At long last, we have a broader based housing recovery in Westchester NY. Up until this year, I kept describing the housing recovery as a very “granular”. Tiny slivers of real estate were enjoying the lions share of the gains while the rest of the county seemed mired in the doldrums. Certainly some towns were chugging along with 2-3% appreciation. But that was really thin gruel after the near the 20-25% dive in home values some areas experienced.
Last year, I wrote a blog on the Suburban – Millennial Paradox. What I was describing was the long term shift in the buyer preferences of the millennial generation. The suburban ideal of the Boomer/GenX generations had changed for the millennials. This was partly reflected in the nature of the housing recovery.
Larchmont was the poster child of the granular market. It had barely hit bottom in 2009 before it started roaring back to life. According to the MLS, by 2015, Larchmont prices had jumped 49% from their market lows. The median price for a home sold in Larchmont was $1,347,000, a 21% increase over pre-recession prices.
At the same time, other suburban areas of lower Westchester communities were appreciating at a very healthy clip. These included (but were not limited to) Mamaroneck, Scarsdale, Rye City and Irvington.
Nevertheless, most of upper Westchester and significant swaths of lower Westchester weren’t invited to the party. The granular recovery through 2015 created winners and losers. This resulted in big disparities in price points that weren’t really making practical sense. Buyer’s markets and feeding frenzies were happening in adjacent towns. The home sellers on the wrong side of this equation were getting increasingly discouraged when they saw neighboring towns roaring into bull territory, while their markets were struggling to regain their pre-crash prices.
Last year, the recovery was still lagging for many of these towns and villages, and this was a concern for price appreciation going forward. But now we can see through the rear view mirror that 2016 was the turning point for many of these areas. Further, some of the towns that were on a tear, actually took a bit of a breather. Larchmont’s actually went down from the previous year. Everyone has a different opinion on things like this. But, to me, this is actually a healthy sign of markets equilibrating with each other. A few of these very popular locations may have gotten ahead of themselves.
These are areas that had been struggling to recover but made strong strides in 2016.
In 2015, the median price of a home in White Plains was $618,000. That’s down 8% from the market high that was reached in 2006. But in 2016, the median sales price increased to $660,000, up nearly 7% from the previous year. This puts current prices just $2000 below its former market high. Now that spells “recovery” to me.
Rye Brook did well too. The 2016 median price reached $895,000. It has now completely recovered from the recession and sits about 4.5% above its former high.
Harrison has more than one Post Office address:
The Harrison P.O., though still off its previous market high point, had a significant bump in median prices in 2016 to $1,223,000.
The Purchase P.O. had median prices briefly touching $2million, in 2015, the median price was $1,295,000. In 2016 it was $1,525,000.
Tarrytown & Sleepy Hollow:
Tarrytown and Sleepy Hollow are sister villages. The aesthetics really suit the more walkable community feel that many coming from the boroughs of Brooklyn and Queens find compelling. They also have easy access to Metro-North. Although they had been making steady appreciation, 2016 marked a turning point for these two more moderately priced villages. Tarrytown was up over 16% (median price $713,000) while Sleepy Hollow was up nearly 19% (median price $785,000).
You can see from the graph below that most of these areas have now completely recovered from the housing recession.
Like previous generations, millennials are discovering that suburbia is a great place to raise a family. Urban living is terrific when you are single or just a married couple. It becomes increasingly complex once there are children. The recession and student debt delayed the formation of families for this generation and the notion that they would never leave the cities to raise families was not quite accurate.
As the economic recovery has touched broader portions of the population, more families are being started and more couples have the means to purchase a home. This has been a big driver of the new bull market in more moderately priced municipalities.
We have to go full circle back to the suburban – millennial paradox. Yes, millennials have discovered suburbia and this broader based housing recovery is evidence of this. But what they want from suburbia has changed.
In the previous generations, one could argue that more strides would have been made earlier in areas like Rye Brook, Harrison and White Plains. The Bommer/GenX generations really wanted the quiet, secluded suburban enclave. The cul-de-sac was all. On the weekends, they’d load the kids into the car and shop big-box stores.
This new generation wants walkable communities with character. A downtown full of large franchises is not their cup of tea. Villages like Larchmont, Sleepy Hollow, and Tarrytown fit their image and aesthetic of more eco-friendly, walkable communities with a unique mix of merchants and entertainment. They don’t want a large yard to maintain and they don’t want to drive miles for a quart of milk.
What municipalities now have to address is how to make their existing infrastructure work for this new generation of home buyer. We have to recognize that this is a tectonic shift in buying preferences and woe be to the municipalities who don’t listen.
© 2017 – RGHicks – https://thewestchesterview.com – All rights reserved.
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