The local residential real estate market has seen such a boom that its strength was deemed unbearable in the latest Q3 2021 report from the Hudson Gateway Association of Realtors.
“With the exception of the second quarter of 2020, the real estate market has been an anomaly outperforming the economy,” HGAR said. “Sales and prices have followed a path which is probably unsustainable going forward.”
According to HGAR, sales in Westchester, Putnam, Rockland, Orange and Bronx counties were all up from the same period last year, with Sullivan County the only exception in the region.
The Douglas Elliman report for new contracts signed in September showed a drop from last quarter in new listings and new contracts signed for single-family homes and condos in Westchester.
However, Rich Ferrari, president and CEO of brokerage for New York and the Northeast region at Elliman, maintains that even industry experts cannot know how long these trends may continue.
And he doesn’t think demand is slowing down for the region at all.
“We know we don’t see (a slowdown in demand) for the immediate future,” Ferrari said. “Eventually every market reverts to a normal market, but that will only happen when inventory increases and demand slows.
“For the moment, demand is still high and stocks are low, so we can use the barometer mainly on stocks,” he continued. “Then we will know that we are returning to a normal market, but we do not see it in the near future. It will happen – whether it’s six months or five years from now, we don’t know, but it will happen. “
For now, the only thing hampering the signed contract boom that started last summer in Westchester is the drop in new inventory to replace whatever was purchased last year. As a result, total sales have declined over the past three months.
“In Westchester and in most of the suburbs, whether it is the suburb of Manhattan or the suburbs of Boston, we are seeing a drop in signed contracts, but this is only the result of a low inventory” , said Ferrari. “New registrations have fallen by more than 50%, which will naturally lead to a drop in contracts signed. “
Demand is still strong, which continues to produce record prices. The median selling price of a single-family home in Westchester is now $ 855,000, after increasing 5.6% from the median third-quarter 2020 price of $ 810,000.
“Demand remains very strong,” said Ferrari. “The lowest (number of) contracts signed has nothing to do with demand. This is reflected in the price. Prices continue to rise, which will ultimately slow demand when an apartment becomes overpriced for a potential buyer.
“But we are not there yet,” he said. “It’s a very healthy and strong market.
Even with rising prices, the market is still desirable for many buyers whose mortgage rates remain low, at least for now. Ferrari, however, is not predicting that those prices will drop anytime soon.
“We expect prices to be flat or up,” Ferrari said. “With interest rates remaining low, for someone who chooses to finance, even with a high price tag, it tends to be affordable. Their monthly expenses remain the same as if the prices were a little lower because the interest rates are so low.
“Again,” he continued, “as the volume of transactions, prices will stabilize. They will reach a point where the consumer will start to think they are too expensive. For some of our suburban and second home markets that we were in, probably five to eight years, the prices hadn’t gone up, so it’s a bit of a catch-up right now as well.
Ferrari noted that many home sales in the area are from second home buyers – likely who also own homes in New York City.
“In New York, right now, the rental vacancy rate overall is around 2.5%, whereas a year ago it would have been around 30%,” a- he declared. “So for everyone who’s gone, someone else has walked into town, you know, but what’s really going on is a lot more New Yorkers have second homes. And a lot of these second homes are suburban homes, they’re not country homes, and that’s the big plus for Westchester.
Ferrari added that the fastest selling properties right now are the ones that are ready to move in. In recent times, buyers are discouraged from home improvement projects due to persistent delays in the supply chain for many home and building materials.
“Whether it’s a mid-century modern build, a new modern build, or whether it’s a traditional 1920s or Tudor colonial house, what is most in demand in this moment is everything that is in perfect condition, whether it is a new construction or a complete renovation, ”he said. “Anything where a buyer doesn’t have to do a considerable amount of work tends to get the most interest.
“They don’t want to wait a year to renovate,” said Ferrari. “They want to move in now. “