Westchester Home Prices Stall; County Inventory of Unsolds Increases; County Sales Off 12% in Second Quarter

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WPCNR REAL ESTATER. Special to WPCNR from the Hudson Gateway Multiple Listing Service. (Edited) July 9, 2014:
Westchester and Orange Counties experienced the largest percentage year to year falloffs from 2013, in sales at 12.0% and 12.2% respectively in the spring quarter ending June 30..

In Westchester the slowdown was concentrated in the single family house sector, 13.5%, followed by condominiums, 10.1%.  Orange County’s single family house sales were down by 12.1%.  Putnam County sales were down by just 2.9%.  Rockland County stood out from its neighbors with an actual overall increase of 6.2%.
Home Prices in Westchester posted a mediansale price of $651,250 for single family houses, an increase of only $1,250 or 0.2% from last year, though still well above its medians for 2011 and 2012.  Its condominium sector picked up, however, with a 5.5% increase to a $363,750 median.

Inventory of homes up for sale increased in the last quarter as Westchester single family home prices stayed steady:  Westchester experienced an increase in inventory of 3.0%, to 6,342 units; its single family house inventory increased more by 5.7% to 3,913 units.

Closed residential real estate transactions during the second quarter of 2014 slackened in relation to the same period last year.

Realtors participating in the Hudson Gateway Multiple Listing Service, serving Westchester, Putnam, Rockland and Orange Counties, reported 3,195 closings in the four counties, a decrease of 9.2% from the 3,519 closings reported during the second quarter of last year.  These grand totals comprised sales of single family houses, condominiums, cooperatives and 2-4 family dwellings.

The second quarter closings largely reflected listing and showing activity that took place during the early months of the year. Many data providers and analysts, including the National Association of Realtors, ascribe at least some of the slowdown in sales here and nationally to exceptionally difficult winter weather conditions that discouraged prospective purchasers from getting out and researching properties of interest.

The lower Hudson region undoubtedly experienced some of that effect, but in our case there may also have been an equal or even larger effect from a simple market correction of the fast pace of sales in 2013 and the first quarter of 2014.

Overall inventory registered with the multiple listing service at the close of the quarter (June 30) amounted to 12,383 units. Orange County, whose real estate market is only about one third of Westchester’s, closed the quarter with 3,023 single family houses listed, an increase 19.9% from last year.

Orange County’s recovery from the recession has been hampered by the need to work through a supply of distressed properties as well as short sales that take longer than average to process, both factors that allow inventory to accumulate.

Also gaining in price were Rockland County single family houses, with a 4.8% increase to a median of $408,750.  Rockland also did well with condominiums, 3.5% to $222,500.

Putnam and Orange counties posted decreases, however.  Putnam’s single family house median decreased by 8.2% to $285,000, and Orange’s decreased by 3.0% to $232,500. Again, Orange County’s market is constrained by its relatively larger supply of problem properties compared to the other properties.

The pause in price gains and sales volumes in the Hudson Gateway region is not severe but it is a bit of a surprise in that there are no obvious external factors that drove it, other than bad winter weather, an assertion that is likely but cannot be proved.

For example, mortgage interest rates have remained low, ranging from an average 4.6% on a conventional 30-year loan made during the winter months, to about 4.2% at the close of the second quarter.  Admittedly, tougher lending criteria have made it harder for consumers to obtain a mortgage but that is a condition that has been in place for several years now.

Two other factors that are confidence builders for home buying decisions are the unemployment rate and the state of the equities markets.  For the former, there has been at least a full percentage point decrease in each of the four counties in the past year.  The most recently posted rates range from 4.7% (Putnam) to 5.7% (Orange), with 5.1%  (Westchester) and 4.8% (Rockland) in between.  As for the equity markets there has been a vigorous bull market leading up to, and surpassing, the 17,000 threshold for the DJIA.

The best bet, then, for figuring out what occurred with prices and volumes during the second quarter is to patiently wait for another quarter to see if there was no more than a  technical correction or if some other trend is in play.

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