Happy New Year!
First, I would like to thank everybody who has helped me grow my business - 2014 was an excellent year! I helped a record number of families relocate. As many of you know, one of my main goals is to give my industry a better name by providing excellent customer service and in-depth market knowledge. I would love to help more families this year, so please keep the referrals coming!
In terms of the real estate market, 2014 was a good year. To sum it up, the number of sales were flat year-over-year but selling prices were up about 5%. When you look at individual areas, the numbers vary quite a bit. Below are some charts with data broken out (mostly) by school district.
2014’s highest sale was $27,500,000 in Armonk (a 17,000 sq. ft. house on 32 acres)
Edgemont saw the number of sales increase 13% year-over-year with a 20% increase in median sales price (and +10% for the average sales price)
Rye City witnessed the number of sales drop by almost 20% but median sales price increased by 23%
Scarsdale had a 6% increase in the number of sales and selling prices increased by 15%
White Plains saw a 4% drop in the number of sales but prices were up about 8%
While there are many buyers in this marketplace, there continues to be a lack of well priced homes. I hear complaints from buyers on an almost-daily basis about this problem. Sellers who price their homes above market value are making a big mistake - at the wrong price, not only will they get less traffic, but they will get fewer (if any) bids. Buyers are sophisticated and most are patient; they simply don’t want to deal with sellers who think they have something better than they actually do.
Here is the text:
For school-obsessed parents, Edgemont is beginning to rival Scarsdale as the place to be. “[The demand for homes in] Scarsdale is insane,” says Keller Williams agent Jeremy Zucker. “But I’ve actually had a few people say they don’t want to be in Scarsdale because of the pressure on their kids. Edgemont is a really popular alternative; the schools are excellent.” Edgemont Jr/Sr High School has been recognized by U.S. News & World Report many times as one of the top schools in the nation. But you’ll pay for that praise: Though Edgemont is more affordable than Scarsdale, you’d still be hard-pressed to find single-family homes here for less than $800,000 (and both generally run $1 million-plus).
Armonk is growing increasingly popular for “families who can afford a big spread,” says Zucker. In addition to abundant space (the typical Armonk home is set on multiple acres and costs close to $1 million) and top-rated schools, there is also a newly flourishing downtown scene. Trendy restaurants such as Moderne Barn, Zero Otto Nove, and Restaurant North line the hamlet’s streets, and there are five theater groups (including The Armonk Players and The Small Town Theater Company). The recent addition of Armonk Square offers standouts such as Bowls, a make-your-old salad place; food purveyor DeCicco Family Market; high-end kid’s boutique Jagger and Jade; and the bustling Italian restaurant Fortina. Hollywood sweethearts and Bedford residents Blake Lively and Ryan Reynolds were even spotted on a date in the Square last year.
Here is the text:
New Rochelle, just a 36-minute commute to Grand Central, pulls in the younger demo and first-time homebuyer crowd with plenty of affordable co-op and condo options. (The 2013 median home-sale price was $580,000.) The city boasts many amenities including a wealth of shopping, dining, and entertainment options, as well as easy access to major roadways. It is also home to residents of a broad spectrum of ethnicities and religions, says Jeremy Zucker, a Wall Street trader turned real estate agent with Keller Williams Realty. “There is a growing demand [for real estate in New Rochelle] because of its Jewish life,” he says. “I also just sold a home to a Pakistani Muslim who wanted to buy a house near a mosque.”
Great news: Westchester County has the second highest concentration of million dollar earners in New York State (after New York City). The NYS Department of Taxation and Finance just released the data for 2011 (the most recent available):
- 6,518 million dollar earners live in Westchester
- the number of millionaires in New York State increased 8.5 percent in 2011 compared to 2010, returning to pre-recession levels
- the number of earners making more than $1 million in taxable income in 2011 rose to 35,705
- New York City had 53 percent of the state’s millionaires — 87 percent of those in Manhattan
The Real Estate Market Is Back!
A client said to me last week that it feel like the early ‘00s. When we visited a property they liked in White Plains, there were three other prospective buyers who walked through while we were there + there were a lot of business cards from agents who had shown the property previously. Although we ended up losing the bidding war, the lucky seller had 9 bids to choose from. Similarly, a property in New Rochelle just had more than 25 bids on it! What is going on???
A general lack of well-priced properties has caused tremendous interest around good homes. In the first case mentioned above, the multi family home has a net yield of around 8% (at the asking price), a good location and plenty of parking. There is a lot of capital seeking return and while being a landlord is not always easy, there are opportunities for the aggressive investor. In the second case, the asking price was about 50% below the 2007 selling price. It will be very interesting to see where each property settles.
The Westchester real estate market tends to lag the rest of the United States, i.e., we were among the last markets to experience price declines and we have been slow in seeing appreciation….. But it is starting to happen. In fact, the year-over-year number will probably show a 3% increase in median selling prices. Not a lot but it’s something!
The number of sales tends to increase before prices rise and we have seen many more homes selling this year than in the past few years (the number of sales is up about 20% for 2013). I am optimistic about pricing for the next few years (I have been a housing bull since 2011, actually). For sellers, this does not mean that you can expect to sell for more than your property is worth. Translation: asking prices have to be very reasonable in order to attract buyers. I believe that a slightly below-market asking price is ideal because buyers are very savvy today - it is VERY easy to overprice your property “to leave room for negotiation” or because your neighbor’s house sold for $XXX,XXX. Sellers: resist the temptation. There are qualified buyers just waiting for a well priced house and they will pounce when yours hits the market. In fact, it will likely attract several interested buyers and you will end up a very happy seller.
Remember that interest rates, while historically low, are up about 100 basis points from all-time lows. As I mentioned in a previous blog post, “if you financed 80% on the average priced home, the 1% increase in interest rates would mean an extra $405/month. That’s a 13% higher payment!”
I have been SO busy that I have not had time to post any market updates. Here is a summary of what happened earlier this year:
A general lack of inventory + a large amount of motivated, qualified buyers + earlier this year, the threat of rising interest rates = a frenzy to buy a home!
Throughout southern Westchester County, 2013 has seen many bidding wars and heated negotiations. As interest rates have risen over the past few months, I have seen reluctant buyers get a lot more serious about purchasing; the dramatic rise in rates has threatened affordability and/or forced buyers to look for lower priced homes. If we take a step back, though, recognize that interest rates were about 2 points higher at the peak of the housing market. A 30 year mortgage in the mid-to-high 4’s is not so bad, historically speaking!
To give you an idea of where prices are, Westchester single family home prices peaked in the third quarter of 2007 (average selling price was $964,000 and median selling price was $730,000). Through 9/17/13, the average and median selling prices so far this quarter are $879,000 and $669,000, respectively, declines of about 8.5%. The housing recovery appears to be solidly underway here in Westchester County, but we are still below peak level prices.
Among the areas in which I regularly work, the most active markets year-to-date are listed below. The percentage change represents the change in the number of single family sales from last year.
# of Sales
White Plains +43%
New Rochelle (10804) +43%
Westchester County +21%
Where did most of the sales increase come from? The largest percentage increase was in sales over $5,000,000, (23 sales vs. 9 at this point last year). The greatest number of sales, though, fell within the $500,000 - $1 million range; the number of sales in that category was up 25%.
I expect that the Fall market will be active, though I believe that there will be a disconnect between sellers and buyers. Sellers will look at the numbers above and expect to sell their house for more money because we are in a rising market; buyers will look at interest rates and point out that their buying power just went down. In fact, if you financed 80% on the average priced home, the 1% increase in interest rates would mean an extra $405/month. That’s a 13% higher payment!
It will be interesting to see how this plays out……
Below is a link to the market statistics that were released by the Multiple Listing Service. In it, they discuss many of the points that I've been highlighting: low inventory, a pickup in sales activity and a fairly optimistic outlook.
For those interested in a look at their particular area (by school district, ZIP code, etc.), email me (firstname.lastname@example.org) and I will be happy to send you an update.
While we all hear and read news reports about the real estate rebound in other parts of the country (Miami, Phoenix, etc.), the media is fairly quiet about developments locally. I am happy to report that the market is active and there are lots of qualified buyers out looking. I just wish there were decent properties to show them!
In Westchester County, inventory is at the lowest point in 2 years and the number of single family sales was the highest since 2007. In 2012, the number of single family home sales increased by 16% over 2011. There were quite a few homes that attracted multiple bids; I expect even more of that to happen this year – we have less inventory and more people looking to buy.
In terms of prices, Westchester pricing is flat-to-down in most areas. In fact, the median price for a single family home dropped 2% in 2012. Perhaps things are changing, though, since the 4th quarter showed a 4% increase in median selling prices.
There are definitely more sales occurring at higher price points. Although the percentage of $1+ million sales was down from 2011, the absolute number of $1+ million sales was higher, i.e., there were just over 900 sales posted over $1 million vs. 823 in 2011. In fact, the highest recorded single family sale occurred in December 2012 ($21,500,000) for the former Harriman estate in Bedford Corners. Another interesting factoid: volume increased 47% in the $2.5 - $3.0 million price range (75 sales in 2012 vs. 51 sales in 2011). If buyers with such means are actively committing their funds to real estate, perhaps it is time for on-the-fence buyers to start bidding.
Where are prices going? Up! Pulsenomics recently surveyed 105 prominent economists, housing analysts and investment strategies; their collective expectation is for homes prices nationally to average a 3.1% annual increase over the next 5 years. For those with a long enough time horizon, this is a great time to buy and if you already own real estate….. buy more! It appears that volume and pricing are starting to rebound in many parts of the country and Westchester tends to lag the USA.
I am still finding the rental market to be strong. My investor clients have been keeping me busy scouting for opportunities throughout southern Westchester. I have come across quite a few good condos (to buy for cash flow) and several multi-family homes, as well. There are still plenty of people who would prefer to rent than buy; for those who can handle the stresses of being a landlord, the market will likely reward you over the next few years.
If any readers are considering selling (or perhaps you know someone who is about to sell), please contact me at 917-549-5296 or email@example.com. It is possible that I have a buyer for your property!