While single-family home sales reached their highest number this year in the third quarter of 2017, they were still down more than 5 percent from a year ago, according to the latest market report by Westchester Real Estate Inc.
WRE, Inc. cited a unique mix of trends that are driving up sales -- and prices -- especially those involving multi-family homes, condos and co-ops. The trends are resulting in a limited inventory of moderately priced properties -- bad news for first-time buyers or those with modest incomes living or working in New York City and its suburbs.
There were significant gains in multi-family sales, which were up 22.5 in the third quarter of 2017 in Westchester County, along with a 10 percent jump in co-op sales.
But that resulted in relatively flat total home sales.
"Demand is still very strong in all segments," the quarterly report concluded.
"With co-op owners selling, this is pushing even more buyers into the marketplace for homes versus apartments. Income-producing properties and multi-generational homes are still a hot commodity."
Real estate experts remind those sitting on the fence that regardless of the mixed trends, buying a home remains a better investment than trying to save up for a new home while renting. That's because area home prices continue to rise, up 1.8 percent year-over-year.
The median single-family home price reached $680,000 in the third quarter of 2017, up from $668,000 in the third quarter of 2016.
Year-over-year gains were seen in all property types analyzed, including gains of 4.4 percent for condominium prices, 3.8 percent for co-ops, and a significant price jump of 12.3 percent for two- to four-family homes.
This is a reflection of the overall strength of the market and desirability of housing in Westchester, with an emphasis on more affordable options such as co-ops, condos and multi-unit dwellings, WRE's report concluded.
Overall inventory ended the quarter down by 12.2 percent compared to the same quarter of 2016, continuing the trend of lower and lower numbers of properties for sale that has been plaguing the market for several years. Once again, the multi-family home inventory saw the most dramatic decline at over 24 percent, but even co-op inventory was down nearly 20 percent and condos for sale dipped nearly 10 percent. "The lower inventory is pushing prices up but may at some point start to push frustrated and marginal buyers out of the market," WRE's report warned.
Westchester's real estate market remains very strong for sellers.
Single-family homes sold for 98.7 percent of their list price in the third quarter of 2017. "It continues to be a seller’s market overall, though only when the property is priced correctly," the county real estate group reported. "There is still little room for buyers to haggle on price with sellers whose properties are in the most desirable price and location categories."
Without the spring market’s frenzy and less pressure to close on a house before the start of another school year, there was less sense of urgency in buyers’ attitudes, WRE said, while noting: "Buyers are still buying, and good properties are still seeing multiple offers quickly, but even in those scenarios buyers are not exuberantly overbidding the asking prices."
The report also noted:
- Entry and mid-level homes can’t keep pace with demand, with inventory numbers in almost every market dropping each month throughout the quarter.
- The luxury sector has seen some slight upticks in sales, but mostly after significant price reductions.
- The recent wave of natural disasters is taking its toll with higher costs for building materials and a shortage of skilled construction labor as markets such as Florida, Texas, Puerto Rico and the U.S. Virgin Islands start to rebuild. These same disasters are contributing to the national scarcity of homes for sale.
- The New York City market seems to be operating on a similar track to Westchester. The number of transactions and median sale prices are similarly up year-over-year in the third quarter, with inventory steadily decreasing. However, there are fewer closings of large and pricey new construction units.
- On the financial front, interest rates did recently jump to a six-week high, though still remaining low from an historical perspective.
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