At a recent Westchester real estate office meeting in Yorktown, the managing broker summed up 2010 as basically, “Goodbye and good riddance! The same way I felt about 2009!”
The fourth quarter report of this region’s Empire Access Multiple Listing Service (EAMLS), just released last week, would tend to support that sentiment, as would the report localized here specifically to Yorktown, with some good news thrown in.
EALMS reports a total of 6,586 closings of Westchester residential real estate transactions in 2010, a level of activity that was an encouraging 13 percent higher in sales than 2009. This year’s activities reflect the flurry of activity stimulated by the federal tax credit for first-time homebuyers. The increase was less than one percent than the results of 2008.
Westchester’s 4,014 house sales represented a nearly 20 percent increase over 2009’s sales and 5 percent over 2008. Condominium sales in Westchester picked up their pace, too, with a 14-percent increase over 2009.
The cooperative apartment sector performed weakly. The 1,266 sales were virtually unchanged (two units) from 2009, and were 18 percent below 2008 levels. Sales of multi-family properties remained at very low levels as well.
When in the second quarter of 2010 sales increased by double digit percentages compared to 2009, rejuvenated by the tax credit, there was a burst of sales in condominiums and cooperative which are most affordable to first-time home buyers. But the single-family house market also benefited.
It had been hoped that, with the resurgence so strong, there would be continued growth even after the tax credit program expired on Sept. 30, but third quarter sales came in at 5 percent below 2009 levels and fourth quarter sales were down by 25 percent from the prior year.
Concerning pricing, it is all but impossible to determine the region’s real estate price trends in 2010 because a greater surge in higher priced homes in some Westchester markets has skewed the median price.
The highest median sale price ever posted for Westchester single family houses was $730,000 in the third quarter of 2007. From there, it spiraled down to a low of $532,000 in the first quarter of 2009. But after that, sales on the high end increased the median price to a record of $730,230 in the third quarter of 2010. While accelerating the median price, these sales have masked the lower performance of more moderately priced homes.
But with the stimulus in lower priced homes with the federal tax credit lowered the Westchester median price to $630,000 in the fourth quarter of 2010, which stands 9 percent higher than the same period in 2009.
According to the Multiple Listing Service foreclosure activity in the Westchester market appears not to have caused serious damage in terms of excess inventory or a depressed price structure. However, other observers would say that they do tend to depress price structure in the neighborhood of short sales.
Foreclosure filings recorded by the Westchester County Clerk’s office declined by 50 percent in the fourth quarter of 2010 compared to 2009. More filings are not being resolved through short sales. Realtors who specialize in short sales report that, while those transactions yield lower sales prices than those obtained from short sale transactions, the fact does not necessarily result in a loss of value among the unimpaired properties. Again, that is disputed by neighbors of properties that are in short sale or foreclosure.
The end-of-quarter inventory of Westchester properties listed for sale was 5,703 units, 6 percent more than at the end of 2009. While inventory has increased steadily but slowly since 2007, it is not considered excessive and is actually at about the same level as it was in 2005 – 2006 before the recession was ushered in.
An analysis of the Yorktown market produced the following year-to-year statistics for homes sold in 2010 compared with 2009. Incredibly enough, the number of homes sold was just one off in 2010, compared with 2009.
Yorktown
The prognosis for 2011 seems good, but only after the first six months of the year, compared with last year when the federal tax credit gave the short but significant boost to sales.
The MLS points out the favorable factors for the beginning of a turnaround as:
Mortgage rates are as low as they’ll probably ever be at 5 percent or below for a 30-year fixed rate loan; foreclosure activity is at a manageable level in our area; current inventory offers ample choice to prospective buyers; price moderation in Westchester overall in the range of 8 to 15 percent from the top of the market (but more like a 20 percent in Yorktown in the past two years).
Local unemployment is easing slowly but steadily, by about one-half a percentage point from the start to finish of 2010; and, a gain of about 10 percent in the Dow Jones Industrial Average over the course of 2010, with continuing increased so far into 2011.
Moderating the good news is continued uncertainty about job security, tax policy, safety of personal investments, and the national economy in general. Prospective first time buyers are still reluctant to step forward with a starter home, but it is their confidence in the future that will power ascending sales volumes, like those posted in the first half of 2010 with the tax credit program, but this time, without the program.
All that said, many industry pundits are predicting that once the mid-way mark of 2011 is passed, we will see the start of a turnaround in housing.
Bill Primavera is a realtor with Coldwell Banker in Yorktown and can be reached directly for comment or questions at 914-522-2076.