Inventory growth cancels out sales volume in Westchester in first quarter

Rise in pending sales offers hope for second quarter

Sales volume edged higher in Westchester County in the first quarter of 2012, according to reports by Prudential Douglas Elliman and Houlihan Lawrence released today. But, that was countered by growth in inventory, the Elliman report indicates, and a decline in the average sales price.

The number of sales in Westchester increased 1.8 percent to 1,277 from 1,254 sales in the prior-year quarter, the Elliman report shows, but listing inventory increased 1.5 percent to 6,769 units from 6,667 units at this time last year. Meanwhile, average sales prices declined 3.4 percent to $534,977 from $553,846 in the prior year quarter.

“The overall market is trying to stabilize,” said appraiser Jonathan Miller or Miller Samuel, who prepared the report on behalf of Elliman. “We have this interesting dynamic where sales activity is up but is matched by an uptick in inventory. The absorption rate, which to me is the intersection of supply and demand, is unchanged.”

On the other hand, the luxury market saw year-over-year price increases as the overall market fell short of year ago levels, Elliman found. Volume of sales in the high-end south central area of Westchester jumped from 95 per quarter in the first quarter of 2011 to 169 in 2012.

“The high-end of the market has seen some pretty strong pricing,” Miller said. “If you look at how the regions are performing, South Central almost doubled. That’s a big jump. It’s a similar pattern where you’re seeing the high-end of the market outshine the balance of the market.”

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The market share of five-bedroom units jumped to 18.5 percent in the first quarter from 13.4 percent in first-quarter 2011, for example, an indication that luxury-end properties are affecting overall pricing.

While brokerage Houlihan Lawrence’s first-quarter report corresponded on the whole with Elliman’s report, it also championed a surge in pending sales, defined as sales which will close within 60 to 90 days of the end of the quarter.

In Westchester, pending sales at quarter’s end were up 31 percent over the first quarter of 2011, the Houlihan Lawrence report indicates.

“Spring was in the air much earlier than usual this year,” said Christopher Meyers, COO of Houlihan Lawrence. “The mild weather has played a role, and economic indicators such as jobs, interest rates and the stock market have been supportive over the past six months. But the real wild card that determines market psychology can be much harder to predict or to pin down.”

The next two quarters will tell whether it’s truly the beginning of a new, long-term bull market for spring, he said, or if the surprising strength of the first quarter fades.