Inside the luxury-home market decline
**************************
TRYING TO GET PHOTOSÂ
WESTCHESTER & FAIRFIELD LUXURY HOUSES
HEADSHOT: ANTHONY CUTUGNO
***************************
Houlihan Lawrence, which says it participated in 71% of all transactions in the luxury home market in Westchester and Fairfield during the first quarter of 2019, has issued a report analyzing what has been happening in luxury end of residential real estate. Much of what the report shows is bleak, with Anthony Cutugno, senior vice president and director of private brokerage at Houlihan Lawrence, reporting that there was a 40% decline in the number of New York City buyers moving to the suburbs compared in 2019”™s first quarter compared with the same period last year.
Cutugno said, “There is no isolated incident that accounts for losses, but rather a confluence of events that negatively impact our markets and effectively shrinks the number of luxury buyers north of NYC.”
He said buyers who want to leave New York City have been unable to do so because their apartments remain unsold. While the market for their properties was robust just 18 months ago, with condos and co-ops appreciating in value and properties selling quickly, listings are sitting on the market longer and selling for less than expected.
The changes to the federal tax code which eliminated full deductibility of state and local taxes (SALT) is another event which Cutugno cited as making home ownership more costly. “Consequently, many would-be move-up buyers ”“ another important segment for the luxury market ”“ are now more likely to stay in their current home than trade-up to a bigger and more expensive property.”
Cutugno said that SALT gave a push to some residents to relocate to states where real estate and other taxes are lower, such as Florida, Texas and North Carolina.
In Westchester, the number of homes sold for $2 million and up was 43.1% lower in the first quarter of 2019 as compared with the first quarter of 2018, with 29 homes sold this year versus 51 in the same period a year ago. The overall dollar volume was more than cut in half from $184,650,998 in the first quarter of 2018 to $87,832,600 in the comparable period this year, a drop of 52.4%. The median sale price declined 6.1% to $2,625,000 and selling prices averaged 7.9% below the listing prices. If there was a bright spot it was that the average number of days on the market was 124 in the first quarter of 2019 versus 162 days on the market during the first quarter last year.
Houlihan drew upon data from the Hudson Gateway Multiple Listing Service, Greenwich Multiple Listing Service, and Darien, New Canaan and Greater Fairfield Multiple Listing Services in preparing its report.
In Putnam and Dutchess counties, where Houlihan pegs the luxury market as beginning at $1 million, data showed an uptick from the first quarter of 2018. There were 10 luxury home sales in the 2019 period compared with nine sales in 2018. The dollar volume was up by 15.1%, from $19,199,752 to $22,091,000. The median sale price jumped 52.2% from $1,490,000 to $2,297,500. Sale prices were within 1% of the listing prices, but properties sat on the market 42.9% longer, 350 days in the first quarter of 2019 versus 245 days last year.
The number of luxury homes in Greenwich selling for $3 million and dropped by 35.7% from 28 in the first quarter of 2018 to 18 in the comparable period this year. Total dollar volume declined by 44.6% from $158,946,500 to $88,030,500. The median sale price was down 19.8% to $3,875,000. Listings were on the market for 8.8% less time; 301 days in the first quarter of 2019 compared with 330 days for the same period in 2018.
In Darien and New Canaan, the market became super-soft with drops of 25% and 30%, respectively, in the number of units sold for $2 million and more. There were six sales in Darien compared with eight in the year-ago period and seven in New Canaan in the first quarter of 2019 compared with 10 in the first quarter of 2018. The bright spot of there being no drop in the number of luxury home sales in Rowayton doesn”™t seem so bright when finding out there was only one sale in each of the 2018 and 2019 first quarters. The 14.3% drop in dollar volume, from $2,800,000 to $2,400,000 also casts a shadow. In both Rowayton and New Canaan, there were dramatic drops in the number of days listings were on the market. Average days on the market for Rowayton properties declined 34% from 256 to 169. In Darien, the first quarter 2018 number of days on the market was 289, going down 27.7% to 209 for the first quarter of 2019.
Cutugno did express some optimism for the spring selling season. “Continued confidence in the economy is evident in the rebounding stock market and stable interest environment,” he said. “Razor sharp pricing and impeccable presentation are the best tools a seller has to attract buyers actively in the market.”
The Houlihan Lawrence report showed that the most first quarter 2019 Westchester luxury home sales were in the Harrison school district, which had seven. The top price was $4,425,000 and the median luxury property sold for $2,500,000. There were five sales in Bedford, where the median price was $3,700,000 and the highest sale price was $7,200,000. Third was Rye City with four sales, a median sale price of $3,236,000 and a top price of $5,200.000.
Greenwich had 11 luxury properties in the $3 million-and-higher category change hands, with a top sale price of $11,180,000. The median sale price was $3,900,000. Seven luxury homes sold in New Canaan, with the highest price being $4,200,000 and the median property going for $2,735,000. There were six sales each in Darien and Westport. Darien”™s highest sale price was $3,150,000 with the median price the same as in New Canaan. The median price was lower in Westport at $2,550,000, with the top price for a luxury home coming in at $3,520,500.