WPAR Presents 2009 Fourth Quarter and Full Year Residential Real Estate Sales Report

Jan. 25, 2010 - PRLog -- The Westchester-Putnam residential real estate market endured deep recession throughout 2009.  The 5,824 Westchester sales reported through the Multiple Listing Service were 12% fewer than in 2008, which itself was a recessionary year.  Putnam County sales (643 units) also were down by 12% from 2008 to 2009.  Such low sales volumes for the Westchester-Putnam region were last recorded in 1993.

At the same time, sales activity increased with each passing quarter of 2009. In the first quarter Westchester’s sales volume had plunged 37% below 2008 levels. In the second quarter the negative year to year difference was 31%, followed by 10% in the third quarter.  In the fourth quarter, sales volume finally surpassed that of a year ago, and by significant amounts.  Westchester’s reported fourth quarter closings of 1,823 properties constituted a 31% increase over the fourth quarter of 2008.  The single-family house sector posted a 36% increase.  In Putnam County the fourth quarter house sales were 14% more than in 2008.

Seasonally adjusted, the fourth quarter sales rate in Westchester was equivalent to 7,840 units per year, an increase of 27% from the prior quarter. Putnam County’s seasonally adjusted rate climbed to 800 units per year, an increase of 11% from the prior quarter. Some of this reenergized market activity was attributable to the federal tax credit stimulus program whose term was extended, eligibility expanded, and usefulness enhanced by supportive New York State programs, such that home-buying decision-making by first-time buyers was accelerated.  However, first-time home buying is a limited fraction of the Westchester-Putnam market. Much more of the fourth quarter rebound could be attributed to an emerging recovery in the real estate market as a whole, driven in large measure by decreasing price levels that finally stimulated demand, and by stable, low mortgage interest rates.


The 2009 median sale price of a Westchester single-family house was $580,000 or about 11% less than in 2008. That price was a full $105,000 or 15% less than the $685,000 median sale price posted in the 2007 peak year. As has been previously noted in these reports, some of the price slippage in our area has been due to the particular weakness of the high-end sector, namely houses selling for $1 million or more.  Such properties accounted for only 17% of all sales in 2009 whereas the ratio ranged from 21% to 25% during the period 2004 to 2008.

On a quarter-by-quarter basis, the Westchester single family median sale price was $532,000 in the first quarter and $565,000 in the second quarter of 2009, down 15% and 16% respectively from the comparable 2008 periods.  In the third quarter the $630,000 median was down 11%. In the fourth quarter the median sale price of $560,000 was down by only 2% from the fourth quarter of 2008.  The pricing path of the condominium and cooperative sectors was less direct than that but there was a net upward movement in those sectors, too, over the course of the year.  There was a clear trend line through 2009 toward price recovery rather than further price decreases.

One local factor that tended to militate against the precipitous loss of market value experienced in many other parts of the nation was the relatively stable inventory of properties for sale. The 2009 year-end inventory in Westchester of 5,380 properties was virtually unchanged from the 2008 level. This was in spite of the increasing spate of foreclosure filings that averaged 200 monthly in the first half of the year but that exceeded 300 monthly in the second half.  

Only about 20% of the area’s foreclosure filings result in actual foreclosure judgments; the  balance seem mostly to be resolved through short sales although some few are resolved through refinancing, negotiated forbearance or other workouts. It appears that for 2009 at least, there were not enough short sales or transactions of lender-owned properties at significantly sub-market prices to cause an unmanageable overhang of inventory or to drag down the overall market pricing structure.  What continues to most control the amount of inventory in Westchester and Putnam is the willingness and ability of potential home sellers to stay out of the market until conditions improve. Smaller inventory usually means greater resistance to price devaluation.

What is starting to look like recovery in the real estate market of course can still be derailed by other adverse conditions such as increased mortgage interest rates, persistent unemployment, and reversals in the equity markets that induce new caution by investors and ultimately all consumers including home buyers.  For now the equity markets are giving encouragement as investors have watched the Dow Jones Industrial Average climb from less than 7,000 in March to more than 10,000 by December of 2009.  Average mortgage interest rates flashed red in June as rates on 30-year conventional loans briefly exceeded 6.0%, but they steadily progressed downward to as low as 5.0%  since then.  However, forecasters seem to be hedging their bets as to whether rates will climb again. Just a percentage point increase, especially if sudden, could frustrate a real estate recovery.

The most worrisome threat to the area’s real estate market is the persistently high rate of unemployment throughout 2009 and probably continuing into 2010.  The concern is that this will lead to ever increasing numbers of foreclosure filings. Up to now the Westchester-Putnam real estate market has been able to absorb the moderate amounts of short sale and lender-owned properties in relation to the entire inventory of properties for sale.  With many more foreclosures, however, there could come a tipping point at which an overhang of inventory develops and prices of both normal and impaired properties start to cascade downwards.

But this is not the case for now, and clearly the pattern of quarterly activity in 2009 and particularly the fourth quarter have established a momentum for improved conditions in 2010.  Sales volumes are exceeding what might be expected from the tax credit programs alone. Westchester and Putnam County prices, which have not approached the level of collapse experienced in many other areas of the nation, seem to have leveled out in the range of 15-16% below their peaks in 2006 and 2007 – enough to renew buyer interest - and are closing in on 2008 levels.  If the price trends continue, the first quarter of 2010 might show sales prices slightly ahead of what they were in the first quarter of 2009.  

The Westchester-Putnam Multiple Listing Service, Inc. (WPMLS) is a subsidiary of the Westchester Putnam Association of Realtors, Inc. WPMLS serves more than 900 real estate offices having listings in Bronx, Westchester, Putnam and Dutchess Counties.  All data tables refer to Westchester County sales unless expressly noted otherwise.  The reported transactions do not include all real estate sales in the area or all sales assisted by the participating offices but they are fairly reflective of general market conditions.  WPMLS does not provide data on sub-county geographic areas. Persons desiring sub-county data are invited to contact participating real estate offices in the desired areas.  Any text or data from this report may be reprinted with attribution to Westchester-Putnam Multiple Listing Service, Inc. as the source. Prior reports dating back to 1981 are available on the Realtor Association’s website, www.wpar.com; click on Market Statistics.

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The Westchester Putnam Association of REALTORS®, Inc. (WPAR Inc.), a non-profit trade association, represents 7,500 real estate professionals in Westchester and Putnam Counties. It also owns and operates the Westchester-Putnam Multiple Listing Service.