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Rockland County Real Estate: What Happened in 2008?

By Jennifer Mallory

Real Estate Agent with Keller Williams Hudson Valley Realty

January 28, 2009 01:34 AM

You've undoubtedly heard, and it bears repeating yet again: Real estate is a local business. The scary housing headlines heard on CNN or read in the papers are national in scope and usually are based on a national average or single point of reference which doesn't accurately portray the situation in local real estate markets.

So what happened to the real estate market in Rockland County, NY in 2008? From Q1 to Q2 2008, the average sales price of a single family home dropped 4.7%. Prices remained stable in Q2 and Q3, actually rising a tiny bit in Q3. From Q3 to Q4 home prices in Rockland County experienced an additional 5.3% decrease.

A large percentage of the home sales that occurred in Q4 2008 went into contract prior to the credit crisis in August. The crisis obliterated half of the mortgage lenders in the country, and we will not be able to gauge the true effect these bank failures on the Rockland, NY real estate market until the first half of 2009. This national event will continue to have ramifications on Rockland real estate as lending standards have become stricter, making fewer buyers eligible for loans.

The number of foreclosed and short sale properties also affects prices in Rockland County. A foreclosure in your neighborhood can bring down the value of nearby homes by 10%. Rockland County didn't see a significant number of foreclosures until January of 2008. In 2008, of 1183 single family home sales recorded by the GHVMLS, 66 of them, or 5.58% were foreclosures. The vast majority, or 94.42%, were arms-length transactions.

Public perception has put a drag on housing prices in Rockland. The general perception is that there is a significant amount of inventory on the market, and that houses are not selling. This is not true. What is true is that sales are taking longer, from an average of 99 days in 2008, from a low of 62 days in the height of the market in 2004. There are fewer transactions, as well, 1162 in 2008 vs. 1512 in 2007.

In September 2008, about 1500 single family homes were on the market in Rockland County. At the close in December 2008, there were only 1050. About one third of the market either sold or expired in the fourth quarter of 2008. The inventory that expired consisted of homes that were either overpriced or not in top condition. In any market, the houses in the best condition at the best price are always the first to sell. Whether the homes that expired will come back on the market in the Spring of 2009 at lower prices or in better condition remains to be seen.

So, where do the events of 2008 leave us in the first quarter of 2009? Now is a great time to be a buyer. Interest rates are historically low, and probably will remain low for about 6 months. Home prices have decreased and are now at 1998 levels of affordability. And it is the beginning of the spring market, when traditionally there has been the most choice for buyers.

For sellers, too, now can be a good opportunity to move on. People who've owned their home for at least six years are likely to make a terrific return on their investment by selling now. Move up sellers can get great deals on houses that might have been out of reach just a year ago. When buyers see a good value on the market, they are willing to pay for it.

The key to smart buying or selling in this market is to have the necessary information and to create a strategy that takes advantage of the opportunities in the market. I've spent a significant amount of time analyzing the market in order to have the most comprehensive information available to help my clients make a smart move. If you have questions, please give me a call. I'd be happy to share my insights.