With housing prices so low over the past few years, many homeowners in the Lower Hudson Valley have been reluctant to put their own homes on the market.
Even if they think they’re ready for a move – either and upgrade to something larger or a downsizing now that the kids have moved out – they just can’t do it at these rock bottom prices.
As a result, they’ve decided to stick it out in their current home and wait for prices to pick up again. A new study from the Hudson Gateway Association of Realtors, which covers all of Westchester, Rockland, Putnam and Orange counties, found this trend to be a major factor in 2012, according to annual and fourth quarter reports issued by the group issued week.
Nationally, the amount of homes on the market has plummeted even further – a whopping 19 percent compared to the local 12 percent.
According to the HGAR report:
The supply of for-sale housing listed with MLS Realtors has generally been quite low since 2008, largely due to the reticence of many potential sellers to enter the real estate market when economic conditions have been so uncertain and it appeared to them that their property would not command the kind of sale price they expected.
But in addition to that factor, the higher sales volumes reported in 2012 have also served to draw down the available inventory.
The 2012 year-end stock in the four-county region amounted to 9,622 units, a decrease of 9% from the 10,603 available units at the end of 2011.
The decreases ranged from 12% in Westchester to 3% in Putnam; Rockland and Orange counties reported decreases of 11% and 4%, respectively.
While these amounts do not in any sense constitute a shortage of housing, the leaner than usual supply can be felt in the marketplace.
Some Realtors have reported that prospective purchasers have had to speed up their decision making process in order to secure a property from competing buyers.
So what’s next? Donald Mituzas of Brewster says it’s hard to predict when the inventory drain will reverse.
“It seems to have bottomed out (but) it’s hard to say,” says Mituzas, a director at HGAR and real estate agent with Douglas Elliman in Katonah.
He expects the spring market to be quite telling. That season is usually very hot and that could spark a surge in prices which could in turn inspire more people to put their homes up for sale. A possibility for sure, but it’s a lot of “coulds.”
Mituzas notes that homeowners sell their properties for so many different reasons, and that one of the key factors driving the market now is whether or not people can sell their home at a what they think it a fair value – something that’s awfully sticky for a lot of people who bought their homes during the housing bubble days of the mid-2000ds.
“It depends a lot on when people have purchased their homes,” Mituzas said. “Some people will stay put a little bit longer to sell.”
He said this trend favors the upgrader more than the homeowner looking to downsize.
Even if someone is selling their home at a discount – say 10 percent less then they paid for it in 2005 – they can still come out ahead by upgrading.
For example, a home bought for $200,000 eight years ago might only sell for $190,000 today; however, that person can expand into a larger home valued at $300,000 in 2005 – and get it for $270,000 today. It’s the same percentage discount, Mituzas says, but this trade would give a net gain $10,000 of value (granted it’s 2005 value) to the upgrader.
That model works in reverse for someone looking to downsize, and that’s part of what is keeping the inventory so low: they can’t buy something smaller if they can’t sell their current house in the first place.