Forget the fact that I’m busy. Forget the fact that we are seeing multiple offers far more frequently. Never mind that we have more buyers looking, more sales pending, and more offers being made. Ignore the 5 new construction listings the company now carries, which is an all-time high. Those are all anecdotal examples of the market stabilizing. The real good news lies in the statistical data: more homes are selling for more money than they were a year ago, and not by a little. According to the Hudson Gateway Multiple Listing Service data for single family homes, January 2013 was far healthier than January 2012.

How much better? I’m glad you asked.

For the first month of 2013, 256 single family homes closed, up from 219 a year ago. That is an improvement of  17%.
Median price for those homes sold in 2013 was $522,500, up from $485,000 in January 2012. That is a 7.7% rise in median price.

There are still too many distressed homes, upside down mortgages, short sales and shadow inventory to be dancing in the streets.

But there is no longer any blood in the streets.

Amen.

#Precovery

New Construction for $674,914. New Starts are another positive sign.

More homes sold because prices same 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.

I’ll summarize the first half of the 2012 Westchester real estate market for you in one sentence: More people are buying single family houses and they are paying lower prices. According to the Hudson Gateway Multiple Listing Service, we had the most June closed transactions for a non-tax stimulus market since 2007, but the median price was almost $50,000 less than last June.

For June 2012, there were 501 closed sales at a median price of $660,000.
For June 2011, there  were 436 closed sales at a median price of $709,625.

For the 2nd quarter of 2012 that just ended, 1156 sales closed at a median price of $620,000.
For the 2nd quarter of 2011, 993 sales closed at a median price of $620,000.

The year to date sales totals show 1889 closed sales at a median price of $575,000.
The first half of 2011 had 1715 closed transactions at a median price of $592,450.

1369 homes are under contract at a median asking price of $625,000. 1369 pending deals is a mammoth number, almost twice the number of pending transactions 6 months ago. That speaks to the busy season more than an overall trend, and I unfortunately didn’t chronicle that stat from a year ago (kicking myself for that).  Available inventory is 3997 available homes, down 253 from last month. Inventory is shrinking, which actually gives sellers leverage. When buyers have fewer options, it forces them to play ball with the seller rather than move on.

In my personal observations,  more buyers are out there making deals. Overall they are as cautious as ever: the New Normal gave us more 2nd and 3rd visits with parents and contractor friends, laundry lists of questions, and more thorough due diligence-no changes there. But the scale has tipped on buyers following through this year more than in years past. One of the common themes of the New Normal was virtual paralysis with buyers-indeed, they weren’t buyers at all in many cases, just lookers. We’d show buyers dozens of homes, only to have them give up, or walk from deals if a problem or disagreement arose. Now buyers are sticking with it more. It’s not surprising. You can’t put life off in perpetuity. People want to get on with their goals- family, children, roots, and putting things off a year or two might be ok, but not five.

It isn’t just the buyers. Sellers are getting more realistic. Banks are not resisting short sales the way they did in 2009 and 2010. Pragmatism, absent or mathematically impossible in years past, is prevailing.

We will, absent another crisis, see a slow steady crawl of flat values and modest transaction gains going forward with a few additional caveats:

• Banks will have to manage their inventory of foreclosed homes better than years past, meaning they cannot flood the market again and drive prices down.
• The mortgage market will have to continue to ease up on unrealistic underwriting that prevents qualified borrowers from being able to get approvals.
• Government economic management will have to focus on what works.

The last point is crucial. The government can sabotage a recovery or referee it. Raising the FHA loan limit was smart. Proposing mandatory 20% down rules, as some politicians tried in the QRM debacle, was dumb. To see what I mean, consider June 2007 when the market was artificially affected by the $8,000 tax stimulus. Westchester saw 634 homes close that month, far more than this past June. But after the stimulus ended, the market was dead. In the end, it made no difference.

Overall, we are looking at a better 2012 than 2011, which is the first organic (non government stimulus) uptick Westchester has seen in a very long time.

If I were not seeing it with my own eyes I would not believe it. But after witnessing bidding wars on 2 of my own listings, one in Ossining and another in West Harrison, I have to say that the Spring real estate market in Westchester is stronger than I expected. It might be the pent up demand after 4 years of malaise, low rates, the simple societal adjustment to the new normal, or all of the above. But April’s numbers did show an undeniable improvement in a variety of ways.

In total, for April, 2012, there were 283 single family homes sales closed in Westchester at a median price of $550,000.
In the same period of 2011, there were 249 closings at a median of $535,000.

That is just under a 14% improvement in transaction totals and a 2.8% rise in median price.

Year to date, the numbers are almost as encouraging.

In the first 5 months of 2012, Westchester had 1014 closings at a median price of $521,250.
In the first 5 months of 2011, the county had only 971 closings at a median price of $550,000.

Median price is down slightly overall, but the public is buying more.

More good news: The number of homes under contract has spiked to 1239 properties under contract or pending sale, and the median asking price is $659,000. That makes sense; once the lower priced homes sell, “move up” buyers purchase more expensive homes. And that is what we are seeing. But even if we put the median price aside, the number of homes under contract is almost 300 deals more than last month. That tells me that April’s numbers were no anomaly, and that May could end up being an even stronger month.

Lastly, there are 4224 homes available in inventory, giving buyers a plethora of choices. That is still roughly 15 months of inventory. It remains a market slanted toward buyers, but a healthier market at that, and in rare cases, the sellers are starting to gain leverage. Time will tell if this strong Spring ushers in a recovery or is a temporary bump. Given the changes I see in buyer attitudes, we may see an uptick in consumer confidence and the seeds of a recovery.

Check out the available homes for yourself. Conditions may have finally hit the sweet spot where prices and buyer sensibilities have made a match.