WESTCHESTER MARKET WATCH third quarter
2013
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INTRODUCTION Sales flourished during the third quarter of 2013, with both dollar and unit volume increasing by double digits in the majority of our markets and price categories. This is the fourth quarter of consistent sales growth, and all metrics support a housing market that is in full recovery mode: • Market activity is at a five-year high • Prices are stable and median selling prices are improving • Inventory levels continue to decline In tandem with the continued strengthening of the real estate market comes the need for an educated perspective on the housing metrics. More than ever buyers and sellers alike need to have a realistic understanding of what is happening, why it’s happening and what to expect going forward in order to capitalize on current market conditions. The strong sales pipeline that was established during the first quarter of 2013 has steadily increased through the year and resulted in year-over-year sales gains as well as price stability. In the third quarter of 2013, Westchester County closed dollar volume was 37% higher than the third quarter of 2012, while unit sales were 26% higher. The gateway communities of Southern Westchester County continue to enjoy the highest upward sales trajectory both in terms of units sold as well as median selling prices. Single family home sales in Northern Westchester County are also exceptionally strong with dollar volume 25% higher and unit sales 19% higher than the third quarter of 2013. Reflecting the improving health of our real estate market, sales are strengthening for properties at all price points. Notably in the third quarter, entry level home sales, which have been leading this recovery, are experiencing slower sales gains than the broader market. This is attributed primarily to depleted inventory levels. It is the luxury market that is starting to turn the corner, tracking at higher levels than the overall market this quarter, with sales gains of more than 50% versus last year. The return of the luxury buyer is a strong indicator of housing confidence. The market is being supported by a broad group of buyers motivated by pent-up demand and excellent market conditions, including low prices and favorable interest rates. Sellers are comfortable with selling in this market and realistic in their valuations. Median selling prices continue to improve, reflecting level prices and heightened sales activity in the upper price ranges. Buyers do remain price-sensitive and highly discriminating in their choice of home. The condominium and co-operative markets are also contributing to the gains made in the overall housing market. In fact, in communities like Bronxville where there is minimal inventory in the entry level market, condominiums and co-operatives are experiencing above market sales gains. I hope you find our Third Quarter 2013 Westchester Market Watch helpful as you evaluate your own personal real estate holdings and plans for this coming year. At Julia B. Fee Sotheby’s International Realty, we are committed to excellence in everything that we do, and we dedicate ourselves to providing the highest level of service and expertise to buyers and sellers alike in all price categories. If we can be of service, please don’t hesitate to call. With best regards,
Paul E. Breunich President and Chief Executive Officer Julia B. Fee • William Pitt Sotheby’s International Realty +1 203.644.1470 | pbreunich@juliabfee.com WESTCHESTER MARKET WATCH
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SINGLE FAMILY HOME SALES CONTINUE UPWARD TRAJECTORY Third quarter 2013 transaction volume continued to improve as a broad swath of buyers actively engaged in the market. Continuing a trend that began in the third quarter of 2012, the vast majority of our communities experienced both monthly and quarterly sales gains, often at double-digit levels. Buyers are returning to the housing market in increasing numbers as confidence in both real estate and the general economy improves and job growth in the New York City metro area continues. The increase in mortgage interest rates during the third quarter provided a psychological stimulus to buyer activity, serving as a reminder that the historically low borrowing costs we have been experiencing for several years will not last forever. As has been true for some time, Southern Westchester County is leading the way with third quarter dollar volume up by 30% versus the same time a year ago and unit closed sales up 21%. Sales activity in Northern Westchester County is also exceptionally vibrant with third quarter dollar volume 30% higher than a year ago and unit sales 40% higher.
6167+ 64+ 63+ 77+ +96 3134+ 27+ 31+ 30+ +45 SINGLE-FAMILY HOME UNDER CONTRACT SALES 2008 - 2013 (In Units) 966
3q13
775
618
3q08
672
3q09
3q12
642
3q10
636
3q11
453
315
3q08
SOUTHERN WESTCHESTER
340
3q09
3q13
273
3q10
316
3q11
304
3q12
NORTHERN WESTCHESTER
Consumer confidence continues to hover at its highest levels in five years. During the third quarter of 2013 we saw the Consumer Confidence Index range between 81.8 and its current 79.7 (1985=100). In tandem the Present Situation Index, which reflects how people feel about their employment and income prospects, increased further to 73.0. Improving consumer confidence is a significant factor in bringing buyers back into the housing market and particularly local buyers, who are generally discretionary buyers. Neil Dutta, head of U.S. Economics at Renaissance Macro Research LL in New York, says, “If you ask someone how things are right now, they’re all saying it’s better to an extent they haven’t seen in quite some time. The labor situation is improving and consumers have more intentions to buy major things like homes.” Southern Westchester County is currently experiencing exceptional volume growth compared to its post-2009 lows, driven by its proximity to New York City, top-rated schools and charming communities as well as the flourishing Manhattan real estate market, where rising prices and depleted supply are motivating younger families to move to the suburbs. The housing market has been very strong this entire year compared to markets in recent memory, as reflected in year-to-date statistics that show that dollar volume CONSUMER CONFIDENCE INDEX 85 75 65 55 Jul 2012
Aug
Sep
WESTCHESTER MARKET WATCH
Oct
Nov
Dec
Jan 2013
Feb
Mar
Apr
May
Jun
Jul
Aug
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has increased by 24% versus 2012 and unit volume is 21% higher. Under contract sales, which represent the forecasted sales pipeline, remain very strong as well, standing at 25% higher than the third quarter of 2012. With the eight-to-twelve-week lag from pending to closing, under contract sales are expected to translate to double digit fourth quarter sales increases versus the same period a year ago. While all price points have performed relatively well in the third quarter of 2013, it is the luxury segment, defined as homes valued at $3,000,000 and higher, that has dramatically outperformed the remainder of the market. Coming off minimal activity levels during the first half of 2013, pending sales increased by 47% during the third quarter and closed sales surged by 200% to the highest level in five years. Both Southern and Northern Westchester County experienced meaningful sales activity. Year-to-date seventyfive homes valued at $3,000,000 and higher have sold. Even more impressive are the sixteen homes that closed during the third
SINGLE FAMILY HOME UNDER CONTRACT AND CLOSED SALES under contract sales
so. westchester
SOUTHERN WESTCHESTER closed sales
3q13
3q12
3q13 vs 3q12
3q13
3q12
3q13 vs 3q12
ytd
2013
ytd
2012
ytd
2013 vs ytd 2012
closed dollar volume
dom*
3q13 vs 3q12
3q13
966
775
25%
1394
1110
26%
2,932
2,421
21%
26%
124
Ardsley
22
16
38%
46
30
53%
82
64
28%
75%
126
Blind Brook
25
10
150%
39
21
86%
79
49
61%
80%
126
Briarcliff Manor
19
19
0%
35
25
40%
68
43
58%
34%
119
Bronxville
14
10
40%
28
31
-10%
71
71
0%
5%
122
Dobbs Ferry
11
11
0%
23
20
15%
50
49
2%
14%
146
Eastchester
45
23
96%
50
28
79%
88
63
40%
31%
116
Edgemont
16
20
-20%
35
34
3%
95
97
-2%
18%
140
Elmsford
11
16
-31%
16
12
33%
36
23
57%
30%
136
Greenburgh
41
30
37%
61
26
135%
105
73
44%
135%
129
Hartsdale (P.O.)
25
18
39%
43
23
87%
76
56
36%
90%
127
Harrison
51
30
70%
48
40
20%
114
98
16%
53%
145
Hastings
13
18
-28%
34
17
100%
73
41
78%
143%
112
Irvington
23
23
0%
29
38
-24%
63
65
-3%
-10%
116
Mamaroneck**
48
44
9%
112
91
23%
215
178
21%
28%
106
Mount Pleasant
21
24
-13%
31
28
11%
63
66
-5%
19%
112
Mount Vernon
25
22
14%
27
25
8%
72
75
-4%
35%
138
New Rochelle
85
73
16%
119
92
29%
261
196
33%
26%
134
Ossining
43
41
5%
54
43
26%
116
97
20%
3%
109
Pelham
32
17
88%
43
50
-13%
109
102
7%
-12%
145
Pleasantville
24
20
20%
32
26
23%
58
54
7%
27%
166
Pocantico Hills
2
1
100%
6
4
50%
7
6
17%
27%
204
Port Chester
37
17
118%
39
27
44%
78
60
30%
47%
121
Purchase (P.O.)
18
10
80%
19
5
280%
33
18
83%
306%
141
Rye City
38
26
46%
80
54
48%
152
119
28%
137%
119
Rye Neck
20
10
100%
23
15
53%
46
36
28%
109%
111
Scarsdale
47
53
-11%
105
90
17%
205
178
15%
18%
125
Tarrytown
14
16
-13%
24
22
9%
48
42
14%
2%
130
Tuckahoe
12
5
140%
10
11
-9%
33
27
22%
11%
115
Valhalla
22
10
120%
26
13
100%
67
30
123%
108%
112
White Plains
58
54
7%
80
72
11%
173
134
29%
5%
110
Yonkers
147
116
27%
139
126
10%
329
301
9%
19%
125
*DOM: Median Days on Market **Mamaroneck School District includes Larchmont P.O.
WESTCHESTER MARKET WATCH
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quarter at $5,000,000+ versus one in the third quarter of 2012. Year-to-date, twenty-six homes have sold in this trophy home range versus nine in the same period of 2012, and the pipeline is strong with another eight homes under contract. Twenty-one of the twenty six homes were in Southern Westchester County, and were primarily waterfront or new construction properties located in prime areas of the county. SINGLE FAMILY HOME UNDER CONTRACT AND CLOSED SALES under contract sales
NORTHERN WESTCHESTER closed sales
3q12
3q13 vs 3q12
3q13
3q12
3q13 vs 3q12
3q13 vs 3q12
3q13
453
304
49%
607
433
40%
1,291
1,030
25%
30%
137
Bedford
56
35
60%
77
64
20%
164
160
3%
46%
122
Byram Hills
42
32
31%
72
41
76%
126
92
35%
79%
144
Chappaqua
42
25
68%
82
52
58%
183
109
66%
43%
123
Croton-Harmon
17
14
21%
30
13
131%
63
40
58%
97%
105
Hendrick Hudson
29
18
61%
29
30
-3%
62
67
-7%
12%
113
Katonah-Lewisboro
45
41
10%
68
70
-3%
150
147
2%
8%
135
Lakeland
63
45
40%
62
53
17%
151
144
5%
13%
157
North Salem
19
11
73%
24
17
41%
55
53
4%
31%
143
Peekskill
22
20
10%
18
15
20%
54
39
38%
16%
144
Somers
48
25
92%
52
29
76%
110
87
26%
117%
123
Yorktown
69
38
82%
92
49
88%
168
97
73%
86%
124
ytd
ytd
2012
ytd
2013 vs ytd 2012
dom*
3q13 no. westchester
2013
closed dollar volume
*DOM: Median Days on Market
EXTRAORDINARY WATERFRONT RESIDENCE
WESTCHESTER MARKET WATCH
MAMARONECK, NY - MLS: 3329992
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MEDIAN SELLING PRICES GENTLY RISE The median selling price for a single family home in Westchester County rose by 4% during the third quarter of 2013 compared to the third quarter of 2012, which was the result of a combination of leveling prices and more high-end properties being sold. Prices are subject to upward pressure in markets such as Bronxville, where depleted inventory has created conditions in which demand has outpaced supply for several consecutive quarters. Multiple bids are reported with increasing frequency in the most in-demand price segments. Typically these are properties offered at a compelling price where buyers sense exceptional value. Buyers today are knowledgeable, follow inventory in their chosen market very closely and are more cost conscious. According to Jason Wilson, Manager of our Scarsdale brokerage, “We have a smarter, more qualified consumer than we did during the 2004-2006 bubble, which is impacting valuations and expectations.� It should also be noted that bank appraisals continue to be ultra-conservative, which will influence price appreciation. SINGLE FAMILY HOME MEDIAN SALES PRICE CHANGE
SOUTHERN WESTCHESTER twelve-month median sales price
quarterly median sales price
3q13
3q12
3q13 vs 3q12
3q11
3q10
3q09
3q13
3q12
3q13 vs 3q12
Ardsley
$630,000
$647,000
-3%
$521,000
$615,000
$603,000
$594,000
$518,000
15%
Blind Brook
770,000
773,000
0%
805,000
925,000
733,000
749,000
753,000
-1%
Briarcliff Manor
875,000
890,000
-2%
745,000
965,000
830,000
814,000
750,000
9%
Bronxville
1,825,000
1,350,000
35%
1,754,000
1,825,000
2,150,000
1,670,000
1,451,000
15%
Dobbs Ferry
730,000
633,000
15%
703,000
629,000
660,000
666,000
688,000
-3%
Eastchester
610,000
565,000
8%
609,000
665,000
519,000
322,000
372,000
-13%
Edgemont
1,035,000
860,000
20%
965,000
1,195,000
695,000
832,000
830,000
0%
Elmsford
416,000
365,000
14%
428,000
425,000
414,000
381,000
403,000
-5%
Greenburgh
450,000
449,000
0%
464,000
395,000
490,000
425,000
438,000
-3%
Hartsdale (P.O.)
545,000
560,000
-3%
485,000
580,000
580,000
513,000
535,000
-4%
Harrison
1,138,000
900,000
26%
1,400,000
1,433,000
1,200,000
1,125,000
940,000
20%
Hastings
713,000
625,000
14%
640,000
611,000
620,000
649,000
635,000
2%
Irvington
800,000
793,000
1%
875,000
810,000
788,000
888,000
730,000
22%
Mamaroneck*
1,052,000
1,018,000
3%
1,100,000
1,000,000
820,000
993,000
999,000
-1%
Mount Pleasant
515,000
465,000
11%
525,000
505,000
565,000
515,000
494,000
4%
Mount Vernon
370,000
325,000
14%
350,000
350,000
385,000
335,000
325,000
3%
New Rochelle
599,000
619,000
-3%
625,000
635,000
618,000
564,000
575,000
-2%
Ossining
362,000
395,000
-9%
398,000
343,000
409,000
365,000
370,000
-1%
Pelham
740,000
667,000
11%
949,000
790,000
860,000
763,000
684,000
12%
Pleasantville
599,000
553,000
8%
645,000
682,000
599,000
580,000
520,000
12%
Pocantico Hills
636,000
913,000
-30%
675,000
890,000
703,000
695,000
675,000
3%
Port Chester
408,000
400,000
2%
446,000
443,000
450,000
408,000
400,000
2%
Purchase (P.O.)
1,100,000
965,000
14%
1,180,000
2,547,000
1,189,000
1,185,000
1,483,000
-20%
Rye City
1,678,000
1,090,000
54%
1,190,000
1,205,000
1,080,000
1,558,000
1,600,000
-3%
Rye Neck
833,000
640,000
30%
850,000
1,226,000
1,782,000
810,000
708,000
14%
Scarsdale
1,310,000
1,330,000
-2%
1,204,000
1,235,000
999,000
1,300,000
1,263,000
3%
Tarrytown
503,000
552,000
-9%
600,000
604,000
658,000
562,000
558,000
1%
Tuckahoe
743,000
650,000
14%
638,000
673,000
605,000
705,000
629,000
12%
Valhalla
500,000
440,000
14%
438,000
453,000
552,000
520,000
413,000
26%
White Plains
603,000
637,000
-5%
585,000
610,000
600,000
564,000
575,000
-2%
Yonkers
420,000
407,000
3%
412,000
456,000
441,000
410,000
407,000
1%
*Mamaroneck School District includes Larchmont P.O.
WESTCHESTER MARKET WATCH
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The pricing of a home will always be an art rather than a science. A property’s market value is a reflection of a number of tangible and intangible factors. The hard factors of a home include location, size, age and amenities. The soft factors include land topography, curb appeal, degree of updating, décor and the current competitive environment, among others. Turnkey properties, which include nicely decorated homes with up-to-date systems and structures, are the most highly desirable properties and command the highest prices in their range. Homes that are not in as pristine condition can languish on the market since the majority of buyers are seeking instant gratification when they make a purchase and don’t have the time for or the interest in major home improvement projects. Buyers remain exceptionally discriminating, and this is a trend that we expect will continue. In Westchester County overall, the median selling price for a single family home for the third quarter of 2013 was $652,000, a 4% increase versus the third quarter of 2012. In Southern Westchester County the median selling price was $685,000, with the sales price improvement closely mirroring the overall Westchester County performance. In Northern Westchester County, which experienced a more severe downturn than Southern Westchester County, we are currently experiencing above-market improvement in the median selling price. In the third quarter of 2013 the Northern Westchester County median selling price rose by 8% to $569,000. SINGLE FAMILY HOME MEDIAN SALES PRICE CHANGE
NORTHERN WESTCHESTER twelve-month median sales price
quarterly median sales price
3q13
3q12
3q13 vs 3q12
3q11
3q10
3q09
3q13
3q12
3q13 vs 3q12
Bedford
$710,000
$623,000
14%
$773,000
$816,000
$843,000
$780,000
$683,000
14%
Byram Hills
1,040,000
865,000
20%
1,143,000
902,000
1,141,000
930,000
858,000
8%
Chappaqua
900,000
946,000
-5%
861,000
975,000
855,000
875,000
879,000
-2%
Croton-Harmon
478,000
620,000
-23%
493,000
425,000
486,000
462,000
473,000
-2%
Hendrick Hudson
427,000
393,000
9%
360,000
493,000
400,000
398,000
350,000
14%
Katonah-Lewisboro
620,000
620,000
0%
600,000
790,000
616,000
624,000
624,000
0%
Lakeland
312,000
339,000
-8%
329,000
368,000
389,000
323,000
318,000
2%
North Salem
478,000
525,000
-9%
402,000
660,000
568,000
467,000
425,000
10%
Peekskill
253,000
294,000
-14%
237,000
188,000
327,000
240,000
229,000
5%
Somers
628,000
460,000
37%
607,000
588,000
620,000
475,000
503,000
-6%
Yorktown
415,000
400,000
4%
427,000
445,000
460,000
410,000
388,000
6%
DISTINCTIVE HEATHCOTE RESIDENCE
WESTCHESTER MARKET WATCH
SCARSDALE, NY - MLS: 3318401
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CONDOMINIUMS AND CO-OPS SHARE IN MARKET GAINS The condominium and co-operative market continues to stage a comeback with its sixth straight quarter of meaningful pending and closed sales gains. Multiple factors are influencing the growth in this market. First, confidence in the single family home market has spilled over to condominiums and co-operatives. Second, the financing is easier to acquire than it was during the housing crisis now that inventory levels are down and the ratio of units on the market to total units in the complex is back in line with bank requirements. Third, the depleted inventory of entry level homes is forcing some families to transition to the large condominiums and co-ops. And finally, the unlocking of the single family home market is allowing down-sizers to make a move to a simpler lifestyle. Overall in Westchester County closed sales for the third quarter were 35% higher than the same period a year ago, while under contract sales improved by 32%. Year to date, there are 22% more closed unit sales than the same period last year, while dollar volume is running 31% higher. The acceleration in dollar volume sales figures is indicative of more expensive properties being sold during the period. Inventory levels continue to drift downward as demand increases and new construction remains minimal. A shortage in the supply of quality condominiums and co-operatives is projected in the next few years as buyers eat up the available stock and market conditions improve. Prices remain steady for both condominiums and co-operatives, giving buyers further confidence that we are at the bottom of this market cycle. The median selling price for a condominium in Westchester County is $355,000, which represents a negligible 1% increase versus a year ago, while the median selling price for a co-operative is $154,000. As our single family home market continues to improve, we fully expect the condominium and co-operative markets to share in the gains. CONDOMINIUM AND CO-OPERATIVE CLOSED SALES AND MEDIAN SALES PRICE CHANGE closed sales
3q13
3q12
3q11
median sales price
3q10
3q13 vs 3q12
3q13
3q12
3q11
inventory level
days on market
3q13 vs 3q12
3q12 vs 3q11
3q13
Southern: Condo
241
164
144
150
47%
$400,000
$390,000
$360,000
3%
-13%
126
Southern: Co-op
447
330
290
249
36%
$160,000
$157,000
$170,000
2%
-5%
164
Northern: Condo
130
113
89
83
15%
$310,000
$300,000
$305,000
3%
-30%
114
Northern: Co-op
22
13
13
10
69%
$81,000
$98,000
$87,000
-17%
10%
195
BURST OF NEW LISTINGS ENTER THE MARKET The continuing reduction in inventory is a key component to our housing markets’ return to health. Despite the influx of new listings, strong demand has continued to reduce the number of units available for sale. In Southern Westchester County inventory levels are down by 5% this quarter versus the third quarter of 2012 and 11% in comparison to the second quarter of this year. New listings in the third quarter were 14% higher than the same period a year ago, a reflection of improving seller confidence in market conditions. In Northern Westchester County, there has been a surge in new listings on the market during the past two quarters in response to improving market conditions. During the second and third quarters of 2013, new listing activity was 25% higher than the same period last year. However, the heightened sales activity has absorbed a significant portion of these homes, leaving inventory levels stable versus the third quarter of 2012. The “sweet spot” in the market continues to be the entry to mid-level markets, where demand for quality inventory is outpacing supply. The operative words here are “quality inventory.” Buyers are willing to wait for good homes that are priced right, and will not settle for less in this environment. The return of the luxury buyer to many of our towns has provided added confidence in the overall market and represents a reflection of the exceptional opportunities that exist today. The pick-up in demand coupled with the lower supply is resulting in the Month’s Supply of Inventory (MSI) falling considerably. In Southern Westchester County the average MSI, which was 7.4 months in the third quarter of 2012, has fallen further and landed at 4.8 months in the third quarter of 2013. In Northern Westchester County the average MSI fell from 12 months in the third quarter of 2012 to 7.5 months in the third quarter of 2013. As reference, the MSI was as high as 20 months when our markets were struggling in recent years.
WESTCHESTER MARKET WATCH
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A WORK OF ART
ARMONK, NY - MLS: 3305123
WHERE WE ARE HEADED We fully expect the housing momentum to continue through the fall of 2013 as the macro factors of an improving economic and employment outlook intersect with the micro factors of reasonable home selling prices and historically low interest rates. The year-to-date double-digit sales improvement and robust pipeline of under contract units have put us on track for the best year in residential housing we have seen in the past five years. We feel confident that many towns in 2013 will record more single family home sales than they did in 2008, 2009, 2010, 2011 and 2012. The summer spike in mortgage interest rates added a measure of unexpected forward motion to the market. It provided the psychological prompting that motivated some buyers to be more aggressive in finding a new home in order to lock in rates before they increased further. Although conforming loan interest rates recently reached 4.5% for the first time in a year, after the most recent Federal Reserve meeting they eased back to 4.25%. While this may seem high compared to the 3.5% rate we became used to, mortgage interest rates in the 4% range are exceptionally low by historic averages and should be locked in if possible for the long-term. Loans that offer an option to take advantage of declining interest rates after the lock-in period are in high demand. It cannot be stated strongly enough that buyers today are highly discerning, seeking turnkey properties. We anticipate that sellers will need to carefully prepare their homes for the market for the foreseeable future. Buyers today are buying based on “current condition” versus “potential.” Today’s housing environment offers exceptional opportunities for buyers and sellers alike. Level housing prices, the depleted inventory of fresh housing and a larger buyer pool should provide sellers with the impetus to prepare their houses for sale and feel confident in putting them on the market. On the other side of the equation, this is a buyer-friendly environment where consumers are able to take advantage of the attractive combination of compelling home prices and low interest rates. Information Sources: Case-Schiller reports, Various MLS services, National Association of Realtors, Connecticut Economic Digest, local mortgage brokers, Realty Trac., HGMLS. While information is believed true, no guaranty is made for accuracy. Cover art: *Provence, France, used with permission. WESTCHESTER MARKET WATCH
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