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Archive for the ‘Quarterly Stats’ Category

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EXECUTIVE SUMMARYby Stephen Meyers (CEO) and Chris Meyers (President)

Cooling. Not just the temperatures. We forecasted chilly market conditions for Q4 and our predictions held true. Financial markets entered negative territory after a ten-year run, while savvy investors were likely prepared for the inevitable dip, the volatility that accompanied the declines left even the sturdiest investors feeling a bit uneasy. As a result, pending sales across all three counties experienced steep declines. Each county was down by double digits and pending sales declined sharply as you moved away from New York City. Westchester was down 10.9%, Putnam down 11.4% and Dutchess down 17.2%. While the drastic drop in pending sales in Dutchess County can be partially attributed to reduced inventory, down 11.8%, the same cannot be said for Westchester and Putnam counties, where inventory was on the rise 9.5% and 1.8% respectively. With the exception of the Northern Westchester area, all other areas in Westchester increased in inventory, with some areas jumping 20% and as high as 35% just north of New York City. Despite the rise in inventory, showings were flat compared to last year. Showings for homes priced below 1 million dollars and above 2.5 million dollars were down. Showings for homes priced between 1 million and 2.5 million dollars offset the declines on either side. The sweet spot was between 1 million and 1.5 million, where showings were up 30%.

Here are some trends we are seeing as we head into the new year: Our data shows that nearly one third of buyers in our area come from New York City. The once red-hot New York City market has cooled down significantly over the last few months, the resulting effect is a smaller pool of buyers heading north. That being said, we did see a short burst of showing activity in the first half of January. Showings at every price point above $500,000 improved compared to last year. Below $500,000 however, where inventory has not yet recovered, was down 26%. Pricing will continue to be a key factor. The median sale price rose slightly in Q4 in Westchester, making it an all-time high. The market is shifting, and pricing will need to shift with it. In this new market of increasing supply and lower demand, setting a high price and then gradually reducing will result in chasing the market down. In Westchester, homes priced correctly out of the gate sell, on average, in 48 days and at 99.6% of the asking price. Homes priced too high, that experience one or more price reductions spend an average of 328 days on the market and sell for 82.5% of the original list price. Those numbers balloon as you move north away from the city, to as high as 391 days on market and 78.7% of the original list price in Putnam County after price reductions. Interest rates are expected to rise again this year and changes to the tax law are beginning to have an impact on how both buyers and sellers perceive the value of homes. The net result is that sellers in 2019 may have to accept that their home will achieve a selling price that is less than they imagined. Their motivation and willingness to price competitively will drive the market. Houlihan Lawrence remains committed to providing you with meaningful analysis and local knowledge the empowers you to make the best decision possible.

To see the complete report CLICK HERE.

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Fourth Quarter 2018 Executive Summary – Luxury Market Report (Excerpt)
by Anthony Cutugno (Senior Vice President/Director of Private Brokerage):

While luxury markets north of NYC registered losses in 2018, the uber-luxury segment of the market demonstrated notable growth. Sales over $10M peaked in Westchester County in 2018. Houlihan Lawrence represented David Rockefeller’s country estate, Hudson Pines. Listed for $22M, Hudson Pines sold for a record-setting $33M and was the highest recorded sale in Westchester County. In total, five sales closed over $10M in 2018 (a monumental gain from a single sale in 2017) and exceeded the previous high set in 2005. These exceptional but finite sales did not make up for the overall decline in luxury sales. In Westchester, luxury sales ($2M and higher) declined by double digits in 2018. Fourth quarter declines were especially deep in many markets, dragging down year-end losses and placing even more pressure on pricing. Many indicators point to a softening market in 2019. Pended sales (expected to close within 60 to 90 days) are down across the board and could impact first quarter sales.

The once red-hot market in NYC cooled down in 2018, resulting in a smaller pool of buyers heading north. Houlihan Lawrence’s proprietary data indicates that 25% to 30% of luxury buyers originate from NYC and a significant chunk of losses experienced in 2018 are attributable to this shift. The financial markets entered negative territory after a rousing 10-year run. Savvy investors were likely prepared for the inevitable dip but the volatility that accompanied these declines left even the sturdiest investor uneasy. Interest rates are expected to rise again in 2019 and while that does not materially affect the purchasing power of the luxury buyer, it sends a signal about the overall strength of the economy and impacts consumer confidence. There are economic bright spots and opportunities for the savvy buyer to embrace as we enter 2019 – unemployment is at a record low and the equity markets created extraordinary wealth since 2008, despite 2018 losses. Tax changes can result in a net positive gain for some and the next three months will provide clarity to those who ultimately benefit. Sellers may have to accept their home could achieve a selling price far less than they imagine, and their motivation to sell and price competitively will drive the market in 2019.

To view full report CLICK HERE.

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EXECUTIVE SUMMARY (Excerpt) by Stephen Meyers (CEO) and Chris Meyers (President)

Softening. At the end of Q2, we discussed the likelihood of prices leveling off and, in some markets, edging back. At the end of Q3, we are starting to see prices doing just that. When you look at the overall picture, inventory is on the rise in nearly every market, pending sales are declining, and sales are either flat or declining. What we are seeing is a market that is softening.

In Westchester, home sales were down 4.1%. Although overall inventory was up in Westchester, it’s important to note that inventory continues to be low at the most affordable prices, homes priced below $500,000. A troubling sign was the decrease in showing activity by 11% through the end of the quarter. Some of that decline could be attributed to lower inventory at affordable price points, however, overall showings were down for homes priced up to $1,500,000. As showings are a leading indicator of pending sales, it’s no surprise that pending sales are down across the board.

Here are some trends we are seeing as we move towards the end of 2018. The early fall market conditions are pointing to a chilly winter ahead. Despite inventory rising at an even faster pace than Q3, showings continue to be down more than 11.5%. More supply and less demand places potential home buyers in the driver’s seat. It remains to be seen however if they are going to take the wheel. With listing prices remaining nearly flat at all-time highs, interest rates on the rise and wage growth nearly stagnant, buyers may not be interested in making a move anytime soon.
For sellers, we mentioned it last quarter and we are reiterating it again. If you want to sell, you will need to price competitively. The luxury of low inventory is gone. In this market, setting a high price and then gradually reducing will result in chasing the market down. In Westchester, homes priced correctly out of the gate sell, on average, in 49 days and at 99.8% of the asking price. Homes priced too high, that experience one or more price reductions spend an average of 344 days on the market and sell for 82.4% of the original list price.

To read the complete executive summary and to see the comprehensive report CLICK HERE.

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Third Quarter 2018 Executive Summary – Luxury Market Report (Excerpt)
by Anthony Cutugno (Senior Vice President/Director of Private Brokerage):

Luxury homes sales north of NYC through the third quarter showed mixed results. In Westchester, luxury sales (sales over $2M) were down slightly. Recent reports indicate the housing sales nationwide are slowing because wage growth is not keeping pace with the increase in real estate prices. Our luxury markets do indeed appear to be slowing down, but lack of wage growth is not a factor for luxury buyers. In fact, the ten-year bull market created $18 trillion in wealth since the Standard & Poor’s 500 bottomed on March 9, 2009. Despite these record-setting gains in the stock market and net worth, the luxury buyer north of NYC is defined by a cautious and restrained approach to real estate. They are reminded that real estate can decline in value, and the fear of overpaying is a primary concern. Luxury rentals have increased since last year and offer an easy wait-and-see solution. The pursuit of value drives the purchase decisions of today’s buyer. They want a fair price that can be justified by comparable sales, and confidence in the property’s marketability should the need to sell arise. A surplus of luxury inventory justifies their caution: At the close of the third quarter, there were 467 luxury homes ($2M and higher) for sale in Westchester County and 57 homes in contract. Motivated sellers are paying attention to the importance of pricing and its out sized ability to attract the attention of buyers with a value-driven offering. Sellers who priced their homes ambitiously are reducing or withdrawing them from the market.

To view the complete summary and the full report CLICK HERE.

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EXECUTIVE SUMMARY (EXCERPT) by Stephen Meyers (CEO) and Chris Meyers (President)

Winds of change. For the first time in over a year, inventory was on the rise in Westchester. The likely reason for this renewed interest in listing homes in Westchester was the continued rise in average sale prices, up 2.5% to $920,470. The rise in prices combined with the changes to the tax laws was seen as an opportunity for sellers to wade in. They may, however, be late to the party as showings, pending sales and sales were all declining in Q2. Showings were down at most price points, overall down 6.4%. Homes priced below one million took the hardest hit, on average down 8.5%. Pending sales were down 8.8% in Westchester. There were no exceptions in the number of homes sold. Overall, homes sold in Westchester were down 4.4%.
Here are some trends we are seeing as we move into the second half of the year:
While hopeful that this burst of inventory will spur on the market, it may be the case that buyers are now the ones on the fence. We continue to see median sale prices edging higher. Buyers are beginning to feel the strains of the loss of purchasing power due to the combination of higher home prices, higher interest rates, stagnant wage growth, increasing
cost of goods and services, and lower affordability due to the tax changes. As buyers are feeling strained, fewer of them are able to reach deals with sellers. We are seeing the number of homes
sold come down moderately across our markets. Typically as this happens, inventory rises, and for the first time, we are seeing higher year-over-year inventory in some, but not all markets.
Despite inventory increasing, showings in July are down nearly 16% compared to last year. As inventory rises, it will be important for home sellers to price competitively from the beginning if they are serious about selling. In a flat or potentially declining market, setting a high price and then gradually reducing often results in chasing the market down. In Westchester, homes priced correctly out of the gate sell, on average, in 49 days and at 99.8% of the asking price. Homes priced too high, that experience one or more price reductions spend an average of 344
days on the market and sell for 82.4% of the original list price. Pricing is key. We are reaching an inflection point and likely the beginning of a topping period for most markets for the next 18 to 24
months. We will likely see prices start to level off, if not edge slightly back as we head towards the end of 2018.

To read the complete executive summary and to see the comprehensive report CLICK HERE.

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Second Quarter 2018 Executive Summary (Excerpt)
by Anthony Cutugno (Senior Vice President/Director of Private Brokerage):

The luxury market in Westchester ($2M and higher) improved after posting a 20% decline in Q-1. Year-to-date, luxury sales are down just 7% and Q-2 sales kept pace with the same period last year. Despite a decline in Westchester’s luxury market, the ultra-luxury segment of the market ($5M+) is performing better than it has in years. Through June 30th, there are a total of 21 closed and pended sales over $5M, compared to 19 sales in 2016 and 18 sales in 2017. Pended sales will likely close this year, and 2018 is on track to exceed the previous two years. More significant are
the number of $10M+ sales this year. Two closed and three are pending – a striking increase from 2016 and 2017, when a single $10M+ sale closed each year. The ultra-luxury segment momentum is evidence that buyers are resurfacing. Their behavior is marked by a combination of right-brain and left-brain decision-making. A property’s location, lifestyle and quality appeal to
their emotions, which is important but often not enough to make an offer. Typically, when the left-side of the brain can rationally identify value and justify the purchase price, a buyer will confidently move forward. Both heart and head have to be in agreement because one without the other creates inertia. For sellers, there is plenty of competition in the luxury market for buyers’ hearts and minds. Positioning your home to entice a buyer is equally as important as pricing your home realistically. One without the other leads to a listing that can languish on the market.

To view the complete summary and report CLICK HERE.

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First Quarter 2018 Executive Summary
by Anthony Cutugno (Senior Vice President/Director of Private Brokerage):

The first quarter of 2018 marked an important milestone for Houlihan Lawrence and Westchester County. In February, Hudson Pines, the country home of David Rockefeller in Pocantico Hills, sold for $33M and represents the highest recorded sale in Westchester County. Listed by Houlihan Lawrence in September for $22M, its provenance and architecture generated substantial interest and ultimately sold for 50% over its asking price. The broader luxury market in Westchester County (sales over $2M) declined over 20% the first quarter. Fortunately this is not part of a larger trend. Sales increased in the fourth quarter by 9% and closed out 2017 with a near 5% increase. Luxury pending sales are up slightly, but the decline can likely be attributed to the small numbers and wide percent change swings of first quarter data. In Dutchess County, where luxury sales (sales $1M and higher) have yet to recover from 2008, the market may have turned the corner. Incremental growth in 2017, coupled with a notable uptick in total dollar volume in the first quarter, points to a broader trend in Northern Westchester and the Hudson Valley – the return of second-home buyers. The energy and ethos of the Hudson Valley are attracting a new generation of luxury buyers. Farm-to-table restaurants, art galleries and its community of artisans offer a quiet sophistication that is pitch-perfect with younger buyers. Compared to overheated and overcrowded second-home markets like the Hamptons, the Hudson Valley’s value proposition and ease of commute to and from NYC are becoming hard to resist. In Greenwich, the ultra-luxury market (sales $5M and higher) is keeping pace with last year’s stellar performance. First-quarter closed and pending sales grew over last year, and strategic pricing is driving its growth. Luxury buyers have the wherewithal to make significant residential purchases, and their willingness to act is triggered by correctly priced homes. When a seller lists his home at an offering price that aligns with buyer’s determination of value, it’s not surprising that a properly priced home sells within 5% of its offering price. We are in a demographically ripe environment – Gen X and Millennial buyers outnumber baby boomers, and will fuel growth for many years. No matter what generation of luxury buyer, larger macro-economic issues remain an ongoing concern. The volatility on Wall Street and in Washington, inflationary fears stoked by rising interest rates, and trade wars and global uncertainty could impact confidence levels that are critical to the luxury sector.

To view the complete report CLICK HERE.

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