It feels like July has barely started, and yet the month is halfway over. Despite the fact that summer is here, and it’s usually a slow time of year, the real estate market continues to impress many.
Already, 5 homes have gone into Conditional Contract since July 1st, while 5 properties are Pending and waiting to close. Looking at the Sold listings, a whopping 22 homes have closed in the first half of July alone. That beats the 13 homes which were sold during the same period of time in 2009.
Double dip? All signs point to “Not in Scarsdale.”
What are the signs that we may have actually turned the corner?
1. The Number of Homes Sold. There are more Buyer’s in the market today, and they are ready to do business with serious Seller’s. More homes are seeing multiple offers when they are priced accurately for today’s current market. Although Mortgage Companies are taking longer on average to approve loans, they are still doing so and have even reduced fees to attract more people.
Don’t let “Seller Pricing” ruin your perception of the market. Seller Pricing is a phenomenon that will exist in any type of market, and accounts for a majority of the homes that have a lengthy “Days On Market” average. Seller Pricing takes place when most homes are priced by the Seller, and not the Realtor, usually with 2006’s prices in mind, and are actively listed for longer than 60-90 days without any price reductions or improvements.
2. Professionals are busy again. Real estate’s “first responders” - those who are involved early on a project can be a good barometer of pending activity. Real Estate Agents, architects and engineers will be the first to see an increase in business, so what they are working on is important to know.
3. Unemployment. It’s a catch-22, new businesses cannot open unless people are willing to spend more, so they are unable to hire any new employees. People are unwilling to spend more unless they have steady employment. For the most part, the unemployment rate seems to have somewhat stabilized in the nation. And while the rate has hit Scarsdale too, we are not impervious to everything after all, this area continues to have a statistically low unemployment rate when compared to other communities such as White Plains and Yonkers.
4. Retail sales. Stuff. The stuff we need and the stuff we want. As we move into a more stable economy, consumer confidence increases and more purchasing occurs on the “want” side of the ledger, as opposed to the “need” side. A good indicator will be the sales results from the Scarsdale Sidewalk Sale, which is taking place next week from July 29-31st.
5. Real estate activity in vacant spaces. It is rumored that the long-vacant Waterworks space is set to be leased by a new tenant. Also new to the area, Yogo Joy, and taking over for Michael’s is Good Life Gourmet. These kinds of expansions signal confidence and indicate that the proprietors of these new businesses are ready to put their bets on the table.
6. Short-term leases acceptable. Landlords sensing a market beginning to turn are beginning to favor shorter-term leases with the ability to reset a tenant’s lease to a higher market rent at a point 24 to 36 months in the future.
Overall, real estate is a cyclical industry with a long cycle time (and longer recovery time) than the stock market. Pay attention to the signs, but don’t be afraid to ride the cycle as well.
*Below is a photo of 9 Dobbs Terrace in Greenacres, which recently received multiples offers and went to what is called "Highest and Best Offers."