Hudson Valley Home Sales Market Shows Signs of Recovery from SALT Cap
John Jordan | October 2019
WHITE PLAINS—The residential home sales market in the Hudson Valley showed some surprising resilience in the third quarter. While some real estate analysts had predicted home sales would likely soften in the latter part of 2019, home sales in fact increased in a majority of the region.
According to the “2019 THIRD QUARTER RESIDENTIAL REAL ESTATE SALES REPORT Westchester, Putnam, Rockland, Orange, Sullivan Counties, New York” released earlier this month by the Hudson Gateway Multiple Listing Service, Inc., overall sales were higher in Putnam County by 6.0%; Rockland County’s sales were up 2.1%; Sullivan County’s home sales were 1.8% above the third quarter of last year, while Orange County sales edged up 1.5%. Overall home sales in Westchester County fell 1.6% in the third quarter.
A closer look at the Westchester County data showed that single-family home sales in the third quarter rose 1.0% and condominium sales ratcheted up by 3.2%. The drag on overall sales came from the cooperative sector, which saw a 16.5% decline in sales.
The median single-family home sales price increased in every market in the HGMLS service area with the exception of Rockland County, which saw the median single-family home price remain the same as the third quarter 2018 median of $475,000.
Editor’s Note: Full text of the HGMLS report and detailed data on the regional housing market, see the Hudson Valley Real Estate Report HERE.
Westchester County’s single-family median price rose 3% to $699,000; Putnam County’s single-family median increased 3.8% to $373,500; Orange County’s single-family median spiked 4.7% to $288,000, while Sullivan County’s single-family median price was 5.6% higher at $147,900.
While sales fell sharply for Westchester cooperatives, the median sale price of a co-op in Westchester rose 5.9% in the third quarter to $180,000. The condominium sector in Westchester sported a 2.0% increase in its median sale price to $399,750.
HGAR President Ron Garafalo said that home sales activity was solid in the Hudson Valley in the third quarter.
He said that sales activity and prices were up in most of the region, while the lack of available for-sale inventory remained an issue. Garafalo pointed to continued low interest rates as perhaps the key driver to the consistent strong buyer demand the region has seen this year.
Garafalo said that the SALT cap continues to be a factor in the residential market, particularly in the luxury sector.
“I think demand has remained strong,” he said. “I thought the third quarter might be a transition quarter where we might see things slow or ease a bit, but that didn’t happen. The market remained strong in terms of sales and prices.”
Outside of the residential sales market, Garafalo said that he expects the newly enacted rent reform and rent control laws to negatively affect the multifamily markets in the New York metro region going forward.
Brokerage network Westchester Real Estate in its third quarter market report was also bullish on the market based on stronger sales activity. “The sun was shining on the Westchester housing market this summer! Despite ancillary concerns about the economy, trade wars, tax law changes, and other related factors, the number of closed sales of single-family homes and prices both rose in the third quarter of the year,” Westchester Real Estate stated.
The Somers based network related that homes that hit the market in good condition generated all the buzz, and the offers! “Homes in need of a facelift, minor or major, struggled and languished. Price can compensate to some degree but often still doesn’t create a sale,” the report stated.
“Barring any major economic changes or unforeseen circumstances, the Westchester market should continue at a steady pace,” Westchester Real Estate stated in its quarterly report. “With baby boomers still representing a signiﬁcant number of existing homeowners, and seniors looking to age in place, inventory constraints will still affect the number of homes for sale, especially here in Westchester where there is little land to simply build new housing. Buyers can’t buy what isn’t for sale!”
Joseph Rand, managing partner, Better Homes and Gardens Rand Realty, said in his quarterly market report for the Hudson Valley that regionwide sales increased 3.4% in the third quarter, the first quarterly increase since the imposition of the SALT Cap. He added that the market may finally see the long-awaited recovery in the high-end market in Westchester, which enjoyed a 23% sales increase of homes priced at $3 million or more. The sales activity in this market segment was the highest quarterly total in four years, he noted.
With the higher-end starting to recover, Rand expects the overall Hudson Valley market will continue to strengthen through the fourth quarter and into 2020.
“Going forward, we believe that the market is poised to finish the year strong. Housing fundamentals are all positive: prices are still at attractive levels compared to the last seller’s market, interest rates are back down to historic lows, the economy is solid, and inventory remains relatively low,” Rand said. “Accordingly, we believe that strong demand will continue to grow, and that as the lingering effects of the SALT Cap dissipate, we will see more widespread price appreciation in the fourth quarter and into 2020.”
Houlihan Lawrence in its third quarter luxury market report for Westchester, Fairfield County, CT, Dutchess and Putnam counites, noted that the $3 million to $4.99 million price range in Westchester accounted for most of the gains in third quarter luxury sales.
“Inventory levels remain high. When sales slowed down the past several quarters, new listings came to market at a steady pace and inventory accumulated. The imbalance of supply and demand continues to put pressure on pricing. Pending sales north of New York City are holding steady compared to the same period last year—a positive indicator that sellers are listening to the market and pricing realistically,” said Anthony Cutugno, senior vice president, director of private brokerage for Houlihan Lawrence.
Nearly all closed properties in the third quarter in this price range were reduced from their original price—some had up to five reductions—and sold nearly 30% to 50% less than the original list price, the brokerage firm stated. Sales of homes priced more than $5 million followed a similar pattern of coming on the market at an unrealistically high asking price, and ultimately selling substantially below the original price.