After posting a 20 percent decline in the first quarter of 2018, Westchester’s luxury residential real estate market is showing glimmers of recovery.
According to the Houlihan Lawrence Luxury Market Report released earlier this month, luxury sales in the county are down 7 percent year-to-date from 2017. However, in Q2, sales kept pace with the same period last year.
Marked by a rich variety of architectural styles, expansive lot sizes, and proximity to Hudson and Sound Shore coastlines, Westchester’s upscale real estate market defines “luxury” homes as properties at price points of $2 million and above.
Ultra-Luxury Leads the Way
Performing better than it has in years, the “ultra-luxury” market (defined as $5 million and up) is currently outperforming the “lower end” of the luxury market. Through June 30, there were a total of 21 closed and pending sales over $5 million, compared to 19 sales in 2016 and 18 sales in 2017.
Assuming the pending sales close as expected this year, 2018 is on track to surpass 2016 and 2017 in this surprisingly strong market segment. Significantly, the number of $10 million-plus homes sales have spiked this year. With two closed sales and three pending, this represents a striking increase from 2016 and 2017, when only one $10 million-plus sale closed each year.
Interestingly, according to Houlihan Lawrence, Greenwich experienced a similar pattern in 2017. There, the number of homes sold for over $10 million in 2017 doubled over the prior year (eight homes sold in 2017 vs. four in 2016). At mid-year, seven homes sold over $10 million. Now, Q3 sales activity will determine if 2018 exceeds or falls short of last year’s exceptional performance.
Deconstructing the Luxury Buyer
The ultra-luxury segment momentum, notes Houlihan Lawrence, is evidence that buyers are resurfacing. Their behavior is marked by a combination of right-brain and left-brain decision-making.
In sum, a property’s location, lifestyle and quality may appeal to their emotions. While this is important, it’s often not enough to result in an offer. But if the buyer’s left-side of the brain can also rationally identify value and justify the purchase price, they’re more likely to confidently move forward.
Winning (Buyers’) Hearts and Minds
With these dynamics in play, and because there’s ample competition in the luxury market, Houlihan Lawrence advises sellers to appeal to buyers’ hearts and minds. To do this, they suggest positioning your home to entice a buyer is equally as important as pricing your home realistically.