Housing inventory in Westchester County has reached its lowest level in 13 years, according to a recent report from Douglas Elliman, and while that record-low supply has led to frequent bidding wars in the low- to midlevel markets, the same cannot be said for luxury homes.
“For the past several years, the Westchester housing market has remained ‘soft at the top,’ with faster-moving conditions in the mid and entry segments of the market,” said Jonathan J. Miller, CEO of Miller Samuel Inc. and author of the Elliman report.
Though third-quarter inventory in the luxury market fell 2.1 percent year over year, real estate professionals agree that a wealth of high-end properties remain for sale.
“When you start going $1.5 (million) and north, there’s a heck of a lot of stuff on the market and practically nothing selling,” said Mark Seiden, broker and owner of Mark Seiden Real Estate Team in Briarcliff Manor.
Sales of luxury homes fell 7.1 percent year over year, according to the report from Douglas Elliman, while the median sales price slipped 1.7 percent to roughly $2.1 million, the first price decrease for luxury homes in four consecutive quarters.
“Luxury inventory is declining as sellers are becoming more willing to let an over-priced listing expire, reducing confusion for new luxury sellers entering the market,” Miller said. “This is an encouraging trend as sellers are in the very early stages of getting more in sync with the market.”
However, price isn’t the only reason many luxury properties aren’t changing hands.
“There are plenty of people in the market who I think are overpriced, but we also have plenty of stuff that I think is priced fairly reasonably,” Seiden said. “It’s just that the stuff that’s selling is selling for an ‘oh my God’ low price.”
Higher inventory in that market segment can also be attributed to the deep pockets of many luxury homeowners.
“Often in the luxury markets, sellers are prepared to keep the properties on the market for a long time,” said Stacey Oestreich, an agent with Douglas Elliman’s Strong Oestreich Team in Armonk. “It doesn’t affect their day-to-day lives. If they know they can garner an extra $100,000, $200,000 or even several million, they will hold it.”
Instead of purchasing expensive houses, wealthy young professionals, traditionally the buyers of those properties, are opting for smaller, less expensive homes to raise their families.
“Really, for the first time in history, we’re seeing the needs of people downsizing and the needs of people starting out, they want the same house, so that’s driving a lot of the demand for the middle- to low-end inventory,” said Holly Mellstrom, a broker at Julia B. Fee Sotheby’s International Realty in Bronxville. “People are trying to get by with less, not more.”
Agents agree that this shift is due more to a change in the mindset of young prospective buyers than a lack of funds.
“The psychology of millennial buyers looking at big houses, they want a footprint that works for them,” Oestreich said. “They don’t have to go for that wow factor, whereas 15 years ago, you got as much as your money could buy.”
Nancy Strong, a salesperson with Strong Oestreich, agreed that “in the 1990s, high-end buyers were looking for a lot of land to show off their wealth and to really buy an estate.” Today, buyers are not as focused on square footage but more on experiences and location.
“Now, they’re looking for proximity to the city and being in towns that have a lot going on, with luxury neighborhoods, with luxury stores, with all that nearby,” Strong said.
Buyers are also continuing to pass on older estate homes or houses that require a lot of fixing up, looking instead for newer builds and recently refurbished properties.
“Nine out of 10 buyers want a beautiful, brand new, updated home to do very little work on,” Oestreich said. “That’s very often what holds a high-end property or any property from moving.”
Many buyers coming into the Westchester markets are relocating from New York City, where they’ve become accustomed to “living in Manhattan in a building with a doorman, or a luxury building where things are done for you and you don’t have to worry about fixing the heat or changing a lightbulb,” said April Monaco, a real estate agent with Houlihan Lawrence’s Pelham office.
A preference for newly built homes is a trend that housing developers in Westchester County hope to capitalize on.
At Greystone-on-Hudson, the luxury homes development overlooking the Hudson River and Palisades at 612 S. Broadway in Tarrytown, developer Andrew Todd said interest is strong.
The development’s recently completed 18,000-square-foot home at 6 Carriage Trail is listed at $12.9 million. The nine-bedroom, 11-bathroom home, which boasts a wine cellar, workout room and rock climbing wall, has already secured a pair of offers, Todd said, though both were declined.
“We’re definitely seeing people who are interested,” Todd said. “We’re a little different, because we’re a brand-new construction, and while there might be a lot of older houses on the market built a long time ago, very few are brand-new. We’re like a step above everyone else.”
Though many agree the future looks bright for the low- to mid-end housing market, the picture is less clear for luxury homes.
While Westchester’s luxury sector traditionally set the tone for the overall housing market, the opposite now seems to be proving true.
“The question now is, how will the lower market and bidding wars start to push up the balanced market, which would then push up the luxury market?” Seiden said.