Real Estate Agent with William Raveis Legends Realty Group 30PA1082583

While the area's residential real estate market has struggled in recessionary mode all year long, there has nevertheless been a steady improvement in the sales rate over the past nine months. Realtor participants of the Westchester-Putnam Multiple Listing Service, Inc. reported a total of 1,898 closings of Westchester residential real estate transactions in July through September, a level that was 9.7% less than last year's third quarter closings, but that was considerably improved over the second and first quarter sales volumes which were off by 30.7% and 36.6%, respectively, from the prior year.

On a seasonally adjusted basis1, the third quarter Westchester closings were equivalent to an annual sales rate of 6,170 units, an increase of 30.7% over the prior quarter, constituting a very large bounce-back from the barely 4,000-unit level posted in the first three months of the year.

Putnam County's performance, though not as vigorous as Westchester's, also showed improvement in the third quarter. The 186 posted closings were 18.1% fewer than last year's, whereas the first quarter closings were down by 30.5%.

Third quarter single family median2 sales prices, $630,000 in Westchester and $330,000 in Putnam, were below last year's levels by 11% and 12% respectively, constituting a modest recovery from the second quarter when median prices were running 16% and 19% below last year's levels. Most of the price decrease since the start of the recession has been attributable to across-the-board market depreciation from lack of demand but part of it also results from a pronounced fall-off in high-end sales.

In 2008 and earlier, million-dollar-plus sales accounted for as much as 25% or more of all transactions. That percentage abruptly fell to 13% in the first quarter of 2009; it increased to 17% in the second quarter and to 20% in the third quarter but still falls short of its former high levels.

The condominium and cooperative sectors fared better as to prices. The $362,000 median sale price of a Westchester condominium was 8.6% less than last year's. The co-op median of $170,500 was 9.2% lower than last year's. The median sale price of Multi-family (2-4 unit) houses was $399,500, retaking its place from condominiums in the second quarter as the second most expensive housing type in Westchester.

Notwithstanding the continuing sluggish pace of sales in the region, there has been no buildup of actively marketed inventory. The end-of-quarter supply of single family houses in Westchester barely changed at all from the third quarter of 2008 to 2009. Total inventory of all property types actually decreased by 5.4%.

In Putnam County the total inventory decreased by 7.6%. The number of units now on the market is not much different than in 2007 before the looming recession became truly apparent.

The third quarter closings in Westchester and Putnam Counties largely followed upon marketing activity that occurred in the late spring and summer months, a period that produced mostly positive economic indicators favorable to real estate. Mortgage interest rates, which had reached a short-term peak of about 6% on 30-year conventional loans in mid-June, subsided thereafter to a range of 5.6-5.8%.

Except for a brief dip in early July, the equity markets exhibited sustained growth from May through August; the Dow Jones Industrial Average crossed the 9,000 mark in late July. The most serious negative indicator during this period was, and remains, a Westchester and regional unemployment rate around 7.5%. Conservative lending practices also continue to put a brake on the market.

On a nine-month basis, Westchester County's sales volume of 3,975 units was 24.1% less than in 2008, and a hurtful 43.3% less than in 2007. The second and especially the third quarter results, however, are trending to a steady improvement in sales volumes. Further, there is a slight suggestion in the data that overall prices are at or close to bottom, and that the high-end segment of the market is inching its way back to a larger market share though probably not its former prominence.

These factors, together with the restrained local inventory, suggest that there exists pent-up demand to complement pent up desire to sell - a real estate market in the remaking if only the larger economic environment would cooperate.


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Christopher Pagli

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