Westchester County Real Estate Market Statistics, 4th Quarter 2011

Courtesy Of The Hudson Gateway Association of Realtors

Westchester and Putnam Counties, New York

http://www.WestchesterCountyRealEstateMarket.com

The surge of sales activity in 2010 resulting from the stimulus of the federal home buyers tax credit program failed to spill over into 2011. Rather, in Westchester County last year, as reported by Realtor brokerages participating in the Empire Access Multiple Listing Service, the total 6,194 closed residential sales were 6.0% fewer than in 2010. Single family house sales were off by 4.4%, condominiums by 10.9%, and cooperatives by 8.5%. Putnam County house sales differed by only one unit from 2010.

Considering the fourth quarter of 2011 alone, there was a marked increase in the sales volume for co-ops which was up 20.1% from last year, but the single family house sector continued to disappoint with a volume 5.0% below last year’s sales. Seasonally adjusted

the fourth quarter’s rate of overall residential sales was 4.9% slower than the third quarter’s rate, and within the single family house sector, 11.0% slower.

Prices trended downward, too. The fourth quarter median

sale price of a single family house in Westchester was $525,000 - 8.9% lower than a year ago, and the lowest median for any quarter since 2002. Some of that decrease in the median was attributable to a fall-off in the proportion of high-end ($1,000,000+) sales which accounted for only 13.7% of total sales whereas 16% or more has been the fourth quarter norm of the past several years. Most of the decrease, however, was simply the result of weak demand that prompted price concessions from sellers.

The largest fourth quarter price decrease took place in the cooperative unit sector, where the median sale price of a Westchester co-op was $146,000, down 15.2% from a year ago. But as noted above, the co-op sector also enjoyed a large increase in the number of fourth quarter sales, suggesting that this sector may have finally found the price points that generate traffic.

That conjecture is bolstered by the fact that co-ops were the only residential sector to post a year-end increase in inventory, albeit a small one at 2.7%. Typically in this region, an improving market encourages potential sellers to list their properties, and thus contrary to classic supply and demand theory, inventory actually increases even as sales volume increases too.

The opposite happens when the market is seen to be uncertain or soft: sellers withdraw their listings and inventory decreases as a result. Unlike the co-op sector this year, the single family, multifamily and condominium sectors all posted reduced inventories from 2010, suggesting a continuing lack of enthusiasm by consumers to enter the real estate market, at least not for these more expensive housing types.

The reported fourth quarter closings largely reflected listing and marketing activity that took place in the summer and early autumn months of 2011. Some of the major forces affecting real estate at that time were pushing in different directions – and still are. For example, mortgage interest rates in mid-2011 were trending downwards and had dropped below an average 5.0% rate for 30-year conventional loans.

That average just recently dipped below 4.0% and in theory should be making housing much more affordable, especially for moderate income and first-time buyers. Yet there is convincing anecdotal evidence from Realtors in our region that the benefit of low rates is increasingly negated by tougher qualification ratios, required higher credit scores, and slower processing by lenders. Overly conservative appraisals are said to be impairing transactions too.

Consumer confidence in the economy also plays a major role in the decision to buy or sell real estate. In July and August of 2011 consumers were confronted with a scary display of extreme volatility in the equity markets, largely brought on by a sovereign debt crisis in Europe, a surprise circumstance that probably had not been on the average person’s economic worry list. Will there be more of that?

Another confidence-sapping economic condition is the painfully slow improvement in the job market. Westchester and Putnam Counties are among the six counties with the lowest unemployment rates in New York, around 6.3%. But at the same time, the improvement over the course of 2011 was only around three-tenths of a percent – hardly enough to impart a sense of economic security for households contemplating a home purchase.

Perhaps the greatest erosion of confidence is of political origin, in the sense that there are no undisputed plans in place as to how the economy is to be managed, hence consumers don’t know what to expect, and they hunker down, postponing any decision making of consequence such as home buying.

If that is true, then we’ll have to wait for elections to establish a firm action agenda for recovery, and the local real estate market in 2012 will look pretty much like 2011 as to sales volumes and prices, unless still deeper price reductions bring on a burst of sales such as appears to have been the case with co-ops in the fourth quarter.

The Empire Access Multiple Listing Service, Inc. (EAMLS) is a subsidiary of the Westchester Putnam Association of Realtors, Inc., the latter of which is pending a name change to Hudson Gateway Association of Realtors, Inc. EAMLS serves more than 880 real estate offices having listings in Bronx, Westchester, Putnam and Dutchess Counties. All data tables refer to Westchester County sales unless expressly noted otherwise. The reported transactions do not include all real estate sales in the area or all sales assisted by the participating offices but they are fairly reflective of general market conditions.

EAMLS does not provide data on sub-county geographic areas. Persons desiring sub-county data are invited to contact participating real estate offices in the desired areas. Any text or data from this report may be reprinted with attribution to Empire Access Multiple Listing Service, Inc. as the source. Prior reports dating back to 1981 are available on the Realtor Association’s website, www.wpar.com; click on Market Statistics. A membership directory searchable by municipality is also available on that site.

1

The seasonally adjusted rate is an annualized rate for a given quarter. It represents what the total sales volume would be for the whole year based on the quarter’s customary share of total annual sales.

2

The median sale price is the mid-point of all reported sales, i.e., half of the sales were for more than the median price and half were for less. The median is not affected by unusually low or high sale prices. The mean sale price is the arithmetic average, i.e., the sum of all sales prices divided by the number of sales. The mean does reflect the influence of sales at unusually low or high prices.