Third Quarter Home Sales Fall Sharply in HGAR Market Area

WHITE PLAINS—While Realtors say that home buying demand is still strong, high interest rates and critically low inventory caused residential sale transactions to fall precipitously in the third quarter of 2023.

According to the recently released “2023 THIRD QUARTER REAL ESTATE SALES REPORT: Westchester, Putnam, Rockland, Orange, Sullivan and Bronx counties, New York” by the Hudson Gateway Association of Realtors, overall residential sales, as compared to the third quarter of 2022, fell 20.8% in Westchester County; 33.8% in Putnam County; 22.6% in Orange County; 25.3% in Rockland County; 26% in Sullivan County and 23.7% in The Bronx.

Year-to-date through Sept. 30, 2023, overall sales have fallen sharply in all markets as compared to a healthier market through the first three quarters of 2022—Westchester sales were down 25.9%; Putnam sales were down 28.8%; Orange County’s overall sales numbers declined 25.8%; Rockland County sales were down 27.3% Sullivan County sales have fallen 28.1% and home sales have declined 22.2% in The Bronx.

While home prices have stabilized in some sections of the United States, the lack of inventory continues to put upward pressure on prices in the HGAR market area. The median sale price of a single-family home in the third quarter increased 6.3% to $925,000 in Westchester County; 1% in Putnam County to $510,000; 7.1% in Orange County to $450,000; 4.5% in Rockland County to $690,000 and 7.3% in Sullivan County to $299,500. The median sale price of a single-family home in the Bronx fell 2.8% in the third quarter to $612,500.

For-sale inventory is down sharply in five of the six HGAR market areas, with Sullivan County the only market to post less than double-digit percentage declines as compared to a year ago.

Hudson Gateway Association of Realtors President Tony D’Anzica said the recently released third quarter statistics for the HGAR region continue to reflect a troubling weakness in the real estate market. “Third quarter closed sales in the Bronx, Westchester, Rockland, Orange and Putnam counties all dropped precipitously by about 25% compared to the second quarter. With 30-year mortgage rates recently peaking around 8%, their highest level in over 20 years, mortgage demand falling to the lowest level since 1996, and median sales prices continuing to increase every quarter, buyers are facing the toughest market in decades,” he said.

D’Anzica, who is Broker-Owner of DynaMax Realty NYC, Inc., also pointed to another troubling sign for the market as the National Association of Realtors’ Housing Affordability Index has continued to decline this year causing housing affordability to reach one of its lowest levels in nearly 40 years.

“It’s clear that the record low housing inventory and high interest rates are both driving this market downturn. Few, if any, reasonable policies are being implemented (or even discussed) at any political level to address these issues,” he added.

HGAR President-elect Carmen Bauman, Principal Broker of Green Grass Real Estate of Bronxville, said that the current residential real estate marketplace is dominated by high demand and high pricing. Bauman, who is also an Associate Broker with commercial real estate firm RM Friedland, noted in a recent webinar presented by Orange Bank & Trust Co., “Consumers’ challenges are further complicated by record level interest rates. Commercial real estate is more complex: multifamily remains strong, hospitality is on the cusp of a rebound, the industrial warehouse sector has growth largely driven by the prevalence of e-commerce during the pandemic—while the inverse became true for traditional retail—and office space remains in flux as almost all companies, large and small, are reconsidering their needs.”

Bauman related that during the height of the COVID pandemic, the region saw a “temporary exodus,” by some residents but since then many of those individuals have returned to the area, including a number who have decided to rent in new high-rise rental apartment buildings in Westchester County. She said that the multifamily rental market is ‘booming” and many of these new developments are currently enjoying high absorption rates. She said in the coming months and years it will be interesting to see if the multifamily market can maintain the high absorption rates as new product comes on line in the county’s major cities.

Houlihan Lawrence in its third quarter residential report stated that the region is experiencing intense buyer competition in most price categories, despite the prevailing market headwinds. In fact, the brokerage firm contended that homes spent the lowest amount of time on the market in years, which it attributed to “ready, willing, and able buyers and a large percentage of cash purchases.”

“In certain markets, the number of top-price tier listings is beginning to increase, affording more variety for buyers. While the demand might suggest otherwise, buyers remain discerning. Accurate pricing remains critical as overly inflated prices can cause homes to be overlooked and seller disappointment,” said Houlihan Lawrence President and CEO Liz Nunan.

Nunan added, “We anticipate buyer demand to continue with our markets offering so much, from housing to recreation, culture, and more. It remains an opportune time to sell north of New York City.”

Leah Caro, President and Principal Broker of Park Sterling Realty of Bronxville advised her fellow Realtors that it may be time to stop complaining and start thinking about employing alternate strategies during this trying market.

“As buyers continue to fight for the ‘good stuff’ in multiple offer scenarios, at above list price, it might be time to reset their expectations. Buyers who are currently renting, and looking for that perfect ‘forever” home,’ should consider a spring-board purchase like a co-op or condo,” Caro said. “Buying a more cost-effective home, with more choice in inventory than the single-family market, will still give them the opportunity to earn equity for the next purchase and will likely cost them less every month than the highest-rents-ever they may be paying now.”

Caro related that sellers who believe the current high interest rates are deterring some buyers from putting in an offer on their home might consider offering owner financing and should seek advice from their lawyer or tax accountant to see if that would be feasible.

“Buyers interested in the 2-4 multi-family markets will definitely benefit from the new 5% down financing options, and they should examine this with their mortgage professional. Any extra income earned from the other units in the house could help offset the interest rates,” Caro noted.

Finally, she said that buyers’ agents should search for listings that have been on the market for 90 days to see if any deal could be struck.

“Agents can’t control the interest rates, the inventory, or the global economies but they can use innovative strategies to help buyers buy, and get transactions moving,” Caro stressed.