I am continually surprised at how shocked people are when I tell them that I am busy. On behalf of clients, I have been involved in half a dozen bidding wars over the past few weeks. Not all of the properties will sell above the asking price. The point remains, though, that there are plenty of qualified buyers in the marketplace.

A lot of activity was a result of the federal tax credit (which expired at 4/30/10), but the tax credit only applied to properties up to $800,000. As the graphs on the next page demonstrate, there are a lot of $1 million+ buyers who see this as a great time to transact. In fact, there have not been this many $1 million+ properties under contract in over two years.

Some highlights from April:

• 58% year-over-year increase in the number of single family sales in Westchester
• Harrison, the Rivertowns, Rye and White Plains (10605 & 10606) all saw greater than average increases in the number of sales
• Harrison had a large increase in the number of expired listings
• Average and median selling prices were higher in Edgemont, Harrison, the Rivertowns, Scarsdale and White Plains

The number of single family sales continues to be brisk; through the end of March, there were 251 sales per month in Westchester County, on average, versus 142 at the same point http://www.jeremyzucker.com/last year. The median and average selling prices were up more than 11%. In a sign that sellers recognize current market conditions, the discount from the asking price decreased, i.e., given more reasonable asking prices, buyers are paying closer to the ask than last year. On another positive note, days on market (a measure of how long it takes to sell) declined. Therefore, sellers who price their properties to sell are finding success. However, in a sign that not all sellers are realistic, expired listings jumped by 11%.

One of the big questions on people’s minds is: “Are prices going to fall further?” I believe that prices will soften in most areas, but not by much. Referring to the chart above, average single family selling prices are down about 18.5% from the peak; I doubt we will see an additional double-digit decline. So how does that affect a purchase decision? Since financing costs typically rise as the economy recovers, if interest rates rise by 1% and prices fall by an additional 10%, the monthly payment on a 30 year fixed mortgage would actually increase (see below). What happens, though, if/when interest rates approach the average rate over the past 20 years (7.21%).....?

Sales activity is up nicely at all price points, as shown below.

Months’ supply of inventory is at the lowest point in more than two years. Is this an effect of the soon-to-expire federal tax credit or pent up demand? The next few months will be interesting….

The first thing to note about the Westchester real estate market is how strongly volume has picked up. Though 2009 was a depressed year for sales, the rebound has been quite dramatic. Through the end of February, year-to-date sales were up almost 46% from the same point last year. Volume increased more than 40% in the market areas detailed on the next two pages.

County-wide, average and median sale prices were up 12% and 7%, respectively, from last year. Single family homes are also selling at higher percentages of the asking price (92.52% vs. 91.74%). However, it is taking longer to sell a home; average and median days on market increased by more than 5%.

My outlook for 2010 continues to be relatively positive and I continue to believe that residential property prices are in the process of stabilizing and that the bottom is already behind us. However, there are two big issues facing the housing market:

1. The federal home buyer tax credit expires on April 30 (this only applies to properties less than $800,000)
2. The Federal Reserve has announced that as of March 30, it will no longer purchase mortgage backed securities. This buying activity has held interest rates down. If and by how much interest rates rise is anybody’s guess; however, most experts agree that they will go up.

The luxury market is also holding up fairly well, as shown on the bottom of the next page. As you can see, properties are selling at all price points. If you have specific questions about a particular market area, let me know!

2009 was an exciting year in the real estate world! On the following pages, I have provided a summary of the past 3 years’ average and median price performance by school district. Perhaps things are not as bad as they seem from reading national news reports. For example, if you had purchased the average priced home in Westchester in 2007 and sold it in 2009, you would have lost approximately 18.5%. That is a larger loss than the stock markets over the same time frame, though with much less volatility.

As the numbers show, prices have continued to decline throughout 2009 and it is taking longer to sell properties. However, there were still 280 transactions, on average, every month in 2009, so there was plenty of activity. Because the majority of purchases are financed, this sales activity means that banks are lending. Qualifying for a loan, though, continues to be a challenge for many people.

The “shadow inventory” of soon-to-be foreclosed homes is an issue for many parts of the country, though I believe it is much less of a factor in Westchester. According to a recent article in The Journal News, judgments that resulted in the loss of property declined 29% from 2008.

My outlook for 2010 is positive – I have seen a pickup in activity among buyers, though that might change when the home buyer tax credit expires on April 30. Mortgage rates are also a factor; most reports I have seen indicate a 50-100 basis point increase by the end of the year. I continue to believe that residential property prices are in the process of stabilizing and that the bottom is already behind us.

My goal for 2010 is to help as many buyers and sellers as I can. In these challenging times, it is especially important to be represented by a team of professionals who work strongly on their clients’ behalf. My team of attorneys, inspectors and other vendors will continue to provide you and your referrals with outstanding service.

The most important thing to note about November 2009 was the strong effect of the home buyer tax credit. Buyers rushed to close before the 11/30/09 deadline, which is, I believe, the main reason Westchester County showed a 47% jump in single family home sales. Of the areas I follow closely, only Larchmont/Mamaroneck experienced a decline in the number of homes sold over last November and Edgemont was flat (though prices were solidly higher for the homes that did sell).

The other factor driving home sales is interest rates. BusinessWeek just came out with a good article (http://www.businessweek.com/lifestyle/content/dec2009/bw2009127_753974.htm) stating that “if you don’t buy a house now, you’re stupid or broke.” If you are not looking to purchase real estate, then you should refinance.

As I’ve been saying for most of 2009, the local real estate market is doing well. Check this out:

The Westchester real estate market continues to hold steady. For October 2009, the County as a whole had a 10% jump in single family transactions (from 10/2008). Average and median list prices and selling prices were up year-over-year, though overall, it is taking longer for properties to sell. The inventory of single family homes has declined year-over-year, partly because the number of homes that do not sell has increased, but also because there are fewer new listings. I expect this to change, though, because smart sellers should put their homes on the market now in order to get a buyer who qualifies for the extended homebuyer tax credit.

Congress has just extended the homebuyer tax credit through April 30, 2010. This should continue to put a floor under prices. The extension raises the annual income threshold to $225,000 (married filing jointly) and $125,000 (single filer). It phases out at a purchase price of $800,000. The tax credit has been good for our market; I have seen multiple bids on several properties in the past few weeks. Anybody who thinks there is nothing going on is simply not in the market!

Some highlights (October 2009 vs. October 2008):

• Westchester – The number of transactions was up 10%, to 333. Average selling price was up 2%.
• Larchmont/Mamaroneck - Average & median selling prices were up 18% and 8%, respectively.
• Rivertowns - More sales than last year; 33 vs. 25.
• Rye - More sales than last year; 10 vs. 5. Average & median selling prices were up 35% and 30%, respectively.
• Scarsdale - More sales than last year; 20 vs. 8. Average selling price was up 33%.

As I have mentioned in previous updates, if you have not refinanced recently, you should look into it now. If you don’t know who to call, get in touch with me and I can help you. And of course, please continue to refer your friends and colleagues who are interested in buying, selling or investing in Westchester real estate.