Luxury Home Sales Decline 25% in First 6 months of 2019 in Westchester County, then climb back

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WPCNR REALTY REALITY. From Houlihan-Lawrence. January 7, 2019:

Luxury markets north of NYC, all distinctive and unique, ended the year on a mixed note. Pricing, inventory levels and buyers changing taste and attitudes played a role in how each area fared in 2019, according to the Houlihan Lawrence Luxury Market Report released today.

In Westchester County, luxury sales ($2M and higher) dipped by 25% in the first half of 2019, a symptom of buyer malaise and concern about tax reform. Buyers returned to the market after tax returns were filed and the impact of tax reform on their personal balance sheet was clarified. Sales moved into positive territory in the third quarter and momentum continued to build in the fourth quarter. Second half gains offset most of first half declines and luxury sales in 2019 posted a modest decline.

The ultra-luxury segment of the market ($5M and higher) was level with 2018, but a sharp drop in selling prices made 2019 look very different from 2018. In 2018, Houlihan Lawrence’s sale of David Rockefeller’s estate sold for 50% over asking price and closed at a record-setting $33M. That same year five sales surpassed the $10M price mark.

In 2019 there were no sales over $10M and the highest sale, originally offered at $12M, closed at $8.1M. Most ultra-luxury sales took one or more price reduction and sold on average 26% off the original list price underscoring buyers’ value driven mentality at the high-end and conservative attitude towards real estate.

Luxury sales ($1M and higher) declined in Putnam and Dutchess counties although pended sales in Putnam increased significantly – a hopeful sign for 2020. Further north in Columbia County, Houlihan Lawrence represented the seller and buyer on a record-breaking $8M sale and established Houlihan Lawrence as the number one brokerage firm in Columbia County.

In Greenwich, luxury sales ($3M and higher) were down in 2019. Pended sales in the $3M-$3.99M price range jumped at the close of the year which may translate into a stronger first quarter.

Above $4M, a buildup of inventory continues to weigh down the market and put pressure on pricing. Motivated sellers have abandoned the notion of aspirational pricing – that is list prices that are disconnected from market values. Their pricing strategy is based on current market conditions, recent comparable sales of homes in similar condition, and market activity.

Sellers who listen to the market arrive at a realistic value that closes the gap between list price and selling price. Sellers may take a loss but their need to move on is stronger than their desire to achieve an unattainable number.

Prices adjusted in Darien and luxury sales ($2M and higher) increased in 2019. Pressure on pricing pulled down the median selling price and the number of sales in the $2M price range swelled at the expense of higher price points. New Canaan’s fourth quarter luxury sales are about level with same period last year and may be on the cusp of improving, similar to neighboring Darien.

Anthony Cutugno, Senior Vice President and Director of Private Brokerage for Houlihan Lawrence, said,

“Unemployment, inflation and interest rates remain low and most economic indicators are strong. 2019 closed with another year of double-digit gains in the stock market though rising portfolios did not translate into ebullient buyers.

The new decade ushers in an election year which is likely to impact luxury sales in the second half as buyers wait to see what the next four years will bring. For sellers who are truly motivated to sell, now is the time to take an objective look at pricing and presentation, adjust as needed, and enter the spring market with a too-good-to-resist offering.”

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