Mansions Are Moving

An article in today's New York Times real estate section confirms what some Westchester real estate agents have been noticing over the last few months. While sales of lower priced homes have been stagnant, homes in the multi-million dollar range have been steadily moving on and off the market. Some of these homes have been reduced, sometimes by several million dollars, before selling. Nevertheless it is interesting to note the strength of this segment of real estate sales. While the article specifically references northern Westchester, the same is true of southern Westchester as well. Since September 1st in the Along the Sound real estate area, 19 houses at over $2mm have sold and another 21 are under contract. The median selling price was $2.8m for a 5 bedroom, 5 bath home with over 4300 square feet of living space.

Home Sales-September Activity Shows Slowdown

September 2010 real estate sales Along the Sound* definitely slowed down in comparison with prior months' transactions. But before we go wringing our hands and say the market is fading, let's consider that most closings occur 3 months after the contracts are signed, so these houses represent deals struck mainly in June and later. What happens in June? Lots of stuff! Graduations, weddings, end of school activities, etc. Most young buyers of single family homes want to close BEFORE September because of the start of school. Once June rolls around, your potential pool of buyers definitely shrinks. We should not be too down on the market, especially considering the nice number of August single family home closings that occurred (82).

There were only 43 sales for the month, which is pretty consistent with Septembers of '06-'09. Here are the details:

The definite statistic that jumps out is 3,046 sq ft for $960k. Buyers definitely got more for their money in September closed transactions when compared to prior years. Sellers need to keep this in mind when listing their home for sale: it is still a buyer's market and buyers are looking for value.

* Along the Sound market area covers Pelham to Port Chester, including New Rochelle, Larchmont, Mamaroneck, Rye Neck, Harrison, Rye, and Rye Brook real estate.

Summertime and the Market is Quiet

According to Dictionary.com, doldrums are

dol·drums

   /ˈdoʊl drəmz, ˈdɒl-, ˈdɔl-/ Show Spelled[dohl-druh mz, dol-, dawl-] Show IPA

–noun ( used with a plural verb  )

1.

a state of inactivity or stagnation, as in business or art: August is a time of doldrums for many enterprises.

And that is the truth. There are few new listings Along the Sound. There has been little activity in home showings. Interest rates have remained at extremely low levels. The Dow has hovered around 10,000. Are we all waiting for this hot summer to be over? Our hope is that vacations will end, children will return to school and buyers will return to the market. Nothing has fundamentally changed in our area, but national newspapers, magazines, and internet sites have tolled the doom of the real estate market as a place to make money.

 PS While I was typing this the Dow responded to upbeat economic news and is up 250 points!

Is giving Up on Housing as an Investment Such a Bad Thing?

I don't know how many current buyers can remember a time before the '00s when people bought houses because they needed a place to live, they liked the town, its location and the commute. People expected to save money through their mortgage payments, not necessarily because of appreciation over 2 to 3 years. Maybe our expectations of the housing market need to shift with the times. Pick a place you'd like to live, with a nice commute, a place to shop and have a pleasant meal and be happy that your interest rate is only 4.5%, not 18% as it was back in the '80s.

Check out this article in The New York Times from last Sunday: In Defense of Home Ownership.

June Real Estate Sales

The Wall Street Journal is reporting that home sales across the United States declined from May to June 2010.  However, they were up almost 10% for the month when compared to 2009.  Will people focus only on the bad news?  Well in our area don't just focus on the headline.  If you read the article, it further states: "Sales fell in most parts of the country in June except in the Northeast, where they rose 7.9% from May." So there is good news in the Westchester real estate market.

July Real Estates Sales

In the month of July so far, there have been 80 closings.  This compares to 76 closings for the same period in July 2009.  Anecdotally (fewer lookers at open houses), demand for real estate definitely seems to be decreasing, but this is a common occurrence in the summer months.  Currently, there are 921 single family houses on the market Along the Sound.  The good news is that real estate inventory seems relatively stable.  Yes there are many houses on the market right now and price adjustments will have to be made, but with interest rates continuing at there lowest levels in years it remains a good time for the confident buyer.  Currently, mortgage rates are running around 4.7% for a 30-year mortgage.

Westchester Real Estate Activity

Westchester Real Estate activity in the Along the Sound market* has been brisk for the month of June 2010. There were 162 single family closings** this month. In addition there are 247 single family homes under contract. There are also 921 homes available in Pelham, New Rochelle, Larchmont, Mamaroneck, Rye Neck, Harrison, Rye, Rye Brook, and Port Chester.

After looking at the data what is most striking is the downward pressure on real estate sales prices. We are at the home sales volume levels achieved in 2007, which was overall a “good” year for Westchester real estate sales before the economic downturn of 2008, however, median prices are off $146k or almost 16% from 2007. Looking at the decline in the median price over the last 4 years, one would have to conclude that these are true losses in market value of Westchester real estate.

Future of Westchester Real Estate Sales

So what is the forecast for Westchester real estate sales for the remainder of 2010? It’s difficult to paint a rosy portrait given the latest economic report which shows overall low job creation for the month of May. This would indicate that the “recovery” has hit a stall. If the Federal Government is unwilling to pay to create jobs, it could take longer to see a gain in real economic growth. So far this year the financial industry seems to be weathering the economic stall pretty well which would be good news for the housing market in Westchester. So far in 2010 502 homes have been sold. The number of houses on the market now Along the Sound is 921 single family homes, which would represent an almost11-month supply. There will definitely be opportunities for buyers to negotiate a better purchase price in the coming months.

* The Along the Sound Westchester real estate market covers the towns of: Pelham, New Rochelle, Larchmont, Mamaroneck, Rye Neck, Harrison, Rye, Rye Brook, and Port Chester.

** Market data taken from the Westchester Multiple Listing Service as of July 3, 2010.

Mortgages for Westchester Home Purchases

Wow! The Wall Street Journal is reporting that mortgage rates are at their lowest level in 50 years! According to the author, Nick Timiraos, "Freddie Mac also said on Thursday that rates this week had fallen to an average 4.69%, which is the lowest level recorded since it began its survey in 1971. Brokers were quoting rates as low as 4.25% on 30-year loans on Thursday for well-qualified borrowers."

Demand Low for Home Purchase Mortgages

Yet, according to the article, demand for new mortgage financing has not been at the level that would have been expected with such low rates. Why would this be? Could it be that consumer confidence and job security play a greater role in the decision to purchase real estate? Of course The Wall Street Journal is looking at the real estate market nationwide. As I mentioned in the mid-month review of Westchester real estate activity in the Along the Sound market, sales have been good, especially for the month of June. We will review the details of the Along the Sound market for Westchester real estate sales for the month of June and the first half of 2010 by the end of the week. There will be positive news for this segment of the Westchester real estate market.

Bankrate.com has reported that mortgage rates have remained at historically low levels for the second week in a row. This is good news for the well-qualified buyer as conforming loans in New York are averaging slightly less than 5%. Check out this chart on Bankrate and see the loans available at area lenders.

Reports are that many homeowners are taking advantage of the low interest rates and refinancing their existing homes rather than purchasing a new home.  It's possible that the 2008 economic meltdown has made homeowners leery of overextending themselves in the real estate market. This is a good thing!

Westchester Home Sales

Good news for sellers as the market Along The Sound seems to be rebounding after a lackluster 2009. For the first quarter of 2010, there were 190 single family homes sold at a median price of $771k in a median time of 183 days on the market (DOM). The median price increased nearly 20% from last year, although DOM also increased by 19 days. This represents an increase of 100% in units sold compared with the same period in 2009. Total dollar sales value increased to $190.5mm from $95mm. All data taken from the Westchester Multiple Listing Service.

Future of Real Estate in Westchester

Some of this increased activity can be attributed to the tax credit the government has extended to first-time buyers which will end April 30^th. Also mortgage rates have been at historically low averages, contributing to buyer demand.

What does this mean for the buyer? Now is the time to call us and start the journey to find the house of your dreams.

What does this mean for the seller? Take advantage of the renewed interest in Westchester real estate and contact us today to help you prepare your home for sale and attract top dollar on your property.