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WPCNR HOME WATCH. From the Hudson Gateway Multiple Listing Service. April 10, 2013:
Realtors participating in the Hudson Gateway Multiple Listing Service, Inc., a subsidiary of the Hudson Gateway Association of Realtors, Inc. reported 8% more closings than last year of residential transactions throughout the four-county region served by the MLS.
Orange County showed the greatest percentage increase in sales volume, 16%, followed by Westchester at 7%, Rockland at 5%, and Putnam at 2%.
Westchester and Putnam both posted slight price gains. In Westchester, the $515,000 median for a single family house was just 2% higher than in 2012, and the condo median was flat at $313,500. In Putnam, the single family house median of $286,500 represented a 3% increase from last year.
For Westchester, the surge in sales was concentrated among condominiums and cooperatives, 11% and 8% respectively;
Orange County experienced high condo and co-op increases, 24% for the combined categories, whereas Rockland showed greatest strength in the single family house sector with an increase of 10% there. Rockland, however, was the only county to show a negative posting in one of its land uses, condos and co-ops, with a 5% decrease from last year.
There were 2,263 closed transactions during the recent first quarter, constituting a large 8% increase over the 2,090 transactions reported in the first three months of 2012. The closed transactions were largely of properties that had been listed and marketed during the winter and early spring months of 2012-2013.
The quickening market that commenced in 2012 has been responding to several factors, one of them being pent-up demand by consumers who need to be in the market for one reason or another, and who perceive that economic circumstances are supportive. For example, mortgage interest rates have been extremely low – at an average of 4% or less on a 30-year conventional loan – and there is little prospect for rates to lurch upwards in the next few quarters.
Also, the equity markets – the Dow Jones in particular – have achieved record highs in recent days; while not directly or immediately affecting real estate, the daily DJIA has served as a morale booster for real estate consumers. An additional factor is the region’s unemployment rate; it has been stuck in the 7-8% range for many months, but it is at least stable.
The factors that support the release of pent-up demand have also attracted first-time buyers as well as others who see an unparalleled opportunity to acquire affordably priced housing in what is well known to be an expensive region. Their market activity is having the effect of making the pricing structure look weak or even decreasing from quarter to quarter.
However, there is no devaluation taking place – that all occurred in 2008 and 2009 when the housing recession took place.
Rather, the bulk of the market has strongly shifted to the moderate and lower priced properties; there are more such sales relative to the high end, and that has the effect of pulling down the averages.
In Westchester, for example, the proportion of first-quarter single family transactions for $1 million or more was about 16%, the same as last year at this time, but well below the level of 20% or higher that prevailed in prior years.
Rockland and Orange counties were the most affected by such averaging during the first quarter of 2013. The median sale price of a single family house in Rockland was $358,000, a decrease of 3.8% from last year. Rockland condos and co-ops, however, posted a median price of $190,000, an increase of 5%. In Orange county, the single family house median of $226,000 was 10% lower than in 2012; it’s condominium median of $153,470 was 3% lower.
The pace of sales throughout the region appears to have affected inventory levels more significantly than it has for many years prior. The decreases in 2013 end of quarter (inventory)levels ranged from 19% and 17% in Westchester and Putnam, respectively, to 10% and 6% in Orange and Rockland, compared to a year ago.
Realtors are not reporting actual shortages of suitable housing in any category. Rather, they say that the tightness in the market is increasing the level of competition for properties, with the result that prospective purchasers need to make faster decisions.
There may also be an increase in prices, as is beginning to appear in Westchester and Putnam now.
If that occurs and general economic conditions remain favorable, more property owners who have postponed selling their properties will be induced finally to do so, and inventory will increase again, making an even more inviting setting for purchasers.
