Experts say the real market in the Lower Hudson Valley may finally be turning the corner after the coronavirus pandemic and subsequent executive orders limiting businesses halted a bullish spring market.
Tightening restrictions on mortgage lending and an overall decline in sellers and buyers in the New York metropolitan area have made it tough for individuals to enter the market in recent months.
And the collective measures known as New York State on PAUSE have led to one of the slowest spring markets on record for Westchester, Rockland, Orange and Putnam counties.
But Gail Fattizzi of the Hudson Gateway Association of Realtors, a trade association covering residential real estate in the Lower Hudson, said that for the residential market priced under $1 million, there are early signs of improving conditions.
Pent up demand, she said, may make for an active summer and spring this year. But it will all depend on when the real estate industry in the region is permitted to resume operations in full.
“(Consumer confidence) has been coming back so I think people are feeling more… I don’t want to say comfortable, that’s maybe not the right word… but more accepting of where we are and feeling the things are starting to stabilize,” Fattizzi, the president of HGAR said. “Activity is picking up.”
A combination of the coronavirus, volatility in the stock market and the growth in job losses in the region shook up overall consumer confidence and financial institutions at the end of March and through April, Fattizzi said.
But the number of new listings increased by 16% on a week-over-week basis from the last week of April to the first week of May, according to HGAR.
And while the total number of new listings may be significantly lower than the number of new listings during a normal spring market, buyers and sellers are starting to grasp the new reality, according to Fattizzi.
Analysts told The Journal News/lohud back in early March that they expected the residential market in the region to be sustained by the number of pending transactions. And while that has been the case for the most part, Fattizzi said buyers and sellers have varying opinions about purchasing a home virtually.
Joseph Rand of brokerage firm Rand Commercial in New City said despite a healthy number of pending transactions from the first quarter of 2020, subsequent months are expected to be slow, making for an active late-summer and early fall.
“Closings will slow (in the second quarter) because (the) pipeline is winding down — probably 60% down from last year,” Joseph Rand said. “New contracts and listings will continue to be challenged until… the essential services orders are relaxed.
“If… essential services orders are relaxed by June, the market should return in summer. Closings will be light early on because of the small second quarter pipeline, but it will catch up by late-August and early September.”
Gov. Andrew Cuomo’s directive to reopening the state calls for real estate and leasing services to resume work in full in phase two of the four phases. Until specific criteria on coronavirus deaths and infections has been met, the New York State Association of Realtors has recommended brokers avoid in-person contact with clients and to consult with an attorney before planning unaccompanied showings.
By the numbers
Market forces afflicting the real estate market in the Lower Hudson are having similar effects throughout the country, according to real estate brokerage RE/MAX. Sales throughout 53 markets in the country, the brokerage firm said, dropped by an average of 20% on a year-over-year basis for the month of April.
RE/MAX said fewer sellers and buyers entered the market in April, while the medial sale price for the same markets rose 9.3% on a year-over-year basis to $276,000. Transactions in Westchester, Queens, Nassau, Kings and Bronx counties collectively dropped by 42%, according to the brokerage, for the month of April. Active inventory also declined by 36% in April.
Joseph Rand of brokerage firm Rand Commercial and HGAR said ‘higher-income clients were more likely to close (in April)’ while the highest priced counties in the region — Westchester and Bergen, New Jersey — saw less of a decline on a year-over-year basis.
HGAR provided the following statistics about the status of the market:
- New single-family home listings in Westchester declined by 79% on a year-over-year basis to 271. Total sales declined by 11% on a year-over-year basis in April.
- 88 homes were sold in Rockland County in April, representing a 25% decline on a year-over-year basis.
- Total sales in Putnam County increased by 37% on a year-over-year basis in April. New listings declined from 231 to 52.
- Orange County saw a 40% drop in sales to 194 in April; new listings declined by 62% to 225 on a year-over-year basis.
Tips for buyers and sellers
- Sellers and buyers must be ready to negotiate and explore all options.
- Buyers must negotiate based on improvements, listing price and appraisal values.
- Sellers must evaluate the discounts they are willing to offer at the expense of waiting for better economic conditions.
- Buyers must be ready for heavier scrutiny from financial institutions.
- Refinancing is still an option: Whether or not homeowners are on the market, interest rates and mortgage rates have seen a sharp decline in recent months.
Posted by LoHud.com