Low inventory and higher mortgage interest rates combined for a sales decline in the luxury”¯market north of New York City”¯in”¯the”¯first”¯half”¯of 2023, according to the Houlihan Lawrence Q2 luxury market report. ”¯
Luxury home sales declined in”¯Westchester County”¯(down 43.9% for”¯sales”¯$2 million”¯and”¯higher),”¯Putnam”¯and”¯Dutchess”¯counties”¯(down 53.2% for sales”¯$1 million”¯and”¯higher);”¯Greenwich”¯(down 12.7% for”¯sales”¯$3 million”¯and”¯higher);”¯and”¯New”¯Canaan”¯(down 5.3% for”¯sales”¯$2 million”¯and”¯higher). But sales of $2 million and higher were up 9.7% in Darien.
“A”¯significant”¯majority”¯of”¯homeowners”¯with”¯mortgages”¯are”¯currently”¯paying”¯below”¯the”¯averagerate”¯of”¯6.7%,”¯the”¯highest”¯observed”¯in”¯20”¯years,” said Anthony P. Cutugno, senior vice president, private brokerage. “This ”˜golden”¯handcuff”™”¯effect”¯is keeping”¯would-be”¯sellers”¯off”¯the”¯market.”¯Despite”¯limited”¯supply”¯and”¯higher”¯interest”¯rates,”¯the”¯data”¯indicates”¯a”¯ resilient”¯luxury”¯market”¯with”¯healthy”¯buyer”¯demand.
Cutugno”¯added that ”¯buyers”™”¯sense”¯of”¯urgency”¯has”¯noticeably”¯changed:”¯“During”¯the”¯height”¯of”¯Covid,”¯buyer urgency was at an all-time”¯high.”¯The”¯purchase”¯of”¯a”¯new”¯home”¯in”¯a”¯lower-density”¯area”¯or”¯on”¯a”¯larger”¯parcel”¯was”¯a”¯visceral”¯reaction”¯to”¯Covid”¯and”¯a”¯means”¯to”¯keep”¯one”™s family safe. ”¯
“As”¯the”¯pandemic”¯moved”¯into”¯the”¯past”¯tense,”¯buyer”¯motivation”¯shifted.”¯Discipline”¯replaced urgency,”¯even”¯as”¯inventory”¯remains”¯low.”¯In”¯fact,”¯low”¯supply”¯gives”¯buyers”¯a”¯reason”¯to wait”¯until”¯the”¯right”¯house”¯becomes”¯available,”¯be”¯it”¯in”¯a”¯month”¯or”¯in”¯a”¯year.”¯This”¯mindset,”¯while practical,”¯squelches”¯urgency”¯and”¯a”¯willingness”¯to”¯compromise. ”¯
“The”¯first”¯half”¯of”¯2023”¯brought”¯no”¯surprises.”¯The”¯pace”¯of”¯sales”¯is”¯now”¯reflective”¯of”¯a”¯market that”¯is”¯stable.”¯Interest”¯rates”¯are”¯expected”¯to”¯fall”¯in”¯2023.”¯This should”¯help”¯to”¯correct”¯supply”¯issues”¯that”¯have”¯upset”¯our”¯markets”¯thus”¯far”¯in”¯2023.”
For more, visit houlihanlawrence.com.
