Westchester County’s brokers expect real estate prices to continue to decline but say that buffering economic factors could return activity to healthy levels sometime in 2007.
Gilbert Mercurio, executive vice president of the Westchester County Board of Realtors, noted that mean sale prices hovered close to the medians in recent months, which suggests that houses in all price ranges were equally affected in the third quarter.
The number of third-quarter sales in Westchester County dropped from 3,278 in 2005 to 2,718 in 2006, a 17 percent change. The median sale price of a single-family house increased only 0.6 percent over the same period of last year, less than October’s inflation rate of 1.3 percent.
Condominium and multifamily house prices fell by 1.3 and 0.4 percent, and co-ops — which are few in number — saw the only positive change with a 5.4 percent rise.
Inventory rose 22 percent in the third quarter in Westchester, from 6,005 units in 2005 to 7,326 units in 2006. In the second quarter, the year-on-year inventory had increased by 30 percent.
“In the early 1990s, following the stock market mini-crash of 1987, inventories of more than 10,000 and even 11,000 units were posted,” Mercurio said. “As the market recovered in the later 1990s, the level was more often in the 6,000 to 8,000 range. That’s where we are now again.”
Brokers say sellers haven’t adjusted to the new realities of the market and are marking their properties too high or simply deciding not to sell until prices skyrocket again. Buyers, on the other hand, have misinterpreted the recent deceleration of the market and concluded that sellers are fleeing for the hills, leaving behind devalued properties ripe for the plucking.
“Both sides are wrong,” said Mercurio, who expects that “prices likely will decrease.
“In the fourth quarter we may well see the first real year-to-year decrease in the median and mean sales price of a single-family house in Westchester since the 1990-91 recession.”
Economic factors could be a buffer. The unemployment rate is 3.8 percent, and has been lower than 4 percent for several years; the county has some job growth; gasoline prices have decreased; and the stock market has a positive outlook.
“Assuming that the national economy as a whole does not fall into recession, Westchester and Putnam are well poised to resume healthy real estate activity sometime in 2007, especially if moderating prices allow and encourage more purchasers into the marketplace,” Mercurio said.