WPCNR REALTY GO ROUND. From Houlihan-Lawrence. February 8, 2018:
The story for the 4th quarter remains relatively the same as the last quarter.
The stock market and economy continued to gain steam and both ended the year with record highs.
While consumer confidence was also at an all-time high, confidence in our local real estate market is showing signs of softening.
For the 4th consecutive quarter this year, active listing inventory continued its descent across our market area, a trend that isn’t showing signs of improvement in the near future.
Homes for sale in Westchester were down 8.4%, Dutchess was down 10% at the end of the quarter.
The average sale price in Westchester was up 5.1% to $794,660, Dutchess was up 2.2% to $303,150.
In Putnam, where the decline in inventory was the greatest at 10.8%, prices were up 1.7% to $368,422.
The steady increase in pricing due to the lack of supply is resulting in wavering demand.
Pending sales in Westchester were down 4.2% overall, and down 4.5% at the most affordable levels, homes priced below one million.
While pending sales overall in Putnam and Dutchess were slightly up by 2.7%, pending sales at entry level price points were down 21% in Putnam and 14% in Dutchess.
With higher prices and less choice, entry level buyers have taken up a wait and see posture.
Here are some trends Houlihan Lawrence is seeing as we head into the new year.
While we could initially attribute the reduced activity in the beginning of the year to the polar temperatures, activity levels have only slightly warmed up.
Showings in our area are down 32%.
Showings of homes listed under one million dollars are down even further at 36.8%.
Homeowners interested in selling need to understand that pricing is key.
Homes priced competitively, without experiencing a price reduction, sell on average in 50 days at 99.9% of their original asking price.
Conversely, homes priced too high, that get reduced, sell on average in 361 days for 82% of their asking price.
Homeowners need to be very competitive in their pricing in the current climate. In our luxury markets, demand is healthy, for now.
We are beginning to see inventory levels increasing at a rate that is creating an imbalance of more homes than can be absorbed by the current pool of buyers.
Sellers should recognize that luxury buyers are looking for homes they can move right into with little to no work needed.
An attractive home, not only in price, will help bring buyers in as the inventory in the luxury market inflates. The tax changes will undoubtedly have an effect on our markets, to what extent remains to be seen.
The reason people buy homes are rarely based solely on tax incentives. Where people buy, and how much they spend however are certainly going to be effected by the changes to the tax law.
For now, Houlihan Lawrence isn’t seeing a major adjustment.
What we can expect is that the tax changes will likely put downward pressure on prices, and perhaps that will be the catalyst needed to jumpstart the market.