Slowing Fourth Quarter Sales Did Not Derail Record 2021 Housing Market
Real Estate In-Depth | January 4, 2022
WHITE PLAINS—Residential sales in 2021 in the counties served by OneKey MLS, Inc. reached a historic peak. This, despite a slowing of sales in the fourth quarter in all areas served by OneKey MLS with the exception of Bronx County.
Arguably, some of the slowdown can be attributed to the dearth of inventory in the counties north of New York City, while the “Bronx Tale” is more closely aligned to a return of buyers to the New York City market.
While the view of the market in terms of units sold and dollar volume is a positive one, it was a frustrating arena for many buyers who lost homes to higher bidders and for the practitioners dealing with client frustration and disappointment.
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. Total residential sales in the counties to the north were more in line with each other with Rockland County leading the group with an increase of 19.3% (3,631 units compared to 3,044 units in 2020); Westchester, a close second at 19.1% (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).
Sales of single-family residential units increased across the board with Bronx County sales increasing an eye-opening 45.8% (716 units vs. 491 units for 2020). 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. Notably, Westchester County, with the highest prices in the region, had the smallest percentage increase in median price for the year at 6.1% ($780,000 as compared to $735,000 in 2020) and actually experienced a slight decrease (-0.8%) in median price for the fourth quarter. This may be indicative of price increases beginning to moderate.
Orange County has seen consistent increases in the single-family median price with a year-over-year increase of 16.5% ($367,000 compared to $315,000 in 2020). Orange County single-family home sales increased by 11.2 % for the year to 4,444 units (compared to 3,996 in 2020) despite a drop of 20.7% in the fourth quarter.
In Rockland County the single-family median sale price increased 12% to $560,000 (from $500,00 in 2020) and Putnam County saw its single-family median price rise 15.8% to $440,000 (from $380,000 in 2020).
In terms of percentages, condominium, multi-family (2-4 family), and in Westchester County, co-op sales as well, all outpaced the increases in single-family units and, in most instances, the percent of median price increase. In Westchester County, where co-op sales lagged in 2020, they increased 36.3% to 2,129 units (from 1,562 in 2020). Affordability is the most prevalent reason for these choices particularly in view of the price increases in single-family dwellings. For many suburban purchasers, condos and co-ops represent a means to build equity to purchase a single-family residence.
When focusing solely on the fourth quarter residential sales numbers, they reflect a return to the more typical seasonality in the market, which disappeared in the fourth quarter of 2021. 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. 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.
Indicators such as days on market were down significantly in all market areas. Homes selling close to or at list price and above list price were a relatively common event. Lack of inventory continues to be a problem with no meaningful resolution on the near horizon. With the Fed tightening monetary policy it is expected that mortgage rates will begin a steady rise in 2022. However, despite these headwinds, the real estate market in the New York City and greater suburban area, including the lower Hudson Valley, have shown remarkable resiliency in the last year and a half, and we expect a strong real estate market to continue into 2022.
With the exception of the second quarter of 2020, the real estate market has been an anomaly outperforming the economy. Sales and prices have enjoyed a trajectory which is likely unsustainable going forward, however the economy of the Hudson Valley continues to improve and grow more vibrant, which bodes well for real estate. It is likely that price increases will moderate and additional product will come on the market, which will sustain a strong market in the near term.
Data provided by OneKey MLS, one of the largest Realtor subscriber-based MLS’s in the country, dedicated to servicing more than 46,310 real estate professionals that serve Manhattan, Westchester, Putnam, Rockland, Orange, Sullivan, Nassau, Suffolk, Queens, Brooklyn, and the Bronx. OneKey MLS was formed in 2018, following the merger of the Hudson Gateway Multiple Listing Service and the Multiple Listing Service of Long Island.