314 Depew Street in Peekskill, NY. (Lorenzo Ciniglio/Freelance)
The recession has been good to those coveting a house in the suburbs.
Take Michael Sellers, a 48-year-old communications executive who in 2005 bought a 1,000-square-foot starter home with his partner, Robb Bruce, in Peekskill. While the pair fixed up and enjoyed living in their cozy house, they salivated over a larger 1920s Arts-and-Crafts house nearby, along Depew Park.
“We’d see the house every Saturday on our way to Home Depot and say to each other, ‘One day,’ ” Sellers recalls.
That day finally arrived last month, when Sellers and his partner snapped up their 1,700-square-foot, four-bedroom dream house with lots of original details for $335,000 — $40,000 off the asking price. At the peak of the market, just a few years ago, the house sold for $450,000.
It’s just one of the many deals to be found in Westchester County, where housing prices have fallen sharply since 2007 and many homes are more than 20 percent off their peak prices. These price corrections affect the entire market — from low-end $400,000 houses to million-dollar mansions.
And while the median single-family house price in Westchester has been improving (in 2010, it was $630,000, up 8.6 percent from 2009) and sales have picked up (the area’s 4,017 house sales represented a 20 percent increase over 2009’s sales and 5 percent over 2008), don’t be fooled by the numbers.
In fact, the 2010 data is the tale of two halves. In the first half of the year, sales increases were boosted by the first-time homeowners’ tax credit. The closing deadline for that tax credit was Sept. 30. Fourth-quarter house sales dropped 18 percent compared to the fourth quarter of 2009.
As for prices, the median sales price for a Westchester single-family house was a record $730,000 in the third quarter of 2007. That median price dropped to $532,000 in the first quarter of 2009. Then prices increased through the third quarter of 2010, when, surprisingly, a new record median of $730,250 was seen.
How to explain the roller coaster?
“The numbers are distorted,” says Robert Kesten, a sales agent for Vincent & Whittemore in Bedford. “Higher-priced properties have fared better in terms of sales volume than lower-priced properties, and that has elevated the overall median price.”
Million-dollar home sales were strong in 2010 because the stock market rebounded and Wall Streeters took home big bonuses again. Sales of high-end, $1 million-and-up properties accounted for 23 percent of total sales in 2008, then fell to a 17 percent share in 2009. They rebounded in 2010, up to 28 percent.
But here’s the rub: Prices are still flat or falling across all sectors — including million-dollar properties — despite renewed job confidence and low mortgage rates.
The culprit? Too much inventory. There are more than 3,000 single-family Westchester houses currently on the market.
Mark Seiden, broker/owner of Mark Seiden Real Estate in Briarcliff Manor, cites a property he sold in August: a 5,100-square-foot, four-bedroom 1995 house on an acre in Briarcliff Manor for $1.4 million.
“Today, the house would sell for $1.3 million — another 4 to 5 percent less — because we have too much inventory and not enough buyers,” says Seiden.
In 2003, the house sold for $1.9 million.
Foreclosures, short sales and the challenge of securing mortgages are also holding down prices. But for some, market conditions couldn’t be better.
Shannon Cohen, her husband, four children and two dogs were bursting out of their 2,400-square-foot split-Ranch in Bedford Village. The couple didn’t want to leave the neighborhood or uproot their children’s lives.
The Cohens wanted a bigger house in the same town; in fact, they lusted after a particular house for nearly four years. But they couldn’t afford the 7,000-square-foot, six-bedroom, seven-bathroom Arts-and-Crafts style house set on 4 acres.
Until March of last year, that is, when they bought it for $2.4 million — down 20 percent from its 2007 selling price.
“I feel like we got a fair deal,” says Cohen, who says she’s thrilled with all the space, the beautiful views, the vegetable garden and the lawn with room for a swing set and sandbox.
And though the Cohens were able to pick up the new home for less, they also had to contend with selling theirs for less than they had expected, too. They got $600,000 for their Ranch home — they’d paid $570,000 for it in 2004.
“Prices will be very flat over the next couple of years,” says J. Philip Faranda, a broker who publishes westchesterrealestateblog.net. “Buyers and sellers alike are still trying to adjust to the new normal.”