Richard Haggerty: Setting our sights on 2021 – An outlook on Westchester’s residential market
The seesaw year, aka 2020, ended on an astonishingly high note for real estate practitioners in the lower Hudson Valley. I have been in the real estate business for 35 years and what we saw last year was staggering. After experiencing strong first-quarter sales, agents looked forward to and anticipated more of the same for the second quarter. What occurred instead was a decimated market as a result of Covid-19 and the virtual shutdown of real estate activity.
Creativity and technology, as well as a desire by city dwellers to escape their close environs, resulted in historically high single-family residential sales in the third quarter which, as it turns out, was only a preview of what was to occur in the fourth quarter.
Westchester, which comprises the largest market in the region, had a year-over-year increase in single-family residential sales of 14% or 6,657 units as compared to 5,839 for 2019; one-third of those sales occurring in the fourth quarter of 2020. There were 2,232 single-family sales in the fourth quarter as compared with 1,415 sales in Q4 of 2019, a 57% increase. Year over year, the median price of a single-family home in Westchester increased to $735,000, compared with $655,000 for 2019.
Every county in the region, with the exception of the Bronx, which falls in the city category, experienced year-over-year increases in residential home sales. All regions, the Bronx included, also saw increases in median sales prices. While year-over-year increases were significant, fourth-quarter increases were nothing short of dramatic.
In general, the days a property stayed on the market (DOM) were down in all market areas and properties sold very close to, and in many instances, above list price. All are indicative of a strong market. The real estate market has been an anomaly in a difficult economy and future predictions for the market are difficult at best.
Inventory is at an all-time low, which may negatively impact sales and put upward pressure on prices which, in turn, affect affordability. This is somewhat offset by the low interest rate environment. A higher-than-usual unemployment rate for the area remains a concern, but commercial activity in the lower Hudson Valley remains strong and should bode well for the residential sector.
A high level of pending sales is an indication that in the near-term, sales will remain strong.
Joseph Rand, chief creative officer of Howard Hanna | Rand Realty and Hudson Gateway Association of Realtors (HGAR) member, is optimistic about what we”™ll see this year. The firm”™s pipeline of homes that went into contract over the past few months indicates that we are going to see strong housing numbers in the first quarter of 2021.
“We now have a new contract pipeline going into the year that dwarfs what we had going from 2019 to 2020 ”” a 52 percent increase year over year, amounting to an extra 5,000 deals that have been in the pipeline,” he said. “While some of those deals have closed, a lot of them are going to bolster the numbers in the first quarter of 2021.”
Gail Fattizzi, immediate past HGAR president, is predicting another strong year in Westchester, but does not believe it will be quite as exuberant as 2020.
“We still have low interest rates keeping homes affordable. People still want to own their own home, maybe more than ever thanks to the pandemic,” she said. “And, we are seeing millennials who are now at the stage of family-building and therefore home-buying, so the timing is right assuming they have the financial wherewithal to purchase.”
As of right now, she continued, inventory appears to be the largest limiting factor in our market this year. “If inventory improves at least somewhat, and there isn”™t a panic to move/buy, we will probably see appreciation that is not quite as strong as last year but still positive, and sales numbers could actually increase.”
While the jury is still out on what the coming year will bring, it is clear that that the events (and activity) of the last two quarters of 2020 will have a lasting impact. We remain optimistic and looking forward to seeing what”™s in store for the Westchester market.
Richard Haggerty is CEO of the Hudson Gateway Association of Realtors and president and chief strategic growth officer of OneKey MLS, New York metro”™s first regional multiple listing service. For information, visit OneKeyMLSNY.com.