Contributed by Dean Bender, Thompson & Bender for Houlihan Lawrence

Oct. 9, 2019:  Third quarter luxury sales posted gains or were level with last year in several markets north of NYC, including Westchester County (sales $2M and higher); Greenwich (sales $3M and higher); Darien (sales $2M and higher); and Putnam and Dutchess (sales $1M and higher). This encouraging news marks a reversal of declining homes sales the past several quarters in these areas. The third quarter results were announced today by Houlihan Lawrence.

Luxury sales increased because prices have fallen and buyers are transacting on compelling value propositions. Lower interest rates are not a causal factor but contribute to moving buyers off the sidelines and into the market.

In Westchester, the $3M to $4.99M price range accounted for most of the gains in third quarter sales. Nearly all closed properties in this price range were reduced from their original price – some had up to five reductions - and sold nearly 30% to 50% less than the original list price. Sales over $5M followed a similar pattern of coming on the market unrealistically high, and ultimately selling substantially below the original price.

Sellers have often (in hindsight) over-invested in their homes. If they purchased in the peak years or made costly improvements to their home - coupled with declining values in the recent past - they may take a loss when they sell. They have accepted that buyers’ assessment of value is not equal to their total investment. The financial loss is offset by the intangible gain of being able to move forward with future plans.

Darien is the strongest performer this quarter and the only market to show a gain in luxury sales year-to-date. The lower end of the market ($2 to $2.99M) is up by 25% year-to-date. As the market picks up in Darien, neighboring New Canaan is not recovering as quickly.

“Inventory levels remain high. When sales slowed down the past several quarters, new listings came to market at a steady pace and inventory accumulated. The imbalance of supply and demand continues to put pressure on pricing. Pending sales north of NYC are holding steady compared to the same period last year – a positive indicator that sellers are listening to the market and pricing realistically,” said Anthony Cutugno, Senior Vice President, Director of Private Brokerage.

Photo courtesy of Houlihan Lawrence

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