Sept. 18, 2013
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……