May 2022 Westchester Market Update

Rising mortgage rates, potential recession, and all-time high buyer demand??

Let's dive into these seemingly conflicting data points to understand the state of the Westchester housing market.

On April 21st, the average 30-year fixed mortgage hit 5.11%, the highest number in 13 years! This is a startling number and it impacts the buying power of every home buyer out there utilizing financing. However, April data shows a continuation of the strong market we've seen for months.

In the Eastchester school district, the median sale price for single family homes reached $820,000 compared to $753,000 in April of last year. And the Days on Market dropped to 22 from 31 days this time last year.

In the Scarsdale school district, the median sale price hit $1.84M compared to $1.6M last year. Days on market dropped to a shocking 16 compared to 36 days last year.

An in New Rochelle, median sale price hit $830,000 compared to $750,000 this time last year. Similarly, days on market dropped to 22 from 31 last year.

Can we expect these strong numbers to continue??

Well, GDP unexpectedly dropped -1.4% in the first quarter. The definition of a recession is 2 consecutive quarters of negative GDP growth. Therefore, we could be in a recession this very moment and not yet know it! With the 1-2 punch of higher mortgage rates and dropping asset prices in other markets due to a potential recession, why is buyer demand still so high?

There is one MEGATREND that is overpowering everything else: incredible demand for housing from Millennial and Gen Z buyers. There is not enough housing in our area to meet this demand.

A Morgan Stanley report on the housing market explained that the negative factors that typically dampen a housing market may not have the same effect this time around due to low inventory of homes for sale and conservative lending practices over the last decade. Those conservative lending practices means that current homeowners have manageable mortgages will not be forced to sell into depressed bids, if and when home prices drop.

I want to REFRAME the situation for you. Though nothing feels normal as we endure these economic changes, this is the new normal going forward. Strong buyer demand with low inventory will characterize the housing market in Westchester for the foreseeable future.

As a seller, we need to create a strategy to effectively position your home in this market. And as a buyer, we need to be prepared for homes to continue to move quickly and for bidding wars to remain, on move-in ready homes that are properly priced.

There are opportunities in every market. I am here to guide you through any scenario. Reach out anytime.

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