2011 FIRST QUARTER RESIDENTIAL REAL ESTATE SALES REPORT
Westchester and Putnam Counties, New York
Realtor firms participating in the Empire Access Multiple Listing Service reported 1,247 closed residential transactions in Westchester County through March 31 of this year as against 1,313 in the comparable period of 2010, a 5% decrease. Putnam County closings numbered 154 so far this year, an increase of 12% from last year. However, Putnam’s percentage increase was measured against a very small base and was generated by just 17 more sales than last year.
Among the property types tracked by the MLS, the cooperative unit sector experienced the largest decrease of sales, 9% in Westchester, from this period last year.
On a seasonally adjusted basis, Westchester’s first quarter sales were equivalent to an annual rate of about 6,470 units, an increase of 10% over the fourth quarter 2010 rate but a decrease of about 5% from the first quarter rate of 2010. This mixed performance reflects the fact that 2010 comprised two distinct markets. In the first half of the year sales volume was inflated by the tax credit stimulus program; the second half’s volume, absent the stimulus, exposed the underlying weakness of the market. Seen in that light, the 2011 sales volume performance so far this year has split the difference by falling short of the stimulated sales rates but exceeding the self-powered market rates of the latter half of 2010.
Average prices slipped back along with sales volumes. The first quarter median sale price
2 of a single family house in Westchester fell 8% to $552,750 from last year. It was at its lowest level since the first quarter of 2009 when the recession was most severe. Overall, prices are about 15% lower than they were at the top of the market in 2006 and 2007. In the past two quarters, high-end sales ($1 million or more) became less of a force for generating high average prices. They accounted for 16% of all sales in the fourth quarter of 2010 and 19% in the first quarter of 2011, whereas the norm for many prior quarters had ranged from 20% to as high as 28% or more.
Condominium and cooperative median prices declined too. The first quarter Westchester condo median of $325,000 was 11% lower than last year’s; the co-op median of $165,000 was 3% lower. Multi-family properties (2-4 dwelling units) also experienced a decline of 7%, to a median of $322,500.
As was the case for its sales volume, Putnam County bucked the downward trend with a median price of $349,000 for a single family house, up 13% from last year. However, as was noted for sales volume, the base was small and only a few transactions made a large difference.
Westchester’s end-of-quarter inventory of 6,667 units in all categories was just 1.5% more than at March 31 in 2010. There was a wide range among the different property types, however. Single family house inventory closed 4% higher and co-op inventory closed 7% higher, but condominium inventory declined by 14%. Putnam County inventory was down nearly 10% from last year.
The closings in the first quarter of 2011 largely reflected listing and market activity that took place in the late autumn through December of 2010. At that time our area’s unemployment rate had eased down to around 7.3%. The rate recently eased still further, to less than 7%. However, unemployment must be seen to be firmly in decline for a sustained period and by convincing amounts before consumers in any large numbers regain sufficient confidence in their personal economic circumstances to make significant financial decisions such as purchasing real estate.
Also in the generating period for these first quarter results, consumers watched mortgage interest rates gently but steadily increase from record lows under 5.0% for 30-year conventional mortgages. The average rate re-crossed the 5% threshold in mid-December and has hovered in the 5.1-5.3% range since then. The rate increase, however slight, coupled with tighter lending standards, has put some downward pressure on real estate sales.
On the positive side, the equity markets have performed well since the autumn of 2010. The leading indicator, the Dow Jones Industrial Average, rose from about 10,000 in September of 2010, to nearly 12,500 by March of 2011. But that is not nearly enough to convince the average consumer that the recession is over and that now is a good time to buy a property. Further, the ongoing division and disarray among the nation’s elected officials as to how best to resuscitate the economy, which might entail radical changes in the machinery of real estate financing and ownership, is prolonging the uncertainty of prospective home buyers.
Given the predominantly negative environment for real estate, however, the first quarter results in our area were encouraging in that, even without a stimulus program, they nearly matched last year’s elevated sales rates. Our market may be ending its total dependence on consumers who
mustbuy or sell for some reason, and those few secure buyers who have the means and the desire to take advantage of the region’s current low housing prices and favorable mortgage interest rates. In other words, a return to normal, where people buy and sell properties because they want to, not just need to. These 2011 first quarter results will serve as a useful baseline against which future market driven sales rates can be measured.