Realtors with the Westchester-Putnam Multiple Listing Service Inc. describe sales volume and prices in the region”™s housing market midway through the year as “more of a dip than a dive” from the record-setting markets of 2004 and 2005.
Realtors reported 4,269 house sales in Westchester County through the first half of the year. That is a 1 percent increase from the first half of 2006, an indication that the housing market has leveled out, according to brokers.
“It”™s certainly been a slight change,” said Mark Boyland, associate broker at Keller Williams NY Realty and president of the Westchester-Putnam Multiple Listing Service. “We”™re certainly doing a lot better than other parts of the country.”
Overall, Westchester house sales from January through June were down 8.6 percent from the same period in 2005, when 4,671 sales were reported, and 7.9 percent from the first half of 2004.
Year-to year increases of 5.4 percent in midyear sales of single-family houses (2,407) and condominiums (682) in Westchester were offset by a 3.5 percent drop in co-op sales (931) and a 24.8 percent drop in sales of two- to five-family houses (249).
Only midyear condominium sales were up from midyear sales in the boom years of 2004, at 2.9 percent, and 2005, at 11.3 percent. Midyear single-family house sales were down 8 percent from 2004 and 9.9 percent from 2005.
Realtors said the multifamily housing sector might be one casualty of the national slump in the residential real estate market that is due in part to investor-spurred overbuilding. At midyear, multifamily house sales had dropped 25.4 percent from midyear 2004 and 33.6 percent from midyear 2005.
Realtors in that sector reported that investors are finding that stocks and other investments offer a higher gain and are turning away from that real estate market.
In Westchester, the second-quarter median sale price of a single-family house was $700,000, a 2.1 percent decrease from the $715,000 median in the second quarter of 2006. The median price equaled that of the second quarter in 2005 and was up $40,000 from the second quarter of 2004.
The second-quarter median sale price for a multifamily houses, $547,500, showed the largest year-to-year decrease at 5.6 percent.
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The second-quarter mean, or average, sale price of a single-family house in Westchester was $965,414, a year-to-year increase of 2.9 percent. That is higher than prices in what Realtors called the “feverish markets” of two and three years ago, when the mean sale price for a single-family house in Westchester was $853,542 in the second quarter of 2004 and $915,345 in the second quarter of 2005.
Realtors reported that 28 percent of single-family house sales exceeded $1 million. While the middle market reset itself at price levels slightly below the record prices of 2005 and 2006, the high-end market continued to maintain market share and included some very highly priced transactions, according to Realtors.
Total residential inventory at the end of the second quarter was down 8 percent from a year ago, with 7,140 listings. That ended a 12-quarter run of year-to-year increases in inventory that ranged from 2 percent in 2004 to 38 percent in the first quarter of 2006, as homeowners sought to cash in on the robust housing market. The midyear single-family house inventory (4,173) showed a year-to-year drop of 10.8 percent.
Realtors said high sales volume does not account for the drop in inventory. Rather, sellers are choosing to wait for what they expect will be better market conditions before listing their homes.
“A lot of sellers have been discouraged” by the market slowdown “who decided not to re-list and took their properties off the market” in the second quarter, Boyland said.
Realtors sounded a mildly optimistic note in their second-quarter sales summary. “Sales volumes have reset to levels that are fairly strong when viewed in the long term,” they reported. “There has been a slight downward price correction in the range of 2 to 3 percent in the main property categories but there are no signals of larger price reductions to come. Inventory is far from excessive.”
They cautioned that the “wild card” in this suburban housing market continues to be mortgage financing, with respect to both interest rate levels and the subprime market collapse. The latter issue is more worrisome, Realtors said, as it could make borrowing more difficult for moderate-income and first-time home buyers as banks tighten their lending criteria as a hedge against defaults and foreclosures.
In the Westchester market, “We”™ve seen some impact in that area, but not too much,” Boyland said. “We haven”™t found too many deals falling apart over that, but it has slowed down the process” for loan approval and house purchases.
“I think with the mortgage resets coming up over this year and next year, we”™re going to still see prices decline and we may see inventory tick up” as a result of defaults and foreclosures and financially pressed homeowners selling short. “I don”™t think we”™re out of the woods yet,” Boyland said. “I think it”™s going to be another year of pain before we see what the future brings.”
At Logue Capital L.L.C. in Yonkers, owner and President Mark Logue said he is already seeing the impact of the subprime meltdown on clients as conventional lending banks tighten their income verification requirements.
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“It”™s now tougher to get a mortgage,” he said. “The parameters are much more restrictive now with respect to getting financing.”
“I hate to be the voice of doom and gloom, but it”™s going to get worse before it gets better,” Logue said. “You”™ll be looking at foreclosure rates going up significantly in the next six to 12 months” as adjustable interest rates on subprime mortgages skyrocket.
The ripple effect of the subprime debacle will reach only the lower end of the housing market, Logue said. “The high end is not going to be affected by this,” he said.
For persons with liquidity, “I think the next six to 18 months will be a great time to buy” as sale prices drop in the wake of foreclosures, Logue said.
“What”™s that saying? ”˜One man”™s trash is another man”™s treasure.”™”
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