Conditions Remain Ideal for Sellers With Properly-Priced Homes
Last year presented challenges for homebuyers as inventory continued to decline. As interest rates rose, buyer demand remained robust – which continued to increase median prices and decrease days on the market, according to the Houlihan Lawrence Westchester-Putnam-Dutchess Q4 Market Report.
Due to extraordinary demand created by the pandemic, and the further restricted inventory, sales peaked in 2020 and 2021 throughout Westchester, Putnam and Dutchess counties. And, as anticipated, sales naturally declined in 2022 after this unsustainable volume.
According to the report, sales declined for the year in Westchester by 17.7 percent, in Putnam by 22 percent and in Dutchess by 22.7 percent, compared to 2021. However, median sale prices were up 4.5 percent in Westchester, 11 percent in Putnam and 5.4 percent in Dutchess.
The median sale price for homes sold in the Brewster, Carmel and Putnam Valley school districts ranged from $410,000 to $455,000; while in Lakeland and Mahopac, it was between $540,000 and $535,000. Haldane saw a median sale price of $615,000, while in Garrison, it was $925,000, according to the report.
In 2022, there were 168 condominiums sold in Putnam, down 16.4 percent from 2021, with a median sale price of $295,000, down 0.4 percent.
“These few market shifts may be the first indicators of a market starting to normalize,” said Liz Nunan, president and CEO of Houlihan Lawrence. “As we enter 2023, conditions remain ideal for sellers who properly price their homes, as discouraged yet price-savvy buyers continue to wait for new inventory.”
The luxury real estate market north of New York City ended 2022 with mixed results, according to the Houlihan Lawrence Luxury Q4 Market Report.
Westchester showed a slight uptick in closed sales on homes valued at $2 million and higher in 2022, making it the only area north of NYC to exceed 2021 sales. Westchester performed solidly in the lower end of the market (less than $5 million) and sales in the higher end (greater than $5 million) dipped by nearly 20 percent.
The story in Putnam and Dutchess counties is unchanged from last year; pending sales are down significantly, and first-quarter sales will likely land in negative territory, according to the report.
In Putnam and Dutchess County, luxury home sales (those valued at $1 million or more) were down 2 percent, and the median sale price was down 9.4 percent. The highest sale price in the fourth quarter in Putnam was $1.75 million, in Carmel.
“These longer-commute-time markets became the darling of NYC buyers seeking low-density areas during the height of the COVID boom, when work-from-home seemed here to stay,” said Anthony Cutugno Sr., vice president of private brokerage for Houlihan Lawrence. “Now, pressure from employers to return to the office, lay-offs at technology companies and smaller Wall Street bonuses may temper this once white-hot market.”
He said a strong buyer demand in a sharply supply-constrained market may be contributing to a decline in sales.
“Homes are selling faster at closer to list price at a higher average price per square foot than last year,” said Cutugno. “Persistent inventory shortage keeps demand high as the scarcity principal kicks in.”
Further, he said the supply issue will not correct itself anytime soon, noting that in the luxury market, rising interest rates have a greater impact on sellers than buyers. He said many homeowners who want to sell are unwilling to give up a low-rate mortgage to purchase a new home at higher rate in a tight market.
Consequently, they decide to hold onto their house and wait for more favorable conditions, fueling the imbalance in the market.
“The market is admittedly complicated,” said Cutugno. “The first half of 2023 will likely see a decline in sales north of NYC, although even a sharp drop does not mean the market is collapsing.”
Cutugno explained that the past two years of luxury sales in Westchester are about equal to the aggregate homes sold in 2016, 2017, 2018 and 2019. “Perhaps 2023 will recalibrate our expectations of a healthy real estate market as the shadow of the pandemic recedes,” he said.