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September 17, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

Housing market remains strong despite low inventory, tax plan uncertanties

The housing market in the lower Hudson Valley saw another strong year of sales in 2017, according to market analysts at the Hudson Gateway Association of Realtors.

There were 18,854 residential sales of single-family houses, condominiums, cooperatives and two- to four-family buildings in Westchester, Putnam, Rockland and Orange counties during the year, marking a 4 percent increase compared with 2016.

However, this was a slower pace than the 12.5 percent growth seen between 2015 and 2016, “an indication that sales may be reaching a more sustainable level or, in fact, may have been hampered by increasingly lower inventory levels,” analysts noted.

For the fourth quarter, property sales across the region were up 4 percent at 4,718.

In Westchester, total fourth-quarter sales fell 0.3 percent compared with the same period last year to 2,424. The county’s single-family housing market saw a .03 percent increase year over year to 1,436.

Westchester continues to top the region in terms of home price. The median sale price of a single-family home in Westchester increased 6.1 percent for the fourth quarter to $600,000.

Cooperative housing in Westchester also showed strong activity in 2017, with sales rising during the year to 2,033 units, up from 1,884 in 2016 or nearly 8 percent.

“Co-ops remain an affordable alternative for Westchester,” Hudson Gateway analysts said in their report.

For the second consecutive year, Orange County posted the highest sales gain and the most significant gains in median sales price for the region. Sales of single-family residential units, which analysts noted are by far the housing of choice in the county, posted a 9.6 percent increase year over year. The median cost of a single-family home increased by 6.2 percent to $243,250 for the year.

“Orange County experienced inordinate price appreciation in the years leading up to the housing recession, and while unit sales have caught up to pre-recession numbers, the median price at $243,250 remains well below the 2007 median of $322,500,” Hudson Gateway analysts said.

Rockland, the region’s second-best performing county, experienced a bump of 5.5 percent in single-family home sales for 2017 to 2,163. For the fourth quarter, that figure was up 10.3 percent. The county also saw an increase in median home sales of 3.5 percent to $440,000 for the year and 3.3 percent to $441,000 for the quarter.

Putnam was the only county in the four-county region to see a drop in annual sales, which were down 6.8 percent for the year and 6.9 percent for the fourth quarter. The median sales price of a single-family home increased 9 percent to $344,500 for the quarter.

Hudson Gateway analysts noted that the increases in single-family home prices across the region were in a “sustainable 3 percent” range, with the notable exception of Orange County’s 6.2 percent growth.

“Ordinarily, this environment should bode well for buyers and sellers in 2018,” Hudson Gateway analysts said.

The luxury market in Westchester County also had a banner year, with sales of luxury homes selling for $2 million and higher hitting a 10-year high in 2017, according to a report from Houlihan Lawrence, the Rye Brook real estate brokerage firm.

There were 357 high-end homes sold during the year, the report stated, a 4.7 percent increase from 2016. The median sale price of luxury homes rose slightly to $2.6 million, up from $2.56 million in 2016.

Total sales for 2017 topped the $1 billion mark, a 6.2 percent increase from the previous year’s volume.

According to the Elliman Report, a market analysis from Douglas Elliman Real Estate, the price threshold for the luxury market, which it defines as the upper 10 percent of all single-family sales, rose 5.3 percent for the quarter to $1.45 million. The median sales price for that segment rose 6.4 percent to $2.05 million.

“Most price trend indicators continued to rise, even in the luxury market, showing that larger luxury sales are occurring, not that prices there are rising,” said Jonathan Miller, author of the Elliman Report.

Low inventory levels affecting the entire market area continue to be “the only immediate cloud on the horizon,” according to Hudson Gateway. At year’s end, inventory in Westchester was down 12.1 percent. Inventory was down 11.9 percent in Putnam, 17.9 percent in Rockland and 20.3 percent in Orange.

Fourth-quarter inventory in Westchester County reached its lowest level in 16 years, according to the Elliman Report.

“We’re seeing a very heavy sales volume across these markets, and we expect it to maintain at a fairly high level for a while, though the runaway sales growth of the past three years appears to be easing,” said Scott Durkin, Elliman’s president and COO. “Overall, the market feels very fast paced, with listing inventory continuing to fall.”

Another variable that could impact the area’s housing market is tax reform.

“At this point in time, no one can really assess the impact of the recently passed federal tax laws, which may have a significant impact on real estate in states where homeowners regularly pay property taxes in excess of the $10,000 total deduction allowed for both property and state and local income taxes,” Hudson Gateway analysts said.

That deduction limit could affect some in Westchester, where residents pay an average of $16,500 per year in property taxes, according to ATTOM Data Solutions.

“However, given the overall strength of the market during 2017, there is certainly reason for optimism that the momentum will carry over into 2018,” Hudson Gateway analysts said.

Bright spots for the market include low unemployment rates in the Hudson Valley, along with incremental rate hikes by the Federal Reserve that do not appear to be dramatically increasing mortgage rates.

“There is also considerable multifamily development occurring in the region, which will hopefully spur prospective homeowners to relocate to the lower Hudson Valley,” the report said.