It looked like winter wouldn’t come to an end in the Westchester housing market. A combination of few homes in the lower price range and the new federal tax law capping the ceiling of local tax deductions caused a stagnant winter market that threatened to loom into the next season.
But as spring arrived, the freeze over the market thawed out. Buyers returned to the market in full force to kick off the busiest season of the year. As we’ve shifted out of winter, we’ve noticed some trends worth keeping an eye on. Here’s a few pointers to help identify what makes a hot sale, and what causes buyers to turn a cold shoulder.
The Condition of the Market
Mortgage rates were nearly 5% last fall, but the drop to almost 4% this spring has turned the market more shopper friendly. Low inventory of entry level and mid-level homes was also a general concern for researchers.
However, there are more homes up for sale in overall this quarter compared to a year ago. Single-family home inventory increased by 5.9% in Westchester due to empty nesters who are downsizing, families moving to bigger homes, or people moving out of state.
Despite this uptick, inventory is still at a historical low. The market currently has about five months of supply, while a healthy market usually has six. For comparison, the supply during 2009’s recession was about 10 months worth of inventory. Options are limited, and the available Westchester homes below $800,000 can generate bidding wars. There are buyers around, but competition can be discouraging for them.
The Importance of Location
As always, buyers look for homes that are in a good school district. On top of that, there’s a trend of recent shoppers seeking out downtown areas within walking distance of their preferred homes and easy access to New York City.
In Westchester, communities along the Metro North Railroad are in higher demand, especially if they have shorter commutes to the city.
These desirable areas have differing price ranges, with the median in lower Westchester being $911,000 as of the first quarter this year. One general rule is that the more convenient a low-crime area is, the higher the cost.
Rise of the Millennials
Millennials make up a big portion of the current buyer market. They often seek out homes that aren’t just starter friendly, but move-in ready too. The current trend favors homes that have all the amenities ready to go instead of larger homes that may need more work.
Some realtors speculate the reason behind this paradigm shift is because millennials aren’t as “handy” as past generations when it comes to fixing up homes. Or that technology has made being handy obsolete – there’s a phone app for everything from fixing a faucet to remodeling your entire home.
However, the more likely reason is that price of living has risen over the years, making the idea of heavy investments taking place over long periods of time less appealing to millennials.
Westchester Real Estate: A Market Divided
Where do these shopper trends leave us now? The market for lower to mid-priced homes has become more bullish in the spring, while luxury and higher end homes are still struggling to be sold quickly.
Aside from the general demand for lower-priced homes, the Tax Cuts and Jobs Act that is limiting total state and local tax deductions to $10,000 is also hampering the higher end side of the market.
In this turbulent market, arming yourself with knowledge is the most important factor to ensure success as a current homeowner or a potential buyer.
Fortunately at Sterling Property Solutions, we’re here to give you the experience and actual market data you need to make the best choice. Contact us today for more information on how to conquer the springtime market and be made in the shade.
STERLING PROPERTY SOLUTIONS
77 Tarrytown Rd Suite 1E
White Plains, NY 10607