The current housing market in our country has many economic experts scratching their heads. Multiple factors are at play — interest rates, pandemic aftermath, economic uncertainty — creating a unique set of circumstances. In Westchester County, a very particular market, the picture is less confusing, even if the data defies conventional wisdom.
The main driver has not changed. Buyers are still highly motivated to move here. The question is, can they find something to buy? We asked a group of top Westchester realtors to share their insights into the current housing market. Their opinions form a basic consensus, with some slight variation; it seems one person’s frozen market is another’s golden handcuffs.
Let’s start by talking about the Westchester County housing market overall. What’s happening out there?
Craig Dececchis, The Corcoran Group: As long as New York City prices are high, in terms of for-sale product and rental product, the population is going to push into the city’s best suburb, which is Westchester. There is going to be constant demand here. The real estate market may be softening in other parts of the country, but we haven’t seen that here. Anything under a million or $1.25 million is really competitive. Properties are selling after a day on the market and there are a dozen bids.
Heather Harrison, the Zach + Heather Harrison Team, Compass: It’s been a great season. Sellers have been very happy with the prices they are getting. There have been bidding wars at almost every level of the market, with homes selling between 10% and even sometimes up to 15% over the asking price. But inventory remains very tight. A lot of people are still leaving the city — not as many as during COVID, but there has been a continual wave of buyers looking for the great quality of life we offer here.
Let’s focus a bit more on inventory. What’s behind the lack thereof?
Dececchis: The pandemic sped up life changes for people in terms of real estate. What might have happened over the course of 10 to 15 years probably happened over the course of two. People who wanted to leave the state or those in the city who wanted to come to the suburbs — that just sped it all up.
“There have been bidding wars at almost every level of the market, with homes selling between 10% and even sometimes up to 15% over the asking price. But inventory remains very tight.”
Heather Harrison
Zach Harrison, the Zach + Heather Harrison Team, Compass: Local zoning also plays a part in the low inventory picture. Developers can’t build 100 homes in places like Scarsdale or Rye. Constrained inventory has kept prices high, resulting in plenty of bidding wars, especially on turnkey properties.
Dececchis: There is really very little available land in Westchester for building single-family houses, and that’s been going on for the last 15 to 20 years. And higher interest rates have, in effect, frozen the market, which is [happening] across the country. Potential sellers with mortgages don’t want to give up the low mortgage rates.
So, interest rates are deterring potential sellers from putting their homes on the market. How are buyers reacting?
Zack Harrison: During the peak “free money” or “low-interest-rate money” era, we had a listing with 75 showings in the first 48 hours resulting in 20 offers. That was in January 2021. No doubt, higher mortgage rates have caused some buyers to become more cautious, although demand remains high. We were seeing 20 buyers in bidding wars, but now perhaps it’s 10.
Heather Harrison: For a lot of younger buyers, a 7% rate is the new normal. They’re not used to having the 2% or 3% rate, so it’s not holding them back as much. That said, we remind buyers to “date the rate, marry the house.” When the right house comes on the market, you might not be ready, but it might be “the one.” You can always renegotiate the rate later. Also, if you think bidding wars are bad now, they are only going to get a lot worse when the rates go down.
Wendy Alper, Julia B. Fee, Sotheby’s International Realty: Today’s consumers are beyond educated. There are so many websites where they can look up houses [and] compare apples and oranges, see pictures, floorplans, square footage. They know what properties are worth and don’t want to overpay unless they are desperate. It’s very important to price towards value, and then you get bid up due to the lack of inventory. Let the market speak.
Brendon Desimone, Houlihan Lawrence: There is still strong demand, but the deals are a little bit harder now. Buyers aren’t just “taking it.” They are being very cautious, coming back after inspection, renegotiating to have things fixed — it’s not a total cake-walk for sellers like during COVID [when] people would buy anything. A home should be presented well. Good location matters more than ever, price matters more than ever. Good condition, good location, good price — all three should match up.
Within the climate of high demand, has there been a shift in what people are looking for, what’s hot?
Desimone: Areas that were harder to sell before COVID are not as hard now because people are working from home permanently, or at least for a couple of days a week. The market is not so tied to the commute. It used to be that people didn’t want big houses, far from the trains, and now they don’t mind having a bit of space, being farther out, because they aren’t stuck in the same daily routine.
“Today’s consumers are beyond educated. They know what properties are worth and don’t want to overpay unless they are desperate.”
Wendy Alper
“Buyers who are winning good houses today really understand the market. They understand relative value.”
Craig Dececchis
Dececchis: Right now, we’re in the process of helping clients from Brooklyn move to Cortlandt Manor. They have to be in the city two days a week. The tradeoff is acceptable — they are happier with a lower relative purchase price, more land, more fresh air. Yes, some people do need to commute every day, and those people are going to stick to southern Westchester, which will probably always be competitive because of that. But the market is a bit more balanced now.
Alper: Before the pandemic, people wanted three blades of grass, to be close as possible to town and to the train. Those houses are lovely, and people still want them, but the demand is just not what it used to be. Now people want the beautiful flat backyard and the swimming pool. People want a compound for the family with one or two offices. These things have become more important than the commute. They are sacrificing that for a better home-based setup.
Heather Harrison: People want move-in ready. That said, while walk-to-train was a bit less popular during COVID, those properties still demand a higher price per square foot. People were looking for places further north during the pandemic, but I am starting to [see] a shift back now. New buyers are asking about proximity to the train, now that they are going back to the office. Those homes are selling quite rapidly.
Any additional advice to buyers in a tight market?
Alper: The best approach for buyers is to stay completely connected, to have a “hotline” with their agent right now, to be ready to go as soon as something hits the market. If it’s “your house” be prepared to make a really strong offer, with great terms. Cash is king — every seller loves a cash offer — but you don’t have to be all cash. If you could put more money down, [that] makes your offer stronger — say, 50% cash instead of 20%.
Dececchis: Buyers who are winning good houses today really understand the market. They understand relative value. They understand comps. They understand that the asking price might not really represent the value of a home, the price might be worth more.
Desimone: We’re seeing people with one big plan of what they want, but once they get into the market, start bidding, and maybe lose a house or two, they realize they might have to settle, maybe change towns, go a bit farther north, be willing to do a bit of work to a bedroom or bathroom. My advice: If location is really important, try to buy something there that isn’t so competitive, a home that needs a little work. Location stays forever, but you can change the look and feel of the house. Houses that need a bit of work sell for a bit less than the houses everybody wants — the Instagram-ready with everything “done, done, done.” With more sought-after properties, you must get your offer in in a couple of days, you have to get the inspection, sign a contract so fast … it’s a very stressful way to buy real estate.
Seller’s taking advantage of the seller’s market need a place to live. Where are they going?
Dececchis: Clients are maximizing the value of their homes, getting great sale prices. Then they are getting creative with what they are buying: Maybe they are moving into an apartment or a townhome or buying an older home and renovating it, and even after doing all that work, [they] still have a nice pile of cash from their home’s sale. But it takes creativity. Those sellers are really being rewarded right now.
Heather Harrison: This has been a very big challenge. For example, a house in White Plains that has low taxes [and] primary bedroom on first floor: The sellers had multiple bids in 24 hours — there is so much demand for that type of property. That’s kind of what all our empty nesters want, but it’s competitive. A lot of sellers are leaving, less so to Florida than a few years ago. Many people are trying to find alternatives and moving to areas in Connecticut, places such as Madison, on the water.
We’ve also been highlighting the different options here such as townhome communities, condo complexes, and senior living, such as the Waterstone of Westchester and Broadview in Purchase.
Desimone: A lot of people are going out to second homes — those are the best sellers. But if you have nowhere to go, if you are trying to buy and sell at the same time, it’s hard. If you put your house on the market, do you buy first? Can you afford to close on the purchase without selling your house? Am I going to rent for a while? That’s complicated — you’re “moving” twice. I don’t want to discourage people, but it takes a lot of emotional, financial, and physical strain.
So, what’s to be done about the inventory shortage, if anything?
Dececchis: A lot of the “new” inventory is coming from smaller homes that are older; home builders are going in and fixing them up or they are expanding them. These rebuilt houses are bigger, “newer,” and more appealing to buyers. Of course, you must wait for these houses to become available. There’s development of new apartment buildings, particularly in the cities — White Plains, New Rochelle, Port Chester, Yonkers. That’s been going on for the last 10 to 15 years, but the pace of that has picked up. It solves a problem for those who don’t require a house but want an alternative to New York City. They are comfortable in an apartment, they like the amenities, the conveniences. But it’s not solving the single-family home crunch.
“If you put your house on the market, do you buy first? Can you afford to close on the purchase without selling your house? Am I going to rent for a while? That’s complicated — you’re “moving” twice.”
Brendon Desimone
Predictions for the future?
Alper: I don’t have a crystal ball, so I don’t know exactly where we are heading. However, the real estate market is tied to what’s going on in politics, Wall Street bonuses, and interest rates.
Dececchis: My prediction is that we are going to continue to see the underutilized areas of Westchester continue to be improved, from Yonkers to Peekskill, the Rivertowns. The older industrial areas will get rezoned, more housing will be added there, older communities will continue to be fixed up, and, in the longer term, more vertical housing, more condos to add to inventory.
Related: Multifamily Housing Is Set to Experience a Boom in Westchester
