The bottom line of Houlihan Lawrence’s luxury housing report on sales in Westchester and Fairfield is that it’s all about the effects pricing has been having on the bottom lines of buyers and sellers.
Anthony Cutugno, senior vice president and the director of private brokerage for Rye Brook-based Houlihan Lawrence said, “Luxury sales increased because prices have fallen and buyers are transacting on compelling value propositions.”
In some cases, prices are down dramatically when compared with what they were when the houses were first listed. “In Westchester, the $3 million to $4 million price range accounted for most of the gains in third quarter sales,” Cutugno said. “Nearly all closed properties in this price range were reduced from their original price – some had up to five reductions – and sold nearly 30% to 50% less than the original list price.” He said that something similar was happening to properties priced at $5 million and up. They were being listed at prices which were unrealistically high and then wound up selling substantially below the original listing price.
The report said that the strongest performer in the luxury market segment in the third quarter was Darien. It was the only geographic segment covered in the report to show a gain in luxury sales for the year-to-date time period. For luxury home sales $2 million and higher, 48 houses sold in Darien by the end of the 2019 third quarter compared with 47 sold at the end of the same period a year ago.
Sales for the third quarter numbered 22 compared with 16 in the third quarter last year. The median sale price for the quarter was down 3.7% compared with the third quarter of 2018. Darien’s numbers received a positive boost from closings on two waterfront properties priced at more than $10 million each during the third quarter of this year.
In Westchester, the $2 million and higher price category had 119 homes change hands in the third quarter of this year compared with 113 in the third quarter of 2018. The median sale price was $2.7 million, up from $2.65 million in 2018. The number of luxury houses sold for the year stood at 235, a drop from the 269 luxury home sales through the third quarter of 2018.
In Putnam and Dutchess, where the luxury market begins at $1 million, there were 8 luxury homes sold in the third quarter of 2019 compared with 6 in the third quarter of 2018.
There was an increase in home sales in Greenwich for the third quarter of 2019 with 43 sold as compared with 40 sold in the third quarter of 2018. The median sale price went up from $4,125,000 to $4,250,000. Year-to-date, however, there was a drop in the number of houses sold from 121 through the third quarter of 2018 to 102 through the third quarter of 2019.
A dramatic drop was seen in the number of houses sold in the $2 million and higher luxury category in New Canaan. In third quarter of this year, 12 houses were sold as compared with 22 in the third quarter of 2018. However, the median sale price increased by from $2,425,000 to $2,662,500.
Cutugno said that there is evidence sellers are now listening to the market and pricing realistically.
“Inventory levels remain high. When sales slowed down the past several quarters, new listings came to market at a steady pace and inventory accumulated. The imbalance of supply and demand continues to put pressure on pricing,” he said.
Gay Prizio, director of luxury marketing for the Houlihan Lawrence private brokerage, told the Business Journal that buyers are identifying value in softer luxury housing prices. She said SALT, the limit imposed on deducting state and local taxes when filing federal income tax returns, is being absorbed into the market as a fact of life.
“SALT does decrease peoples’ buying powers and that kind of financial fact is not going away, but I think the impact of it has been absorbed by some buyers.”
Prizio said that the softening of high-end real estate prices in New York City has had an effect.
“New York City is a very important feeder market for both Westchester and lower Fairfield County so, if there are sellers in Manhattan who are unable to sell their condos or co-ops or townhomes, they in turn cannot become buyers north of New York City,” she said. “So, what that’s doing is shrinking the buyer pool.”
Prizio said sellers need to price their homes properly.
“That’s probably the single-most important message for sellers because we’re in a very, very price-driven market, and for buyers we say there are great, great opportunities out there right now.”