Region’s Luxury Market Still Strong but Changes Appear Likely
John Jordan | June 23, 2022
WHITE PLAINS—The luxury market in Westchester County continues to be strong based on current sales data, however, officials with Houlihan Lawrence tell Real Estate In-Depth that the volatile stock market, rising interest rates and inflation are bound to bring about some changes in the weeks and months ahead.
Anthony Cutugno, Sr. Vice President, Director of Private Brokerage for Houlihan Lawrence, said that there have been material changes in market conditions in the past few weeks that will impact the Westchester County luxury market for the rest of this year.
Gay Prizio, director of Project Marketing at Houlihan Lawrence, said that as of June 16, luxury home sales (priced at $2 million or more) were up 9.5% from the second quarter of 2021, which she said: “was very respectable.” Both Prizio and Cutugno noted that the sales percentage could increase or decrease prior to the end of the month as the company prepares its official second quarter 2022 report.
The current data reflects sales activity from earlier this year when the stock market was booming and lending rates were much lower. In the first quarter of this year, Westchester registered 99 luxury home sales, an increase of 17.9% from the first quarter of 2021.
The median sale price of a Westchester luxury home ($2 million or higher) at the end of the first quarter of 2002 was $2.75 million, up 3.4% from the same period in 2021. The price per-square-foot in the first quarter of this year rose 9.5% to $578. The average days on market stood at 86, down 19.6% from the first quarter of 2021, according to Houlihan Lawrence.
The current Days on Market (as of June 16) has dropped dramatically, down 50% as compared to the second quarter of last year, Prizio said. The percent sale to list price is currently 103%. At the end of the first quarter of this year, that rate stood at 98.4%.
“These statistics point to a very strong market on paper, but what we are seeing now is the market does feel like there is a shift going on,” Prizio said.
Cutugno added, “Our second quarter numbers are going to look very good, but that is reflective of first quarter sales and first quarter pendings. And, as we are moving into the second quarter and into the third quarter, we think and we are anticipating that is where we are going to see the statistical shift because there is just such a delay in the data.”
He said the events of the last several weeks with inflation at 8.6%, lending rates approaching 6% and dramatic declines in stock value have had a psychological effect on luxury home buyers and sellers.
“We are getting more calls for listings than we have had in a long time,” Cutugno said. “We are very busy meeting with sellers and reducing prices on properties that obviously didn’t trade during what has been the best two years that we have ever really seen.”
He noted that in the previous three days, there had been 26 reductions in prices on homes priced at $1 million or more in Westchester County. Prizio said that price reductions in the luxury market in Westchester have been rare and the recent volume of price reductions have been the most seen by the brokerage firm in a long time.
Cutugno related that the recent spike in new listings in the luxury market may be a case of some property owners questioning whether they missed the boom market.
The rather new market conditions are also causing luxury deals that were pending fall apart due to a number of reasons, including the higher cost of financing, he added.
The current economic climate is causing at least some sellers to be nervous.
Cutugno said that it is too early to tell how the luxury market in Westchester will perform in the third and fourth quarters, but noted that there is no cause for panic at this time.
“I think quite frankly that we are very happy to have listing calls because we have been so desperate for new listings,” he said. “Our basket is empty and quite frankly we were so fortunate. The one thing that COVID did for our luxury market was absorb the inventory that was out there. Now, we are happy to be getting these calls to have new properties to promote and we hope that we will continue to sell them.”