Market woes hit home in Westchester
It was relatively slow in coming here, but the residential real estate market contraction has reached Westchester County. First-quarter house closings were down by nearly one-third from a year ago, the largest decrease in nearly three decades of recordkeeping by the Westchester-Putnam Multiple Listing Service Inc.
Realty firms reported 1,340 closed residential transactions in Westchester in the first three months of 2008, a 30.5 percent decrease from the first quarter last year. Sales of multifamily housing plunged by 56 percent, to 62 deals. Single-family house sales, totaling 726, were down 30.5 percent and condominium sales, totaling 209, dropped 34.5 percent. Sales of cooperatives totaled 343, an 18.9 percent drop from the same period last year.
Putnam County, whose real estate market has lagged behind Westchester”™s for two years, showed only a 9 percent year-to-year decline in housing sales with 154 sales in the first quarter. Realtors said that comparatively modest decrease might be “a statistical fluke.”
When adjusted for seasonal variation, Westchester”™s first-quarter closings would amount to an annual sales rate of 6,480 units, the lowest adjusted rate measured by the bi-county listing service since the 1993-1996 period. That rate was 14 percent below the sales pace in the fourth quarter of 2007.
Despite the buying slowdown, median sale prices for housing did not drop as precipitously in the first quarter. The median price of a single-family house in Westchester, $622,500, was down 2 percent from a year earlier, while the median price for a condominium, $380,000, was down 3.1 percent. Median prices for co-ops, at $176,000, and multifamily houses, at $515,000, dropped 4.9 percent and 3.7 percent respectively in Westchester.
Despite higher mortgage interest rates on jumbo loans in this high-cost market, overall mortgage rates were fairly low, from 6.1 percent to 6.6 percent, on 30-year fixed- rate loans last winter, officials at the Westchester-Putnam Multiple Listing Service noted. Those rates are not expected to rise in coming months.
Realtors here warned of “serious threats ahead” to the Westchester and Putnam markets. One such threat comes from foreclosures, which analysts said could become a “highly visible element” in the market this year, especially if concentrated in geographic areas, a for-sale-sign clustering that already has begun in Westchester”™s southern-tier cities.
Depressed property values from foreclosed and neglected properties in those areas could spread to larger areas, they warned.
Realtors said a possible retrenchment in Manhattan”™s residential real estate market also would threaten Westchester, where Manhattan-based buyers have accounted for as much as 15 percent of housing transactions over the years. If relocation-minded owners can”™t sell their city co-ops and condos, “Westchester and Putnam will quickly feel their absence,” the analysts said.
The market forecast for the rest of 2008? Given the economic threats and uncertainty about government intervention to prevent foreclosures, that would be “wildly speculative,” officials at the listing service said. Instead they offered hope based on the Westchester market”™s long-term record: “Having arrived late to the current recession, we might be lucky enough to depart early as well.”