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WPCNR THE HOUSING NEWS. From Westchester Rockland Multiple Listing Service. April 29,2009(EDITED): The first quarter 2009 rate of house closings was down 31% from the fourth quarter of 2008. The 850 Westchester closings were equivalent to an annual rate of only 4,230 sales, the lowest pace recorded by the Multiple Listing Service since the 1985-1990 period.
Deepening recessionary conditions in the autumn months of 2008 markedly reduced real estate activity in the Westchester region. Plunging equity markets, rising unemployment, weak corporate earnings reports, and pre- and post-election jitters about economic policy and the unknown effects of the various stimulus and bailout plans, all combined to discourage prospective homebuyers from entering the real estate market then. The result of the reduced marketing and showing activity at the end of 2008 was that far fewer closings were posted in the first quarter of 2009.
Realtor firms participating in the Westchester-Putnam Multiple Listing Service reported only 850 closed transactions in Westchester in the first quarter of 2009, a decrease of 37% from the first quarter of 2008. Westchester’s single family house market was most affected with a 41% decrease. Putnam County closings were down by 31% from last year.
Prices decreased.
The first quarter median sale price
2 of a single family house in Westchester was $532,000, a decrease of $90,500 or nearly 15% from last year. That price level was last seen in 2003. The Putnam County median of $411,250 was 20% lower than last year’s.The Westchester decrease, however, was not all a case of across-the-board price depreciation. Rather, much of it reflected a severe contraction in the volume of high-end sales. Houses selling for $1 million or more accounted for only 13% of all sales in the first quarter whereas prior quarters have posted 20% or more.
As a result of this change in the contents of the real estate market basket, the mean sale price of a Westchester house fell to $695,176, a very large 26% decrease from last year.
The condominium and cooperative sectors fared better. The median sale price of a Westchester condominium was $352,000, a decrease of 7% or $28,000 from last year.
The median sale price of a Westchester cooperative unit actually increased by 2%, to $179,500.
Inventory Concerns
The inventory of MLS-listed Westchester properties stood at 6,324 units at the end of themfirst quarter, an increase of 7% since last year. Putnam County inventory decreased by 14%. The 2009 Westchester inventory was actually less than that of the first quarter of 2007, once again illustrating the volatility of this local market indicator in terms of the different forces that affect it
. In 2007 the inventory was “high” because sellers were attracted to list by the still-favorable market conditions then.In 2009 the inventory could also be regarded as “high”, but for the opposite reason. At the same time, the 2009 inventory could also be regarded as exceptionally low, considering the 37% decrease in sales volume. The wild card that defeats ordinary supply and demand analysis inWestchester continues to be the ability of potential sellers to time their listing activity to market conditions. As of March 30, 2009, they were still largely withdrawn from the market.
Equity Concerns Affect Plans
It appears from the dismal first quarter results that the Westchester real estate market was particularly hard hit by the chaos that occurred in the equity markets during the autumn of 2008. The Dow Jones index fell by 25% from late September to mid October, followed by a similar large decline in the first half of November. Higher-income households heavily vested in stocks watched their portfolios plunge in value, thus putting a chill on any thoughts of homebuying. Increasing unemployment in the financial services industries also put a damper on the real estate market.
Banking Health
Our region’s close dependence on the banking and financial sectors –
which brought the real estate recession home to us with special severity and speed – may also be the factor that rejuvenates the local market as conditions improve. It appears that the “bail out” mechanisms of the Obama administration and Congress have served to stabilize the banking sector, and the stock markets appear to have stabilized as well. The administration and Congress have also enacted legislation to mitigate the marketcorroding effects of foreclosures (Making Home Affordable Program).Westchester does not have a severe local problem with foreclosures but will nevertheless benefit if nationally some measure of control is achieved. Add to this the resumption of mortgage lending by community banks, mortgage interest rates that are still very low, and inducements to buy such as the $8,000 first-time homebuyers credit, and it can be argued that a framework of conditions and policies is in place to take advantage of any confidence-building turnarounds in the general economy that may occur such as lower unemployment and higher corporate earnings.



