Limited inventory in the under $1 million range continues to mean fast sales and bidding wars as buyers expand into the upper reaches of the county
A two-bedroom apartment at Hudson House was listed for $699,000 and closed for $762,000 in cash.
If New York City has become too pricey, putting the idea of city living out of reach, first-time buyers these days can no longer count on going to Westchester to find that dream home.
An increasing inventory crunch continues to pressure the housing market, leading to the fewest number of properties for sale in decades. And that reduced supply is especially pronounced in the starter-home submarket, or those homes priced for about $1 million or less.
Though buyers from Brooklyn and Queens were expected to keep streaming north, certain fundamentals of the Westchester market — notably, a lack of willing sellers — means the product shortfall could linger for years, stymieing that flow. “It’s like a bottleneck, which is a struggle,” said Zef Camaj, an associate broker at Houlihan Lawrence, echoing other agents across the county.
Overall, inventory in the third quarter of 2017 stood at 4,203, which includes houses, condos and co-ops, according to market research from Douglas Elliman. That represents about a 5 percent tumble from the second quarter, when 4,431 properties were for sale.
And single-family houses are selling faster: Those priced at under $1 million spent an average of 75 days on the market through Dec. 6 of 2017, according to Camaj. In contrast, houses above $1 million spent an average of 97 days on the market, the agent said, citing data from the countywide Hudson Gateway Multiple Listing Service.
Plus, the market time for lower-priced houses seems to be contracting. In 2016, through Dec. 6, single-family houses for under $1 million spent an average of 83 days for sale, the data show. For houses over $1 million, it was 89 days, according to the data, suggesting a widening gap between the top and bottom of the market.
As buyers continue to look to Westchester for deals, the conditions might seem ripe for a seller’s market. Indeed, the uptick in demand seems to be translating into elevated prices — the median sales price in the third quarter was $535,000, according to Elliman, an increase of almost 3 percent over the previous year.
Yet, despite the seeming rise in motivation, for some — namely, those that bought in the heady days before the Great Recession — to sell would be to lose money. Those in the slower part of the county, north of Interstate 287, are particularly concerned. “Sellers are not willing to take a loss that they may have to incur if they bought at the height of the market,” said Victoria Miller, a saleswoman in Elliman’s Chappaqua office. “That height isn’t coming back anytime soon.”
Miller, who has sold real estate for 14 years, said that while values “down county” have fully recovered, prices in the more rural areas where she works are still off 20 percent from their 2007 peak. That’s still an improvement from around 2011, she added, when prices were depressed by 30 percent.
Another factor: Older homeowners, from the baby-boom generation, are breaking with tradition and keeping their houses off the market. People are living longer and retiring later, meaning there are fewer people trading in a four-bedroom in Scarsdale, say, for a two-bedroom on the beach in South Carolina.
“Now you just have a hip surgery or knee replacement, and you’re back playing golf in three months,” Camaj said. Children are living at their childhood homes longer than in the past, he added, giving parents another reason to stay in place.
Similarly, downsizing to move to an apartment in New York City — a trendy choice in the last boom — now has limited appeal. Condos and co-ops have grown comparatively expensive: The median price of a Manhattan apartment in the third quarter was a hefty $1.2 million, according to Elliman.
Supply is also crimped because in historic and well-heeled areas with strict zoning laws, new large-scale housing subdivisions are relatively rare.
One project in the pipeline is Toll Brothers’ Valeria Development, a planned 147-townhouse complex in Cortlandt Manor. But progress at the project has been slow; it opened in 2015 and is only about half constructed.
Westchester’s cities, including New Rochelle and Yonkers, have been adding new multifamily housing in recent years, but much of that product is rentals. And even then, large-scale new developments — even those outside the major cities — like AvalonBay Communities’ 152-unit Avalon Somers, now under construction in the town of Somers, are often already leased.