Well, it’s 2022, the spring market has ‘sprung’ and we are already seeing and hearing of multiple bidding everywhere. So many clients are asking me about the market and should they purchase a home now. The last 2 years has brought forth wonderful sales prices for the homeowners based on (unfortunately) a smaller inventory perhaps due to Covid 19 with buyers escaping the city, but will it continue? In representing buyers, their questions are obviously will the inventory be larger this year? Will they ever be able to obtain a bargain or are they long gone? It is costing far more to have a new home built based on the lack of building materials. Sellers have been reluctant to sell their home for where will they go when home prices are high everywhere in the United States. It should be noted however that there were more single family homes sold in 2021 in the Larchmont area than in 2020 (267 – 221), and in New Rochelle also (469-421). However, even though there were more homes entering the market, there was not enough for those seeking to purchase, hence our calling it a low inventory when perhaps we should just be calling it a low ‘standing’ inventory as the homes did not sit that long on the market.
As an aside, our office out performed the market in both Larchmont and New Rochelle.. While the average median sales price was $1,498,425 in Larchmont for single family homes,our median sales price was $1,600,000 with a 07 % sales price to list price ratio compared to the market list price to sales price ratio of 104%. Accordingly, our office median sales price in New Rochelle for single family homes was $937,000 compared to $801,000, and we had a sales price to list price ratio of 104 compared to 101%.
So lets discuss the market.
It’s no suprise that it all goes back to current market conditions and value. I always advise my clients to seek a home in the location of their choice, the size is obviously important, land also, and schools which goes back to the location! Taxes can play a larger part in the decision making also. Many times, clients look at their pre-approval,and don’t realize that there is tax factor in that pre-approval. Some towns like Bronxville, Larchmont, Scarsdale, Mamaroneck, Rye Town, Ossining, Greenburgh, North Salem and Putnam County maintain thir rolls at 100% of value which means the taxes will increase based on the home sales price should that home be assessed at a lower value.
It should be noted that the Town of Rye Tax Office serves the Villages of Port Chester, Rye Brook and the Rye Neck Section of the Village of Mamaroneck as well as the Port Chester, Blind Brook and Rye Neck School Districts.New Rochelle doesn’t increase the property taxes if a home is sold for more than the assessed value. This is to the home buyers’ advantage for if they pay less than a home is being assessed at, they can grieve that differential. This grievance takes place on June 1st each year and home owners can file for that grievance up until the third Tuesday of June of that year. Many buyers who are facing high tuition rates in the city for their children aren’t offset by the seemingly high taxes in Westchester as they still save money on having their children attend the local schools here.
I think that no one wants to overpay and would like to feel that the the value will increase in any home they might purchase. In truth, when there was a decline in the economy and the housing market tanked in 2006/2007 (it took longer to hit the Larchmont area), home prices did drop and there were some disappointed sellers who had purchased at a higher premium, and they lost money when they tried to sell their home a few years later.
Case-Shiller National Index up 18.8% Year-over-year in November (substack.com)
Renovations are also important. When a home is purchased and was just totally renovated prior to sale then once again, we would like to feel that value would remain for years to come. However, if the home was renovated 10 years prior, and then sold at a premium, then it would stand to reason that the value would not quite be the same 10 years later than that fully newly renovated home was. As a home gets older so do the renovations. So, if you are purchasing a home that was renovated 10 years ago but looks great, and you go to sell it in 10 years, those renovations are then 20 years old and if you paid a higher price in today’s market – then how would those renovations reflect in tomorrow’s market. Meaning, will the real estate market increase accordingly to offset the older renovations? None of us knows what will be.
We do know that the interest rates are expected to increase 3 times this year commencing in March. However, per Veronica (a great mortgage lending advisor):
The average Mortgage Interest Rate on the 30 year fixed for the past 50 years is 8% (APR 8.1000%)The average 30 year fixed today is approximately at 3.375% (APR 3.3750%). On a loan amount of $900,000 the monthly would be $4004The average 30 year fixed for the past 2 years has been 2.875% (APR 2.8750%). On a loan amount of $900,000 the monthly would be $3762As you can see, the difference monthly is $242.
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Veronica Finkel | Sr. Home Lending Advisor CPC | NMLS ID 62262 | Home Lending| Chase | 608 Columbus Ave., Thornwood, NY 10594 | Office: 914-769-4128 | Cell: 914-420-7875 | Fax: 877-891-5572 | veronica.finkel@chase.com | http://homeloan.chase.com/veronica.finkel
Please note: Interest rates, points and APR quoted are subject to change based upon credit score, loan-to-value and other factors.
Accordingly, buying is more advantageous than renting:
The 2022 Rental Affordability Report says:
“. . . Owning a median-priced home is more affordable than the average rent on a three-bedroom property in 666, or 58 percent, of the 1,154 U.S. counties analyzed for the report. That means major home ownership expenses consume a smaller portion of average local wages than renting.”
Other experts in the industry offer additional perspectives on renting today. In the latest Single-Family Rent Index from CoreLogic, single-family rent saw the fastest year-over-year growth in over 16 years when comparing data for November each year
What advice can I offer to both buyers and sellers?
Sellers if thinking of selling, keep the repairs up to-date, declutter (so many of us have that same problem as it is so hard saying good-bye to our ‘stuff!), and keep up todate with market trends if you are thinking of renovating such as painting, updating a bathroom etc. Those brightly colored walls might be fun, but try to see your home as through a buyer’s eyes where a soft palette is more inviting. A great site to contact if you wish to donate unwanted items is Charitable Donations | GreenDrop (gogreendrop.com). You have a choice of selecting out of 4 charities which one you would like to benefit.
Trim the trees! Power wash! That truly makes such a difference. Plant flowers in the spring and have tubs of pretty flowers in front of your home. If you are contemplating selling your home the following spring (which starts the end of January/early February) then ask your Realtor (hopefully me!) to have photos taken the fall before when everything is in bloom!
If your taxes are high, then think to grieve your taxes well before you decide to sell a home. A tax assessor will not look too kindly on a homeowner lowering his/her taxes only to place their home onto the market at a much higher price!
Market Reviews! I LOVE market reviews – it is a great way of staying in touch with what has sold in your immediate area. Contact me!
Buyers: Travel around the different areas, towns, interview schools where possible or ask your Realtor for names of parents who can speak about the local schools. This will help you be more prepared when you are truly seeking to purchase a home as you are already looking in a specific area. I have had buyers who were looking in 10 different towns, then wanting only one, only to discover they really wanted another and had already missed out on several homes in those other areas. If you target an area, then you can see all of the homes as they enter the market, you are able to get a true idea of what is available, and you will feel more comfortable when placing that bid.
If there is multiple bidding in the area, then consider obtaining a priority pre-approval which basically approves you for a loan amount, and the loan is only then contingent upon the address, appraisal and Clear Title, etc. It would enable you to bid with a no mortgage contingency with peace of mind.
I have met buyers who first need to sell their homes in order to obtain the down payment. A cash out refinance might be a way of overcoming that hurdle. Research well first though to make sure it is the right avenue for you as you would not only have the closing cost in refinancing but also the additional closing costs in your home purchase.
–Cash-Out Refinance: Option for Homeowners, Explained (marketrealist.com)
Your Realtor can assist with sending to you information regarding insurance, pre-school programs, fine dining, local activities and travel options. In short, it is our pleasure to assist the buyer and seller to make any transaction as seamless as possible.
Please call me for you real estate needs.
Gay
Westchester is GREAT!
