Over the past few quarters, Larchmont had been seemingly impervious to the market gyrations that were impacting the rest of Westchester County with varying impact. Like White Plains, it took the Wall Street crisis and the temporary freezing of the credit markets to shake things up.
There are relatively few condos in Larchmont, so this discussion will be limited to cooperatives and single family homes. In general, cooperatives fared reasonably well, but single-family home values took a significant hit.
Coops actually showed a slight increase in price when compared with Q1 of 2008. The 2% increase is well within the normal oscillations – and so one could consider these prices as “stable.” For coop buyers, Larchmont is a desirable location with many complexes located within easy walking distance of the train. That combined with the easy walkable bedroom community right at your doorstep – has allowed prices of coops to remain relatively stable.
The cloud on the horizon is the overhanging inventory which shows no signs of easing given the current number of contracts and pendings. At the current rate of sale, it will take 16 months to clear the current inventory. Sales volume has varried slightly, but once again, this variance is within normal oscillations commonly seen in smaller markets.
Single family home prices in Larchmont had remained surprisingly stable over the last few quarters. While pricing shakeouts occurred elsewhere – Larchmont was stable. Prices had been moderating, but now that moderation appears to have turned into a buyers market for homes.
The average price of sold homes dropped a breathtaking 43% when compared with Q1 of 2008. Do I think that actual prices dropped that much? No. A good portion of this reflects the difficulty of getting jumbo loans which are required for much of the housing stock in the area. There is a strong preference for smaller, more modest homes and this is reflected in the average sales price which went from an average of $1,706k in 2008 to $966k in 2009.
The overhanging inventory and lowered volume are also significant. There are 106 homes currently on the market. Only 11 homes were sold during the first quarter – creating an inventory of roughly 28 months. Nevertheless, this market is very seasonal. Many sellers put there homes on the market during this time to take advantage of the “spring market.” This results in an inventory uptick. Further, there are quite a number of contingent sales and pendings. Should all 3/4 of the contracts and all of the pendings close in the next 60 days that you would be looking at an absorption rate of nearly 13 homes a month – bringing the inventory level down to about 8 months. It should be noted that this “selling season” is peaking now and sales volume will go down later in the summer.
Speaking of volume, sales volume was down during the first quarter from the previous year by about 35%. This probably reflects the freezing of the credit markets and is temporary.
Bottom line – this is a buyers market and fence-sitters should climb off that fence and get moving. I will remind buyers, however, that this is NOT a fire sale. Ridiculous low-balls will probably not be tolerated. You have negotiating advantage as long as you don’t try to “steal” a home.
© 2009 Ruthmarie Hicks. All Rights Reserved.
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