Westchester View

Although we are in the middle of a major housing market correction, many buyers are still in despair over housing prices in Westchester. They hear tales of prices dropping 40-50% in parts of Florida, California and several other former housing hot spots. Earlier, I wrote a blog about the
“angry buyer.” Many (but certainly not my buyers) are circling like vultures clinging to the idea that if they are just patient, they can swoop in and steal a house from a desperate seller while he is on his way to bankruptcy court. They want their crash – and they want it bad! Many have been waiting on the sidelines for years hoping that Westchester would have a magic correction of 40-50%.

Although we are in a full blown buyer’s market, many buyers who don’t pull the trigger may well be disappointed in the final result. This is not to say that we are heading towards bull market territory. We are still in a declining market and we won’t know that we are out of it until well after the market has turned. But the last markets to fall in such a correction usually have the least to fall overall. These markets fall towards the end of the cycle because they were more stable to begin with.

The fact is that unlike the stock market, the housing prices and the forces that regulate them are strictly local. It’s a shame that that the media trumpets a national number – as if there was a “national real estate market.” The old saying that real estate is location, location, LOCATION!!! Is very, very true. The national market isn’t relevant to a buyer or seller whose transaction is being determined by LOCAL conditions.

Westchester residents can roll out of bed and onto a train and be in midtown in 30 minutes…

The Manhattan commute is soooooo easy. You just can’t beat that for convenience. Further, White Plains, New Rochelle and Yonkers are often commuter destinations in and of themselves. The ease of the commute is a key component and the geography that makes some areas that are also close to the city a bridge too far or a tunnel too long is another. Several large bodies of water such as the Hudson River and the Long Island Sound create natural “bottlenecks” to what should be an “easy commute” as the crow flies. Ask anyone who has to use the Tappan Zee Bridge how easy their commute is and you will probably get a response that is unrepeatable.

Until we can reincarnate “Scotty” to “beam us up” to the place of our employment, housing prices are going to be levered towards location:

Since people value their time and no one relishes a two hour commute, homes in Westchester that are often 30 minutes or less by train to Manhattan sell at a very high premium – and with good reason. The wear and tear on your car and body are major issues. Let’s not even discuss $4.50/gallon gasoline prices of last summer. These factors make living in these areas far less desirable.

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Many buyers, particularly first time buyers seem to have the “I want to go it alone” mind set. As an agent who works a great deal with first-time homeowners, I have to ask why? Since the seller pays the buyer’s agent, the service is essentially free to buyers.

Going it alone creates more risk for home buyers:

Most buyers fail to wrap their arms around representation issues. Buyer’s agents are not paid high fees to search the MLS and unlock doors. That may be the way the public PERCEIVES it, but that is not really what we do. We are certainly there to help the buyer find a home, but beyond that we are there to represent them during negotiations, coordinate little things such as inspections, appraisals, walk-throughs, and the myriad issues that can rear their heads during the contract period. The hard work starts AFTER the home is found, not before.

The unrepresented home buyer:

This is the single largest financial transaction that people make. Do you really want to enter into such a transaction unrepresented? Let me make this point crystal clear: Unless you have a buyer’s agent representing you in your home purchase, you will be unrepresented during the negotiation process. Further, chances are, you are up against a pro who has a fiduciary obligation to represent their client – the seller.

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The Residences at Jefferson place is a large condo complex in downtown White Plains The complex spans on square block between Livingston Ave. and Rutherford Ave. in White Plains, NY with units on 300 Mamaroneck Ave. and 31 Greenridge Ave. The side facing Mamaroneck Ave. is an eight-story urban mid-rise with a sophisticated brick façade. The façade reflects the growing urbanization of the city and is just steps away from all the shopping and dining that downtown White Plains has to offer. The other side of the complex on Greenridge Ave. gives a bow to the suburban neighborhood of the Highlands that it borders. The units on Greenridge are three story walk-up condos that have an outer façade resembling three story townhouses. The low-rise portion surrounds tree-lined streets, single family homes and other low-rise condo complexes.

Just across the street on the Mamaroneck Ave. sid e there is plenty of fine dining, take out and retail – all within easy walking distance of the complex. Iannelli’s , a local Italian favorite is directly across from the Mamaroneck Ave. side. Going to either the Westchester Mall, Fortunoff, Whole Foods or the Cheesecake factory it is easy to leave the car behind and take a short walk.

Built in 2005, this complex offers state-of-the-art luxury. As such, it is no bargain. But it offers convenience, luxury and perks at a lower price than can be had at the Ritz Carlton or Trump. Among other things, Jefferson Place offers on-site parking (you can buy an extra space), laundry in each unit, central air conditioning, a 24-hour concierge, a workout room with state-of-the-art equipment, a media room and a business center. The units are beautifully appointed with granite countertops, and stainless steel appliances, luxurious master suites and more than ample closet space. The living room areas sport hard-wood floors with carpeting for the bedrooms.

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It may be the dead of winter, but a buyer’s housing market is in full bloom in Scarsdale. Some sales statistics point to one of the best buyers markets for single family homes than has been seen in a very long time.

Cooperatives:

Coops in the coveted Scarsdale zip code (10583) showed less stress than single family homes. They were one of the bright spots in an otherwise grim quarter. Prices were down a mere 4.6% over the previous year – with an average sales price of $251,000 for the 4th quarter. There was a mild (perhaps insignificant) average price increase of $13,000 from the previous quarter. The number of units sold in 2008 was not significantly different from the 2007 numbers. But there has been a significant inventory increase of 8.4 months reflecting the season and the general weakness in the New York market.

It should be noted that for cooperatives I use the Scarsdale post office and not the municipality for these statistics. This reflects the way buyers tend to shop of for cooperatives. Buyers shop in terms location not municipality.
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Everyone is looking at this title and they are hitting the snooze button.  Home owners insurance is not likely to get buyers or sellers into a tizzy of excitement.  I know what you’re thinking.  “I’m on this blog to find out about housing prices and cool neighborhoods or to search for homes on-line!  I don’t want to read boring stuff like this!”  Yep, booooorrrring …..until something happens.

It was early December and I was driving (or TRYING to drive) to an appointment.  The traffic was something amazing. Initially I chalked it up to the holidays.  White Plains is the shopping capital of Westchester County and traffic can be an issue in December.  But this was differenet.  Something had happened because the traffic wasn’t moving at all. After zig-zagging around the problem I wended my way to the appointment and forgot about the incident.

Later that day I discovered that a residential fire in the downtown area had been the cause.  The address I found in the  Journal News didn’t ring any alarm bells, but a couple of days later The White Plains Times had a picture of the building that had been on fire.  The Journal News had reported the wrong address.  I knew that complex all too well  YIKES!!! I had  recently sold a unit in this complex!   I immediately logged on to my other source of White Plains news the wpcnr (John Bailey’s White Plains Citizen Net Reporter).  The complex was was a garden style complex  four rows of semi attached buildings. I was hoping my client’s unit was in one of the three unaffected lines.   No such luck.  I swallowed hard, John Bailey’s description confirmed that my client’s unit was near “ground zero.”

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Here is my second “Friday Fun” entry. These days we could all use some comic relief. So I’m going to try to post some humor once a week.  Since I came up with these personally – and I’m not a comic – I can only hope that its good enough to provide a few laughs.

Why do people hate real estate agents?

Could there be a reason why we are viewed as only slightly less revolting than a used car salesman?  How did we arrive at such an edifying status?  Perhaps we came by our bad reputations the old fashioned way – by EARNING THEM.

With that….ahem… hypothesis in mind – I was reading some listings from an area just outside my usual territory – trying to get an idea of pricing and condition before heading out on the road. Generally, I know about the condition of a property that I’m showing so some of the public facing comments fly over me. But this time I knew less – so I read more.  It was an eye-opening experience. Listing agents are obliged by law to represent the seller.  As such, they are required to present the property in its best light.  Of course no on can get past the fact that even if you can put lipstick on a pig – its still a pig.   While scanning the photos and comments I decided to compile a list of agent-speak descriptions and provide some likely “translations” for the benefit of those surfing listings online. Happy Hunting!

“Just steps from the train“ – You can parachute onto the train from your bedroom window.
“Easy access to major roads” – The house is sitting into the middle of a cloverleaf.
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Westchester has been resistant to price decreases since 2005:

Until recently, the Westchester real estate market has been very resistant to the housing recession that has been headline news in many parts of the country. Don’t get me wrong, there were signs that the market was far softer. But average and median sales prices had held up and even increased since 2005 when the housing recession began.

Westchester prices are heavily influenced by its unique location:

Reasons for the resilience are many – but I will mention the most obvious one. There is this old saying: Real estate is location, location, LOCATION. Okay – I know its a cliche – but in this case it happens to be true. The primary reason Lower Westchester has remained on solid footing is its location. From most points, mid-town Manhattan is a 40 minute commute or less. The train ride is convenient and comfortable. That is a HUGE perk and people are willing to trade real money up-front in exchange for more family time, less wear and tear on their cars and gasoline. Ask anyone who has experienced the grinding commutes north and west of lower Westchester and they will tell you more than you ever wanted to know about how a long commute saps your strength, your wallet and family time. Although some of the stats ahead are not looking too pretty, this fact should be uppermost in everyone’s mind for when the market recovers – which it will.

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Sometimes agents talk amongst themselves. Share our war stories and generally discuss the market and where we think it is going. Over the past few weeks I have been hearing a similar theme being expressed in different ways by several agents and brokers. It’s something that I’ve been feeling too – but haven’t expressed verbally – until now. Yesterday, one agent finally put his finger on all the euphemisms regarding “buyer behavior” over the past year when he said he is seeing a lot of “angry buyers.”

We are in one of the best buyer’s markets that Westchester County has ever seen. So why all the hostility? Buyers are in the drivers seat. But like the angry comic, Lewis Black, there are quite a few buyers who seem almost hostile no matter how much the pot is sweetened. It’s never quite enough and they keep pushing the envelope until there is no more. Even after they’ve been offered a gooey sweet pot – they sometimes walk away convinced that they are being ripped off.

My guess is that many of these angry buyers feel that they have been denied their “market crash.” They have been patiently waiting for the market to take a blissful dive off a cliff. After all, a crash of catastrophic proportions was promised by news media. A cohort of buyers were waitin’ and hopin’ and wishin’ and prayin’ for a complete collapse in the Westchester housing market. Then they were then going to swoop in and snag a steal and live happily ever after purchasing a $600,000 home for $200,000.
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If you are in the throes of the buying process – you’ve probably been thinking the same thing. I’ve been hearing this from quite a few buyers these days and its gotten to the point where I feel compelled to write about it.

First, in order to put things in their proper perspective, let’s start by looking back in time one year. I was starting to hear a lot of this last year. I advised clients that although I didn’t have a crystal ball, I didn’t believe prices would drop like a rock – and guess what? They didn’t. I did advise buyers that they needed to be aware that tighter lending standards and higher down payments might severely impact their buying power if they chose to wait. Now the same buyers are back. Prices haven’t changed much locally – the overall effect has been a flat line (up in some areas, down in others.) But buying power is down significantly as lending has seized up and they are required to put down more money at closing. These new requirements have caused some of my buyers who opted to rent last year to be priced out of the market this year. Now they’re stuck in rentals with rates increasing 8-9% a year and madder than wet hens about it.

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Details, details! Does your agent tell you everything you need to know or does he/she withhold information that might be essential in the decision making process?

In the following clip, the agent is informing potential buyers that the house in question is “permeated by unspeakable evil.” The clip is absolutely hilarious. Apart from being a brilliant piece of comedy, the segment also brings to mind the potential pitfalls of working with a listing agent when you are buying a house. Watch, laugh, and then I will elaborate.

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