Westchester housing market prices have been shifting. Make no mistake, the market is generally quite hot. But like Heidi Klum says on Project Runway: “One day you are in. The next day you are out”. The same can always be said for the Westchester real estate market. With the exception of a deep housing recession, something is always “in”. But the nature of the housing market is cyclic. Housing that was on a tear the last few years seems to have cooled off while other sectors of the market are taking off.
The reason I’m writing this post is to make sure that some people who are hesitating, won’t miss the train. For some move-up buyers, there are clear signals that it is time to get moving. The same can be said for those who are considering a downsize.
Let’s take a look at what is changing…
Recent sales data from the HGMLS shows that the single-family home market is really heating up. This is a marked shift from the early years of the recovery when single-family home sales were tepid while condos and townhouses were in raging bull mode. This created major issues for people who wanted to downsize. Their homes values were chugging along at a 2-3% increase while condos and townhouses were far outpacing the rest of the market.
That gap widened for a long time and then homes in places like the River Towns and Sound Shore started to catch up. But single-family home prices continued to lag behind in the cities and some towns. I dubbed this market disparity the “granular recovery”. This state of affairs ended in 2016 where a broader-based county-wide recovery started to take shape. That was when the single-family home market started really started to gain its legs.
Let’s start by saying these are early numbers and things could change. However, there are some trends that if you are thinking of buying or selling, you shouldn’t ignore.
According to the Hudson Gateway MLS (HGMLS) the median sales price for a single-family home in White Plains rose 15% during the first four months of 2018 when compared to the same period in 2017. Sales volume also increased by 33% during this period. That’s a very strong showing. It is consistent through all major price ranges. The median price for a house during the first four months of 2018 was $709,000. That’s up from $616,000 from the same period in 2017.
Make no mistake, luxury condos still sell at a high premium compared to single-family homes in terms of price-per-square-foot, but the gap is finally narrowing.
Condos have cooled off a bit particularly at the high end. Median prices in moderately priced condos in White Plains are up about 4% to $375,000. Volume is up 15% as well for this price range.
The high-end condo market in White Plains appears to be softening. I think it’s too early to tell what is going on in this market, but it is definitely softer than the other markets. Median prices are down and so is sales volume. I think prices in this market are topping out for the time being and the low sales volume reflects that fact.
The volume of the co-op market is strong and almost identical to what it was last year. Prices appear to have held steady. Median prices have decreased, but the nature of the sales skewed that number down. When comparing comparable units from the same complex, prices appear to be robust. This was particularly true for the more “suburban” co-ops. Their price points had been a bit softer until this past year. The complexes from the downtown area appeared more or less steady
If you are a move-up buyer who wants to scale up into a single family home from a condo or co-op, I have two words for you: GET MOVING. Even though the moderately priced condos are showing price increases and good volume, they those numbers are dwarfed by the major uptick seen in the single-family home market. This sort of shift is not uncommon. One segment of the housing market moves up and then other market sectors that were left behind start to catch up. The gap between single-family home values and the condo/co-op market is closing. It’s not going to get any easier, so waiting may mean losing buying power. Rising interest rates are also contributing to this problem.
The move-up buyer, in particular, could miss the train on this if the dawdle. You have three long-term trends at work that can decrease your buying power.
For several years I sat in the living rooms of many disappointed empty-nesters who wanted desperately to downsize locally into a modern townhouse. A lateral move meant they were just breaking even on their sale vs the purchase price on a condo unit that had about half the square footage their house had. That yawning gap that stopped many a downsizer in their tracks, has narrowed. It isn’t gone. But depending on your specific location, you will probably do better now than you did a few years ago.
If you are living in a town with particularly high property taxes, it really is time to get going. The new tax laws are not your friend and they already appear to be impacting home values in some of the River Towns and along the Sound Shore. It’s too early yet to tell, but sales volume in these areas is down and prices are a bit soft. It’s early in the season, but I was seeing median prices dipping by about 5% in some areas. The volume of sales isn’t great enough to draw any conclusions, but there is no way that such a major change in overall outlay wouldn’t have some impact on pricing over time.
This is another group that could miss the train, reducing their buying power over time. A great deal depends on where you are selling and where you are buying.
Try to find something you can truly afford. Interest rates are rising and so are entry level prices. For the condo and co-op markets, rising prices are not on a tear, but entry-level houses are. With rentals sky-high, you can significantly reduce your outlay by purchasing a home, particularly if you stick with the co-op market. Just the act of paying down the loan each month is creating wealth. That’s money in your pocket, not your landlords.
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