A Thaw in the Housing Market

WHEN it comes to home sales in Westchester, spring seems to be arriving earlier than usual this year, according to brokers and others who monitor the residential real estate market.

After a November and December that were more sluggish than usual, phones are jangling again in real estate offices throughout the county and attendance at open houses is swelling, they report.

Usually, the spring selling season doesn’t start to warm up until mid-March, and its early arrival this year may indicate that an upswing in the market is finally under way, according to Greg Rand, a managing partner for Prudential Rand in White Plains, and other brokers.

This does not indicate that residential sales prices will be climbing, however; on the contrary, median sales prices may drop even further before stabilizing, Mr. Rand cautioned.

For the first time in an October-December quarter since 1994, when the Westchester-Putnam Multiple Listing Service began reporting statistics on a quarterly basis, the median price for a single-family home in Westchester dropped from the same quarter a year earlier. The median as of Dec. 31 was $630,000, down 3.4 percent from $652,250 at the end of the fourth quarter of 2005.

In addition, the number of sales for all residential properties in Westchester dropped 13.6 percent, to 2,077, in the fourth quarter of 2006, and the dollar volume of sales was down by 12.7 percent, to $1.315 billion, compared with the fourth quarter of 2005.

The median will probably be even lower at the end of the first quarter on March 31 — perhaps by as much as another 3 to 5 percent, Mr. Rand said, based on his tracking of sales so far this year.

These sales numbers, which at first glance could be seen as bad news, may actually be signs of a market that is finally growing healthier in Westchester, one of the most expensive counties in the United States, observed Joseph Houlihan, an owner of Houlihan & O’Malley Real Estate Services in Bronxville.

A continued decrease in the median sales price may be a dose of reality in what has been an inflated and one-sided market, he said. “There was a growing gap between what sellers wanted and buyers were willing to pay,” Mr. Houlihan said. “Now, though, it seems sellers are becoming more realistic and that gap may be closing.”

As an example, he cited the case of a three-bedroom, two-bath split level house in Eastchester that went on the market for $669,000 and sold within three weeks because it was priced in line with what comparable houses in the neighborhood were going for.

By comparison, Mr. Houlihan said, several of his agency’s listings that buyers perceived as overpriced have languished on the market, and some sellers have even taken them off the market altogether hoping that prices will soar again soon.

But many professionals believe that a resurgence in sales prices is not likely to happen in the short run. At the offices of the Westchester County Board of Realtors and the Westchester Putnam Multiple Listing Service in downtown White Plains, P. Gilbert Mercurio, chief executive of the Board of Realtors, said one reason for the recent slowdown was that “prices had overshot their mark” in recent years.

In addition to the increased realism on the part of sellers, Mr. Houlihan said, there were other factors causing an early flurry of activity in the market — notably, the handsome bonuses being handed out on Wall Street. “And even if they’re not actually buying yet,” he said of the current crop of house hunters, “there’s definitely a lot more looking going on.”

Linda Roth, the manager of Coldwell Banker Residential Brokerage’s Scarsdale office, cited a seven-bedroom newly built $4.5 million Tudor with lots of high-end extras on Carstensen Road in Scarsdale as “just the kind of house that Realtors are hoping will draw Wall Street financial types with bonus money in hand.”

But even investment professionals are exhibiting considerable caution, according to Cynthia Landis, a vice president and brokerage manager in Larchmont for Sotheby’s International. “There’s definitely bonus money out there,” she said, “but people are being very cagey when it comes to talking about it.”

Mr. Mercurio agreed that the county “is very dependent on what happens in New York City,” but he saw other factors in Manhattan that may also have contributed to the increased activity so early in the season.

“Even during the slowdown, about 24 percent of all single-family home sales in 2006 were in the $1-million-plus range,” he noted. “Westchester’s high-end market has always shown strength.”

He speculated that the thriving condo market and lower-than-average unemployment rates in Manhattan were enabling some owners there to sell and begin their search for homes in the suburbs.

The relatively broad selection of properties on the market is also playing a key role in the pickup in activity, said Mr. Rand, whose company has 21 offices, including seven in Westchester.

Westchester’s year-end inventory of 5,774 units in all categories was 21 percent higher than at the end of 2005, according to the latest report from the Board of Realtors. The current levels of inventory are comparable to those of the mid-1990’s, “which supported high-performing markets at the time,” the report said.

The largest choice of inventory is occurring in the condo market — “everything from new luxury units to ordinary duplexes and 20- to 30-year-old construction,” Mr. Mercurio said.

The condo market has fared better than the markets for single-family homes, co-ops and two to five-family homes, with the number of condo sales in October through December down only 4.2 percent, to 345, from the same quarter in 2005.

By comparison, sales for single-family homes were down 14.8 percent, to 1,121; co-op sales dropped 14.8 percent, to 437; and multifamily home sales slid 19.1 percent, to 174.

In addition, mortgage interest rates are expected to remain relatively stable, acting as a further lure for buyers, said Joseph Tringali, a banker with the Melville-based Capstar Mortgage Bankers, which has an office in New Rochelle.

“We’ve seen an upward trend in rates, but historically they’re still low,” he said.

Still, there is a concern about possible defaults among a group of people who took out adjustable rate mortgages two years ago and who also borrowed 100 percent of the purchase price of their house, Mr. Tringali said. A house that was purchased for $500,000 then, for example, might be worth less now, and the mortgage rates might be due to be adjusted upward.

Meanwhile, whatever the reason or combination of reasons, the Westchester market seems to “have finally passed through the low point,” Mr. Mercurio said, and appears to be moving ahead.

By ELSA BRENNER