“In White Plains, we put an offer on a house just under $1 million with a list price of $800,000 and received a generic notification the offer was denied,” says James Mulvey of Houlihan Lawrence. “We didn’t even receive a call back. Six years ago, that would have been considered a high offer.”
Despite interest rates soaring over 7%, warnings of an economic recession, and inventory nearly extinct, frustrated buyers are still having to contend with waiving contingencies, offering their highest and best price, and still being denied purchase. “Obviously, the housing supply across all price points is extremely low so the challenge is to keep the demand of the inventory competitive,” Mulvey says.
The seller’s market in Westchester County has not only proven disappointing for many homebuyers but also discouraging for real estate agents as well. “We had a cash buyer for a home in New Rochelle with an offer close to $1 million and then the seller said they had someone else after nine months,” says Glorianne Mattesi of Douglas Elliman Real Estate. “I sold double the number of homes during COVID, so it has been an adjustment on our side as well. I am hoping by February there will be a new set of sellers ready to make a move.”
While real estate agents remain hopeful, data suggest no huge changes are in the forecast for 2024. According to the Hudson Gateway Association of REALTORS (HGAR), total inventory for the second quarter of 2023 was down in Westchester by 31.4% compared to last year. The report also noted residential sales have decreased substantially from 2022 with Westchester and Sullivan counties seeing the largest sales volume declines at 26.8% and 26.9%, respectively.
“What I’ve seen as a trend in 2023 vs. previous years is that 20% down with 80% financing is just not enough to win a bid,” says Melissa Colabella of William Pitt – Julia B. Fee Sotheby’s International Realty. “Unless rates go down significantly, I don’t see this changing in 2024. For those who need a house, I suggest searching under budget so that you can be cash competitive.”
While buyer demand has caused housing prices to soar, for sellers, the resounding question remains: If you sell high and get a great price, where will you go? Many homeowners who sold high during the pandemic decided to rent and wait out the market but are still renting today.
“It’s a seller’s market as there is not enough inventory for the demand,” says Daniel M. Berger, broker/owner of RE/MAX Prestige Properties in White Plains. “Houses that are priced appropriately go quickly. Prices have risen as many agents are pricing homes on the higher side because they can get the high price. Certain markets have been insanely ridiculous like White Plains and Harrison because taxes there are more reasonable. Those two areas have gone up more than anywhere else. A house in the $600-800K range in lower Westchester is hard to come by.”
Buyer fatigue has also triggered an increase in offers as much as $200,000 over asking. Despite the high interest rate, they are optimistic that they can eventually refinance at a lower rate.
For a competitive advantage, buyers are offering all-cash deals and putting as much cash down as they can afford to. “Post COVID we saw an all-cash market push out mortgaged buyers entirely and this has subsided a bit,” Colabella says. “High end is often purchased in cash, and lower priced co-ops can still be purchased with the minimum amount down.”
“The housing supply across all price points is extremely low so the challenge is to keep the demand of the inventory competitive.”
—James Mulvey
Mattesi says she has seen big jumps over list in Larchmont. “In Yorktown, bidding has been $100,000 over asking,” she says. “The market continues to also be very strong in Chappaqua.”
Despite coming into an election year, which often brings added risks, ultimately, people still need a home. “One thing that will make the market more reasonable is when a foreclosed home comes on the market,” Berger says. “They might not be livable, but flippers will buy them, put the money in and then put them back on the market.”
For now, the frustration continues. “There was a 1,400-square-foot home that needed to be gutted and my client bid nearly 15 percent over ask, and we were told we were fourth in line out of nine offers,” says Deena Weinhouse of Compass.
As for the look ahead into 2024? “We are still getting more buyer calls than calls from sellers, so it looks like it will be great to be a seller and tough to be a buyer in Westchester for some time,” says Weinhouse.
