More homes sold because prices came down.
That would be one clear message in looking at the December sales figures for single family homes on the Hudson Gateway Multiple Listing Service in Westchester County. Transaction totals were their highest in six years with no special stimulus and buyer appear to be returning to the market in stronger numbers. Overall, 2012 was considerably busier than the prior year, and again posted the highest closing tally since 2007. There is reason for optimism looking forward to 2013.
The totals are as follows:
In December, 2012, 376 single family homes closed at a median price of $557,250.
In December, 2011, 278 single family homes closed at a median price of $542,900.
That is a gigantic 35% leap in transactions, and a modest 2.6% rise in median price for the month.
For the overall year of 2012, the totals were 4476 homes closed at a median price of $587,000.
For the year 2011, 3,842 single family homes closed at a median price of $600,000.
That is a 16.5% increase in closed sales and a 2.2% drop in median price for the year.
Median price is still down six figures from the peaks we saw in 2005 and 2006, and it could be a decade or more before we return to those values. However, that, along with the low rates and pent up demand of a stagnant market for over 5 years, is probably the very reason why more buyers performed in 2012 than so many years prior. With values at this level tens of thousands of homes in the county probably remain underwater. We are, therefore, a long way away from anything resembling a robust seller’s market. The numbers do point to the infancy of a recovery, or a “precovery” as I have written before.
Looking forward in the first quarter of 2013, we seem to be hitting the ground running. Inventory numbers show 2,469 active listings for sale at a median list price of $639,000. Of greater import is that 785 homes are under contract for purchase at a median list price of $585,000. While there is no doubt that the consumers are trending toward lower cost homes when given the choice (and who can blame them for being more cautious?), that is a strong number of pending deals at this point in the year a week removed from the holiday season (or a day, if you count Epiphany). What we are seeing is the market striking a balance between a decent number of choices for buyers but not enough to give them the leverage they possessed in weaker prior years.
If 2013 continues the pace I will talk of the R(ecovery) word. Until then, I’ll remain cautiously optimistic. The overall economic status is fragile, and as long as the government does not do anything stupid like repeal the mortgage interest deduction or end the debt relief act for short sales, we can go from crawling to walking again.