Home Sales Decline Continues in NYC-Hudson Valley Markets
John Jordan | October 20, 2022
WHITE PLAINS—Home sales continued to decline in the third quarter of this year as the New York City and Hudson Valley markets grapple with stubborn low inventory levels, high inflation, rising interest rates and home prices.
Overall home sales in the region fell in the fourth quarter of 2021 and now in the first three quarters of 2022. While some economists are predicting a likely recession in 2023 and Lawrence Yun, chief economist with the National Association of Realtors, said recently that the national housing industry is already in recession, brokers affiliated with the Hudson Gateway Association of Realtors indicate that the current market in the region is not anywhere near recessionary levels. They admit that home sales are down, but stress that transaction levels are lower as compared to the frenzied COVID-19 markets of 2020 and 2021. The chief culprits for the decline are low inventory and rising interest rates that are now approaching 7% and high inflation.
According to the 2022 Third Quarter Real Estate Sales Report for Westchester, Putnam, Rockland, Orange, Sullivan, and Bronx counties released by OneKey MLS earlier this month, all counties in the HGAR market suffered lower sales in the third quarter of 2022 as compared to a year earlier, with the exception of Sullivan County, which enjoyed a 2.9% increase in overall residential sales.
Overall home sales in the Bronx fell 2.5% in the third quarter of this year, followed by Rockland County’s 9.8% decline. Home sales in Putnam were 12.6% lower, Westchester saw a 13.5% drop and finally Orange County’s overall transactions slipped by 15.8%,
According to the OneKey MLS report, not all was bad news in the Bronx. Single-family home sales surged 9.2% in the borough over the third quarter of 2021. The median sales price of $630,000 was 6.8% ahead of last year. However, condo sales lagged from the previous third quarter.
Another area that bucked the downward trend was Sullivan County, which posted single-family sales of 300 transactions. The third quarter 2022 total was just slightly higher than the 298 total of the previous year and the median sales price was up more than 10% when compared to the third quarter of 2021.
In Westchester County, third quarter single-family home sales of 2,006 declined 15.6% compared to the third quarter of 2021. However, when compared to the third quarter of 2019, single-family home sales in Westchester were up 3.4%. Condo sales in Westchester for the third quarter of 2022 decreased by 24.5% and co-op sales were on par with the previous third quarter. The single-family median sale price of $872,000 posted a 2% increase over last year, the condo median sale price of $460,000 was slightly down, and the co-op median sale price of $204,500 was 2.3% higher than the previous year.
In Putnam County, the 326 single-family home sales were down 10.7% compared to the third quarter of 2021, but when compared to 2019, the number of sales were almost identical. The median sales price of $505,000 was 8.6% higher than the third quarter of 2021. Rockland County likewise experienced a drop in transactions, with single-family home sales down 9.2% and condo sales down 15.8%. However, when continuing the comparison to the third quarter of 2019, the 2022 third quarter numbers were slightly ahead. The single-family median sales price of $660,000 for the third quarter of 2022 in Rockland County was 14.2% higher than 2021.
In Orange County the third quarter single-family home sales total of 1,019 was down 14% over the 2021 third quarter, and the condo sales number of 138 was off an even steeper 23.3%. The single-family home median sales price was up 9.1% at $420,000 and the median condo sales price of $270,950 for the third quarter reflected a 13.4% increase over the 2021 third quarter. Editor’s Note: For the full OneKey MLS report and sales statistics
Leah Caro, president and principal broker of Park Sterling Realty of Bronxville, said there is a “crisis of availability and affordability” in the markets at the moment. The number of homes for sale continue to be low, she noted, which keeps the scales titled towards sellers rather than buyers.
She also said that while demand is still high, the fierce competition that existed for the past year-and-a-half has eased somewhat. “Instead of five or six or even 20 offers on a house, now we’ll see two,” Caro said. She also advised that sellers should price their homes fairly because consumers are now focused keenly on pricing due to higher interest rates and higher cost of living.
“Some folks who got squeezed out of the overheated market of last year are still looking for homes and some folks who were looking previously have taken a step back to get their financial house in order,” Caro said. “I would not call it a recession in the housing market by any stretch. But, we do really have a problem with inventory right now and I think that is the biggest thing dampening the number of sales.”
Barry Kramer, principal broker/owner of Better Homes and Gardens Real Estate Choice Realty of Scarsdale, told Real Estate In-Depth that despite higher rates, “we are still seeing robust activity of buyers and sellers.”
Kramer, who specializes in cooperative sales in the Hartsdale-Scarsdale area, added that inventory is still tight. “I believe the impact of the interest rates going up is that anyone that was on the fence is more actively pursuing purchasing a home,” Kramer said.
Joseph Rand, chief creative officer and managing partner at Howard Hanna | Rand Realty, said that while NAR Chief Economist Yun may be correct that the overall national housing market may be in recession, the market in the New York metro region certainly is not.
While for-sale inventory continues to be low, demand continues to be high as are sales when compared to previous historic strong markets.
He said that while sales are down from the pandemic-induced frenzied sales markets of 2021 and 2020, sales activity now mirrors the markets in 2018 and 2019, which were considered strong sales markets at the time.
“Every home seller in Westchester and the Hudson Valley who sells their home in 2023 will absolutely sell it for more than they paid for,” Rand said. “And that is something we haven’t been able to say since 2007.”
He said the bottom line for the housing market going forward in 2023 is that sales will likely continue to decline off of 2021and 2022 transaction numbers. The decline will be fueled by low inventory, higher interest rates, which tends to blunt consumer demand, and high prices, “which sometimes scares some buyers off,” he noted.
While stressing that he believes the New York City-Hudson Valley markets will not enter a recessionary period in 2023, Rand predicted, “I am expecting a market that has 2015-2016 level sales, but prices that are 30% higher than they were back then.”
He concluded by saying that in 2023 he expects home sale price escalation to level off with some areas perhaps seeing a small decline from current record high prices.