Hudson Valley Home Sales Market Entered Coronavirus Crisis with Strong Demand
John Jordan | April 2020
WHITE PLAINS—The Novel Coronavirus has all but put the Hudson Valley real estate market “on pause” with Realtors forced since March 22 to navigate a myriad of regulations, including virtual showings only, to close residential transactions.
A recently released report by OneKey Multiple Listing Service indicated that the market area of the Hudson Gateway Association of Realtors entered the pandemic that took hold in March on a very strong note, with mostly higher sales and higher sale prices.
Westchester County experienced a 7.2% increase in single-family home sales with 1,055 sales compared with 984 sales in the first quarter of 2019. Rockland County had an increase of 15% with sales of 452 units compared to 393 units in the first quarter of 2019. Putnam County sales were up 8.7% at 224, Sullivan County single-family sales rose 6.1% to 209 units and Bronx County (not officially a OneKey service area) had an increase of 6% at 123 single-family unit sales. Orange County sales dropped 3.5% to 737 sales from 764 sales in the first quarter of 2019.
The first quarter median sales price for single-family homes was higher in all counties as compared to a year earlier. Orange County’s median sales price saw an 11.2% increase going from $250,00 in the first quarter of 2019 to $277,900 in the first quarter of this year. The median sales price increased by 6.7% to $640,000 in Westchester, 2.4% to $335,00 in Putnam, 3.1% to $459,00 in Rockland; 25.8% to $163,500 in Sullivan and 7.8% to $520,000 in Bronx County.
Condominium unit sales did not fare as well as the single-family sector with the exception of Putnam County where sales rose to 33 units from 24 in 2019 (up 37.5%) and Bronx County where sales increased to 44 units from 34 in 2019 (up 29.4%). Orange saw sales of 86 units were down from 117 a year earlier and Westchester at 233 units was down from 258 units in 2019.
The median price of a condominium unit in Westchester rose 8.3% in the first quarter of 2020 to $390,000. as compared to 12 months earlier. The median price for a condo in Rockland shot up 8.1% during the same period to $254,000, while Putnam’s condo median rose 15.7% in the first quarter to $251,000. The median price for a condo unit in Orange County shot up 7.1% to $182,000.
Westchester registered a decline in sales in its co-op market with 378 units sold compared to 448 units in the first quarter of 2019. The median price of a co-op unit in Westchester rose 3.3% to $175,500 from $169,950 in the first quarter of 2019.
In recently released market reports by a number of area brokerage firms, all agreed that demand for residential housing in the region was strong throughout the market area. However, beginning on March 22 when Gov. Andrew Cuomo’s Executive Order putting the state on pause went into effect, the pace of sales has slowed considerably. Most brokerage firms say the degree of economic impact the pandemic will cause will depend upon the length of time the restrictions on how real estate sales can be conducted are in place.
A glimmer of hope emerged on Monday, April 13 when New York Gov. Andrew Cuomo and the governors of Connecticut, Pennsylvania, New Jersey, Delaware and Rhode Island agreed to the formation of a regional council to study how to restore the economy and get people back to work. President Donald Trump has stated that the federal government has the power to order states to reopen businesses and has been pondering whether some form of restart of the national economy could take place by May 1.
HGAR President Gail Fattizzi said the market was off to a “roaring start” until the onset of the COVID-19 crisis. She noted, “Without a crystal ball, and no historical perspective on a global shutdown of this magnitude, we can only base our market predictions for the rest of the year on what we saw prior to the crisis, and factors we believe will be in place.”
She said the impacts caused by the pandemic will likely depend on the duration of the crisis. The longer it goes on, the more impact on the overall economy, including employment, household wealth and consumer confidence, Fattizzi noted.
“I do believe there will be many sellers ready to sell, and healthy buyer demand for suburban and even rural properties when we emerge on the other side of this that will fuel a strong comeback of the market in the latter part of the year,” Fattizzi predicted. “Both sellers and potential buyers are sitting home right now pondering whether the property and location they’re in now is where they want to be for the long-term.”
In a report authored by Houlihan Lawrence Chairman Stephen Meyers and President and CEO Liz Nunan, the brokerage firm described first quarter sales as strong in most of the communities it services, but noted that closed sales are a lagging indicator and reflect market sentiment and activity during the fourth quarter of 2019.
Pending sales, those scheduled to close in the next 30 to 90 days, are a leading indicator and are more indicative of what can be expected in the future.
“Unlike service businesses that can never recoup their losses—restaurants cannot regain their losses at a later date—real estate transactions may be delayed, but pent up demand can level out much of the decline we will experience over the next three to six months,” Houlihan Lawrence stated in its first quarter report.
Joseph Rand, managing partner of Better Homes and Gardens Rand Realty, agreed that prior to the onset of the pandemic, the real estate market was thriving, overcoming the lingering suppressive effects of the SALT Cap.
“Sales were up. Prices were up,” he said. “And all the economic indicators were positive: rates were near historic lows, unemployment was down near a historic low, the economy was strong, and prices were still pretty attractive given that they were still near 2004 levels.”
While the pause ordered by the governor will have its impacts on the economy, Rand stressed, “We should all be clear that the Essential Services Order was a smart decision by the governor, really the only decision that the governor could have made. This is a public health emergency, and the most important consideration any of us should have is preserving the life and safety of ourselves, our families, and our fellow citizens.”
He noted that despite the restrictions, title companies, attorneys and others in the sale process have been creative to close deals without access to municipal files, village halls or conventional closing rooms. One example of that creativity Rand noted was one Orange County attorney who has set up a “closing tent” on his office building lawn with dividers to allow buyers and sellers to maintain distance.
Looking forward to the second quarter, Rand believes that the threat of the Coronavirus will keep some people home and the deterioration in the economy will reduce home buyer demand.
He noted that there has been a reduction in listings and closings due to the pandemic. Rand estimates that closed business in the second quarter will be down approximately 40% from the same period in 2019 assuming that title companies and attorneys can continue to close transactions that are in the pipeline.
“To put that in perspective the largest regional year-over-year decline in transactions on record is from the first quarter of 2008, when sales were down 30%,” Rand noted. “This will likely be worse, simply because we’re not going to be feeding the front end of the sales cycle with new listings in April and maybe through May.”