2010 Westchester Real Estate Market in Review

If you’re an optimist you believe that the real estate market has turned for the better. However, if you’re a a pessimist then you would say, “yeah it’s good, but not as good as 2006 or even 2007″. Yes, very true. The truth is that its going to be a while before the Westchester real estate market will see 20% appreciation again-seemingly over-night. I mean, what good could possibly come out of a real estate market where the median sale price of a single family home was $730,250-Westchester’s peak in 2007. I could assure you without any statistical data to back up my claim that household income levels were not rising at that same rate. Moving forward…

Recently released real estate activity of 2010 by the Westchester Putnam Association of Realtors.

The total number of homes sold in 2010 compare to 2009 was a promising 13% increase across the board led by an almost 20% increase in number of single family homes sold. Co-op sales remained unchanged compared to 2009. Not surprisingly, the multi-unit home sales actually decreased slightly by 3.4%. It is no great secret in those to those real estate industry that the reduction of home sales has not been caused entirely by a lack of demand, but by a tightening of lending practices–for obvious reasons. The group most affected by the lack of lending has been the multi-unit owner-occupied home buyers.

source:EMLS

source:EMLS

Although the sales data for 2010 are very positive–which indeed they are, it did not occur naturally. We must not discount the impact the first-time home buyer credit had on the final tally. According to the Westchester Putnam Association of Realtors, “The apparent rejuvenation of the market at that time was largely attributable to the first-time homebuyers tax credit that required contracts to be signed by April 30 and closed by June 30 (later extended to September 30). This resulted in a burst of sales of condominiums and cooperatives, the housing types that are most affordable to first-time buyers. The single family house market also benefited, however. The resurgence was so strong that it appeared there would be continued growth even after the tax credit program expired.” As indicated by the chart below, the bulk of the sales in 2010 were generated in Q1 and Q2. After the tax credit, which presumably expired on June 30, home sales did staggered downward-significantly. (From personal experience during the latter part of 2010, I did recognize a sense of apprehension on many buyers who expected the tax credit to be extended for a second time).

source:EMLS

The one surprising number in all of this was the median price. Median price actually increased by 8.6% in Westchester from $580,000 in 2009 to $630,000 in 2010. I figured that all the short sales and foreclosures would bring the median number lower than 2009′s median. According the local board, “foreclosure activity to date appears not to have caused serious damage in terms of excess inventory or a depressed price structure. Foreclosure filings recorded by the Westchester County Clerk’s office declined by 50% in the fourth quarter of 2010 compared to 2009…” I interpret that to mean that Westchester County is slow to catch on and the banks are just too busy foreclosing on the rest of the country. We’ll just have to wait and see how the inventory and sales number fair in 2011.

Oddly enough, the median sale price of every other property type either remained unchanged or decreased. What’s even more shocking is that the median sale price of 2-4 units was actually lower than the median price of a condo– $348, 000 and $355,000 respectively.

source:EMLS

Enough analyzing. I got a headache. Regardless of what the numbers indicate, my answer will always stay the same when someone asks me, “Is is a good time to buy?”–The time to buy is when you’re good and ready! Forget about timing the market. If you can’t afford the house now or have doubts, then it’s probably not the right time. However, when you’re ready and your numbers make sense, here’s my business card