Two new reports looking at the state of real estate in the lower Hudson Valley describe a housing market that has weakened at the top while staying strong at the bottom.
“Residential sales for the second quarter in the lower Hudson Valley region served by the Hudson Gateway Multiple Listing Service Inc. were very much a mixed bag,” officials at the Hudson Gateway Association of Realtors reported in their 2nd Quarter 2019 Real Estate Sales Report.
For one thing, sales of single-family homes slowed in Orange, Rockland, Sullivan and Westchester counties. Orange County in particular, which has consistently led the region in residential single family sales increases over the past several years, saw an 11.1% drop in sales for the second quarter as compared to last year. There were 849 sales reported as compared to 955 sales in 2018.
Sales are slowest in the high end of the market. The number of luxury homes sold north of NYC continues to decline, according to the Houlihan Lawrence 2nd Quarter Luxury Market Report.
Houlihan Lawrence analysts said the consequences of tax reform, a soft NYC market and a generational shift in buyer preferences and attitudes continue to affect the luxury market for the third consecutive quarter.
Sales in the ultra-high end (sales $5M and higher) suffered the steepest losses in the first half of 2019, down by about half or more in Westchester County. Supply is inching up in some markets and the number of years it will take to absorb these listings is increasing, they warned. Westchester has seven years of $5M+ inventory. A balanced market typically has 6 to 12 months of inventory.
They pointed out one bright spot: In Dutchess County, luxury “pended” sales rose dramatically. Dutchess may prove to be the first luxury market to rebound, they said.
“The bigger conundrum facing our luxury markets is quantifying the changing tastes and attitudes of the new generation of luxury buyers. Bigger is not always better and renovating or restoring a period home is the desire of scant few,” said Houlihan Lawrence Senior Vice President Anthony Cutugno. “Their expectation about the future value of real estate influences demand for luxury homes. Though this shift is in its early stages, its impact is tangible.”
Meanwhile, sales and prices for condos and co-ops rose.
In Westchester, condominium and co-op sales increased by 3.6% and 3.8% respectively. At the same time, the median price for a condominium unit rose 8.3% to $400,000 and a co-op unit rose 5.9% to a median price of $180,000.
In Orange County, condo sales were hot. The median sale price rose 16.9% with the number of sales up 13% over 2018.
Co-ops are selling faster, too. The number of days on the market for a co-op unit dropped to 72 from 81 a year ago, HGAR reported.
“Co-ops to some degree are the affordable housing in Westchester,” Barry Kramer, past president of HGAR, told Patch. “Whether it be first-time buyers or empty nesters, we are seeing a great demand.”
Kramer said many Westchester residents are interested in getting out from under bigger homes and property tax burdens. And as the market changes, he said, more and more single family homes are failing to sell and are instead being put up for rent. The rental real estate market in the Hudson Valley is very strong, he said.
He sees the decline in the high-end market as predominantly due to the federal tax law that placed a cap on the state and local tax (SALT) deduction at $10,000.
“That has become a detriment,” Kramer said.
Prior to its enactment, New York taxpayers who itemized could deduct their state and local property and income taxes on their federal returns. The SALT deduction was a major source of tax fairness for highly federal-taxed states like New York, where 35 percent of taxpayers deducted an average of more than $22,000 a year.
The Hudson Gateway Association of Realtors; Congresswoman Nita Lowey (D-NY17/Rockland-Westchester), Chairwoman of the House Appropriations Committee; Westchester County Executive George Latimer; and Town of North Castle Supervisor Michael Schiliro just submitted written testimony to the U.S. House of Representatives Committee on Ways and Means on behalf of the New Yorkers about the cap on the SALT deduction.
“Middle income New Yorkers will bear the brunt of the cap on the state and local income tax deduction,” said HGAR Government Affairs Director Philip Weiden in an announcement about his testimony. “Capping SALT along with the scaling back of the mortgage interest deduction will have long term effects on wealth creation in the U.S. and will hurt Americans’ biggest asset which is their home.”
Realtor.com listings show a wide difference in the length of time on the market for co-ops and luxury single family homes in Westchester. Examples:
151 Center Ave., New Rochelle. 1-bedroom apartment sold for $112,000, Jan. 28, 2019. Days on market: 32.
835 Taylors Lane, Mamaroneck. First listed at $5.9 million in July 2017, it sold June 25, 2019 for $3.65 million.
9 Holly Branch Road, Katonah. Listed at $14.9 million, this estate in Bedford has been on the market for 524 days.
235 Garth Road, Scarsdale. Listed at $230,000. In 2015, it took two months to sell, with a reduction from $205,000 asking price to $200,000 sale price. It has been back on the market for two days.
Published in The Patch July 11, 2019