2012 1Q Residential Real Estate Report
White Plains, NY - The number of closed real estate sales among all types of residential properties in Westchester County in the first three months of this year barely exceeded those of the first quarter of 2011 by a scant one-third of one percent.The sales reported by Realtor firms participating in the Empire Access Multiple Listing Service largely flowed from the marketing of properties that were listed during the late autumn and early winter months of 2011.
Single family house sales increased by 1.4% and condominium sales by 5.0%, but co-operative unit sales were 3.0% fewer than last year’s, and 2-4 family house sales were down by 8.8%. In Putnam County, single family house sales were down by 19.4% from last year.
When seasonally adjusted1 and annualized against the average rates of sales of the past four years, Westchester’s first quarter sales were equivalent to an annual sales rate of 6,690 units, an increase of 11.5% over the fourth quarter of 2011. Not too much should be read into this high percentage since the slight increases in 2012 sales are compared against some very low performing prior quarters. Still, the trend line clearly is bending upward.
While sales volumes inched upward for the first quarter postings, average prices continued their downward slide. The median sale price2 of a Westchester single family house was $505,500, a sharp 8.5% drop from last year’s first quarter median of $552,750. This was the lowest Westchester median since 2002 when it first crossed the $500,000 level. Properties selling for $1 million or more accounted for 16% of total house sales, about two percentage points fewer than in the past two years. Westchester condominium and cooperative unit prices decreased, too, by 3.8% and 12.4% respectively.
In Putnam County the first quarter median sale price of $277,500 was down $71,500 or 20.5% from last year, and its condos and co-ops together posted a 34.0% decrease in their combined median sale prices3. However, it must be kept in mind that because of Putnam’s low overall sales count, relatively few transactions one way or the other can generate large percentage swings.
The supply of properties listed for sale increased, as it always does, from the close of the fourth quarter to the close of the first quarter, as sellers and buyers anticipated the spring market, but in comparison to the first quarter of 2011, Westchester’s 2012 first quarter inventory of 6,649 listed properties was just 18 units or 0.3% fewer. Putnam County experienced a 5.9% increase in inventory.
In assessing the condition of the real estate market it is always important to keep in mind that the data posted by the Multiple Listing Service are lagging indicators by some three to four months on average, as properties are listed, marketed, contracted, and then scheduled for closing. As this report is released, member Realtors are reporting significant market activity which hopefully will yield more closings to be included in the second quarter report.
Certainly the key influences are positive:
- Westchester-Putnam prices are exceptionally low, and in the case of cooperative units at a median sale price of around $145,000, exceptionally affordable for first time buyers.
- Average mortgage interest rates, while inching upwards a few basis points in the past couple of weeks, remain at record low levels. The rate on a 30-year conventional mortgage has been less than 5.0% since mid-2011, and currently is about 4.3%.
- Westchester’s unemployment rate continues to inch downwards. It was 7.6% in January 2011, and 7.4% in January 2012.
- The equity markets are in fairly good shape, notwithstanding the occasional scare from the European debt crisis. The Dow Jones Industrial Average, for example, has been on a steady climb since the autumn of 2011 to and past the 13,000 level. The DJIA is a confidence builder (or destroyer) even for potential homebuyers with no investments there.
- The foreclosure situation in Westchester is manageable and is not depressing the local real estate market. There are about 125 filings per month, most of which are disposed of through short sales; only about 15 monthly proceed to a judgment and end up as hard-to-market REOs.
What’s needed to firmly rejuvenate our real estate market is widespread confidence that these favorable factors will persist.
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 prior quarters’ customary shares of total annual sales.
2 The median sale price is the mid-point of all reported sales, i.e., half of the properties sold for more than the median price and half 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.
3 There are very few co-ops in Putnam County; there were just 7 co-op sales in the first quarter of 2012.
The Empire Access Multiple Listing Service, Inc. (EAMLS) is a subsidiary of the Hudson Gateway Association of Realtors, Inc. (HGAR). For more information, visit www.hgar.com.
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