But that is not the case anymore. Today, buyers on a limited budget like Chip and Katie Rich — who had been determined to find a house in a suburb with a sought-after school system for their three children — are in luck.
In their 650-square-foot one-bedroom condominium in the Prospect Heights section of Brooklyn, Mr. Rich, a creative director for a Manhattan advertising agency, and his wife, a stay-at-home mom, made do when their children were little. But after a while, he said, “we were bursting at the seams.” They have two daughters, 8 and 6, and a son, 3.
Scarsdale was a natural destination, Mr. Rich explained, because the couple already had friends there and were familiar with the community. Still, it took them two years to zero in on the house that would work.
They found a small English Tudor on a corner lot that had been languishing at $579,000. It was outdated inside and in poor condition throughout, its siding in disrepair and its roof and gutters clogged with pine needles from nearby overgrown trees. Mr. Rich used Photoshop to envision it with shutters, a fresh coat of paint, an updated kitchen and other improvements. The couple liked what they saw on the computer screen, made an offer and bought it for $500,000.
In a stronger market, dilapidated condition notwithstanding, a three-bedroom house like this one, with one full and three half baths, would have brought close to $700,000, said Paulette Talley, an agent with Houlihan Lawrence. Even in a down market, the median sale price of a single-family house last year in Scarsdale was $1.225 million.
The couple had done their homework by vigilantly monitoring falling prices, researching comparable listings on the Web and, most of all, waiting for the right house to come on the market at the right price. In recent months, similar scenarios have been playing out throughout Westchester in expensive towns and villages like Bedford, Armonk, Larchmont, Irvington and Pelham.
In Bedford, Roselyn Harburger, the manager of Houlihan Lawrence’s Katonah office, said the market for $500,000-to-$600,000 houses had become especially active of late. One in good condition with five bedrooms and two and a half baths on a half-acre lot was recently snapped up for $540,000. Before the market crashed, it would have sold for far more, Ms. Harburger said, noting that the median sales price of $775,000 for a single-family house in Bedford in 2011 represented a 27 percent decrease since 2007.
Most of her buyers in the $500,000-to-$600,000 price bracket, she said, are young couples seeking a community like Bedford with a country ambience and a high-performing school district. Others are empty nesters who in a more robust market might have left the area but who are now able to find smaller homes at reasonable prices.
Similarly, in Larchmont, Jim Whittemore, the manager of Julia B. Fee Sotheby’s International Realty, said that until recently his agency had listed only “a sprinkling” of houses under $600,000. “If there were three before, there are now eight,” he said. “As the years have gone by since 2007, prices have steadily gone down. Now they’re stabilizing, interest rates are low and not surprisingly, buyers are jumping in with both feet.”
A Dutch colonial built in 1923 with three bedrooms and one bath listed at $499,000 is one example of current midrange properties in Larchmont. The median sales price in Mamaroneck, of which Larchmont is a part, was $996,999 last year.
Nor are young couples or empty nesters the only ones making such deals. Single buyers like Ron Mizrachi, who lives in Irvington and shares custody of his children — a son, 9, and a daughter, 8 — are seizing the moment. “The divorce took a financial toll,” said Mr. Mizrachi, a lawyer who works in Manhattan, “and I had to rent an apartment for a while in order to be in the same town as my children.”
“But I kept a close eye on the market, monitoring it for changes,” he said, “and as I saw prices coming down and mortgage rates so low, I decided the time had definitely come to buy.” Mr. Mizrachi is about to close on a town house with three bedrooms and two and a half baths in the center of Irvington near the Metro-North station and the children’s school. The price is $580,000, far lower than the median last year of $810,000.
All together in Westchester, 336 homes priced under $500,000 were in contract as of Dec. 31, up 39 percent from a year earlier. That represents the highest year-end total for signed contracts in that price range since 2002, according to statistics from Houlihan Lawrence. “The market is getting healthy from bottom up,” said Chris Meyers, the chief operating officer of the brokerage, “and we consider that to be a good sign.”
Or as Lester Kravitz, an owner of Kravitz Realtors in Pelham, put it, “Increasingly we are seeing hidden buys in premier places, not just in what I call ‘locationally challenged’ communities.” He cited a Tudor with four bedrooms and two and a half baths on the market in Pelham for $599,000 that he would have listed for close to $720,000 before the market imploded. The median sales price of a single-family house last year in Pelham was $803,750.
“It’s definitely a trend,” Mr. Kravitz said. “For smart buyers on limited budgets, there are definitely super values out there.”