2016’s sales totals. However, the rate of growth declined sharply from the 12.5% sales increase posted in 2016.
Realtors interviewed by Real Estate In-Depth believe that the positive sales momentum will continue in 2018, despite the expected impacts from the recently enacted federal tax reform law that includes a cap on property tax deductions of $10,000.
The Hudson Gateway Multiple Listing Service, Inc., recently released its full-year 2017 and fourth quarter sales report for the four-county HGAR region of Westchester, Rockland, Orange and Putnam counties. For the full year, the HGAR region posted a total of 18,854 residential sales.
Hudson Valley Home Sales Full Year 2017
County Change from 2016
Leah Caro, president and principal broker of Park Sterling Realty of Bronxville, said that one positive impact of the federal tax reform law will be an expected increase in inventory. The continued decline in available inventory has been a persistent problem over the past few years. At year-end 2017, for-sale inventory in Westchester was down 12.1%; Putnam was down 11.9%; Rockland down 17.9% and Orange down 20.3%.
Caro related that in 2017 some markets had depressed inventory levels, which led to bidding wars and properties selling at above asking price in many cases.
“I think that increased inventory at certain price points will be good for the marketplace because I think more people would have bought last year, but either got priced out in a bidding war or just couldn’t find a house to buy,” she said.
Caro believes that some empty nesters will decide to list their homes that have high property taxes in response to the federal tax reform law.
She said that one of the perks for an empty nester to hold onto their home has been the advantage of deducting their property taxes. “With that being so diminished, I think we are going to see some people say, ‘You know what it’s not really worth it for me to hold onto the house that I didn’t need already.’”
Caro added, “I think we are going to see a ton of empty nester inventory.” She believes that the federal tax reform law may cause some buyers in the short-term to hold off buying a home to gage its impact, but expects home sales in Westchester and the region to continue to be strong in 2018.
Joseph Rand, managing partner, Better Homes and Gardens Rand Realty, said the federal tax reform law is not beneficial to New York State homeowners. However, he believes the impacts of the legislation will not be dramatic on residential sales here due to the overall strength of the market at the moment.
“I don’t think we have had a better real estate market in 12 years to handle something like this than the one we are in now,” Rand said. “I think that in a market with a lot of problems with low inventory, we have a seller’s market and we have a lot of buyer demand, it can absorb this hit.”
He agrees with Caro and expects an increase in inventory due to the federal tax law change and noted that any trepidation to purchase by some buyers will have little effect on the heavy buyer demand at this time.
“I think the market can withstand the hit at this point,” Rand related. “If this happened five years ago I think it would have been a real problem. If it would have happened 10 years ago, it would have been a disaster.”