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Regional Home Sales Decline Sharply in NY Suburban Markets in 2023; For-Sale Inventory Remains Low
A confluence of economic headwinds that included high-interest rates, inflation, low for-sale inventory, as well as international conflicts and domestic political discord, took their collective toll on the residential real estate sales market.
WHITE PLAINS, NY—A confluence of economic headwinds that included high-interest rates, inflation, low for-sale inventory, as well as international conflicts and domestic political discord, took their collective toll on the residential real estate sales market in the New York metropolitan area, according to the Fourth Quarter and Full-Year 2023 Residential Real Estate Sales Report released today by the Hudson Gateway Association of Realtors (HGAR).
While the sales climate in 2023 was difficult, the industry entered 2024 with some early indications that conditions will improve as the year progresses as the Federal Reserve Board appears to have paused, if not ended, its campaign of raising rates to tame inflation. The Fed has forecast as many as three rate cuts in 2024, while some analysts have predicted the Central Bank could reduce rates four times. Lower rates will surely help alleviate the housing affordability issue impacting some buyers and could prompt more homeowners to climb off the fence and put their homes on the market.
Home sales were down by double-digits in each of the six counties that make up the HGAR market area (Bronx, Westchester, Rockland, Orange, Sullivan, and Putnam counties). While sales fell sharply in the region, home prices rose throughout the region, driven at least in part by continued strong demand and historically low for-sale inventory. Data for the HGAR report was provided by the association subsidiary OneKey MLS.
In Westchester County, total home sales were down 23.7% for the full year 2023 and were 15.3% lower in the fourth quarter. The Putnam County market posed a 26.1% decline in total home sales in 2023 and a 16.8% drop-off in the fourth quarter. Home sales in Rockland County fell 25.7% for the full 12 months of 2023 and 20.2% in the fourth quarter. The decrease in home sales in Orange County for the full year was 25.5%, while the market ended the year with a 25% decline in the fourth quarter, according to the HGAR report.
Rounding out the HGAR markets, Sullivan County posted a 25.8% decrease in total home sales for 2023 and an 18.4% decline in the fourth quarter. While home sales also fell in the Bronx for the full year and in the fourth quarter of 2023, the borough posted the lowest sales decline of all the HGAR markets, down 19.8% for the year and 12.2% in the fourth quarter.
2024 HGAR President Carmen Bauman said the residential sales market last year was difficult. “Not surprisingly, the fourth quarter statistics for HGAR’s geographies are down over last year’s numbers due to the nationwide theme of lack of inventory and high-interest rates,” she said. “Indeed, we closed out the year with an overall negative change in the marketplace averaging a decrease of almost 25% in sales.”
Bauman, who is an Associate Broker with commercial real estate brokerage firm RM Friedland, noted, “Still, my outlook for 2024 is a positive one. Real estate is not just an investment in bricks and mortar; it’s an investment in the promise of growth and stability. So, let’s keep the faith and see what this year will bring.”
Home Prices Rise in Most Suburban Markets
The HGAR report noted that the median sale price of single-family homes increased or was relatively flat in all six counties for the full-year 2023. The Westchester County single-family median home sale price for the full-year rose 4.3% to $850,000, while the median for the fourth quarter shot up 11.8% to $840,000. The median sale price for 2023 in Putnam County dropped slightly by 1% to $485,000, while the fourth quarter median rose by 8.3% to $520,000. The single-family median home sale price in Rockland County for the full-year rose 3.6% to $660,000, while the fourth quarter median increased 8.8% to $680,000. The median single-family home sale price in Orange County rose 6.3% for the year and 6.2% in the fourth quarter to $425,000 and $430,000, respectively.
Sullivan County’s median single-family home sale price rose 5.7% for the full-year to $280,000 and finished the year strong with a 13.5% increase in the fourth quarter to $295,000. The Bronx posted a 2.7% decline in its median single-family home price for the full year 2023 at $605,000, but registered a 2.5% increase in the fourth quarter single-family home median sale price at $630,500.
Low Inventory Continues to Plague Market
The residential real estate market in the region entered 2023 with very low inventory and homeowners who financed their purchases with historic low rates in the 3% to 4% range, were reluctant to put their homes on the market and finance their new purchases at rates that at one time approached 8%.
For the full year, all markets suffered significant for-sale inventory shortfalls. For example, Westchester County posted a 24.3% decline in residential properties on the market for sale. For some perspective, Westchester ended the year with 1,044 properties on the market for sale. At the end of 2020, there were 2,344 available properties for sale. Putnam County posted a dramatic 31.4% decline in inventory to 140 properties for sale at the end of 2023. Rockland County’s for-sale inventory at year-end 2023 was flat (down 0.8%) with 356 properties for sale. Orange County registered a 9.8% decline in inventory to 691 available properties. Sullivan County’s inventory was also flat at year’s end (down 0.3%)as compared to 12 months earlier with 329 available properties. Finally, the Bronx suffered a 17.6% drop in inventory for 2023 as compared to a year earlier and ended the year at 951 properties on the market for sale.