Deeds and Leases

Given all the innuendo and rumours about the real estate market that are postulated today, I believe ”the facts” are the only appropriate way of discussing what is really going on. Anything else can be misleading. There is a good deal of fear out there, and the so-called experts sometimes make a difficult situation worse.  Now by no means am I minimizing the market statistics that appear below. They are not great, nevertheless there are a couple of points that do need to be discussed and considered.

Before I do that I need to discuss the data source. I extracted the following from the Westchester MLS, and I analyzed the first six months performance for 2009, and compared the results with the same period going back to 2005. The three most important markers for the evaluation of the health of a submarket such as the Bronxville PO are the number of sales; the median sale price; and the days on market. When examined as a whole they can tell us a good deal.

There is one other statistic that is important, especially when considering the immediate future. How much inventory is out there? In Westchester County as a whole inventory levels have been increasing. In the Bronxville PO the inventory as of June 30 was fairly modest, at 34 homes for sale. If we remove the homes listed for $1 million and up, there are only 24 homes on the market. This would indicate an absorption period (the time to sell all of the currently available homes) of approximately 18 months based on the current rate of sales. That is a long time, but it is a better performance than the coop market.

The Bronxville PO is a very desirable place to live (see www.bronxvillepo.com for a map of the area). Much of it was developed a century ago by the Lawrence family, who largely built the Village of Bronxville, and today much of it retains its country charm of lovely prewar homes and winding tree-shaded streets. Most of the “PO” is in easy walking distance to Bronxville Village, Sarah Lawrence College, shopping and mass transit. It is a wonderful easy commute into Manhattan by train.

The following chart illustrates the sales performanceof the Bronxville PO/Yonkers market for 2009 and back to 2005 for comparison purposes:

TOTAL # OF SALES

The total sales dropped 40% from 2008, and 59% from the results in 2007. Some of this is attributable from the very poor first quarter results, when the market as a whole was reeling.

MEDIAN SALE PRICE

While the median price dropped 7% from last year, it has dropped less than 2% since 2007, which is statistically insignificant. The smaller pool of sales this years can cause wide swings in median prices, hence this marker is somewhat less reliable.

DAYS ON MARKET (DOM)

DOM fared poorly, with a 21% increase since 2008, and a significant 60% increase since 2007. However there is a caveat here. DOM typically includes marketing time, as well as the time it takes for bank approval , title search etc until the deal is closed. This year the banks have been hit with a double whammy of  layoffs and an increase in business due to the massive amounts of refinancing when rates touched below 5%. As a result, it is taking longer, and in some cases much longer, for a ‘clean” deal to go through. Brokers have reported an extra 20-30 days for underwriting is not uncommon, so if you factor this into the DOM increase for 2009, the actual increase is far less severe.

COMMENTS

If we look at the big picture, what do these statistics tell us? On one hand there is a definite sharp decline in sales activity. At the same time, median prices appear to be relatively flat, and it is taking somewhat longer to sell. market inventory is high but not overbearing.

Fact is, prices are still too high. As a Broker it is painful to say that, yet with pricing relatively flat, and with few sales that are taking longer, that is the obvious conclusion. In this market people are looking for aggressive pricing. While buyer’s sometimes have unreasonable expectations, there is no question that they are focusing in on pricing more than ever. No matter how well presented, if the pricing is off, it will not sell. It is clear to me that lower pricing coupled with the still historically low interest rates, together with and some glimmers of hope in the economy as a whole, it is not hard for me to see the pent up demand that we all know is there rise to the surface once a better comfort level with pricing is reached.

There is an opportunity here for well priced, well presented homes to sell, even in this market. The seller needs to be on top of the market, and be willing to be flexible and respond to market conditions that suggest changes in the homwowners’ marketing strategy are needed.

BOTTOM LINE:

• Proper Pricing
• Proper Presentation
• Patience
• Flexibility

Those are the ingredients for a successful sale today.