UPDATED October 2023 I wrote this post in 2020. A lot has changed as far as interest rates, home prices, and the economy but the principals below still stand. I decided to keep the post because the tips below do still ring true even in our current market which is a very different climate.
ORIGINAL September 2020: A lot of buyers and even industry professionals have been wondering and preparing for where the Real Estate Market headed in the next 3-6 months and 6-12 months. I still have not figured out how to read my crystal ball at home so in the meantime here are some thoughts based on current events, until I achieve clairvoyance.
Getting straight to the point: I do not see prices going down any time soon in the 650,000 or below range, that’s because that has always been entry level homes in most of lower Westchester. In some of our most competitive areas the starting price for a small 3 bedroom home can be upwards of $750,000 so yes, prices change up or down depending on the specific city or town.
I have had buyers be successful with going a bit further north into Westchester to areas like Yorktown, Peekskill, etc. because they get more for their money.
Normally when I have buyers I also like to recommend that my buyers who have had a hard time or those who are looking for a deal use the Winter as an opportunity because there is usually less competition as most people do not want to move in the cold season. A seller that is expecting a premium will not list their house in the Winter, the will instead wait for March or April. Sellers listing in December and early January will likely be more motivated. Another reason why I like my buyers to wait for a Winter market is that homes that were on in the Spring and Summer and have not sold are likely overdue for price reductions. A seller who finds his or herself coming to terms with the fact that their home is not selling for their dream price may be ready to rip the Band-Aid off at the time when less buyers are out looking, which is a great opportunity for a buyer.
Regardless of season, another important piece of advice I give my buyers is to look for homes that need some cosmetic work. Everyone wants the prefect house with the white cabinets and subway tile. If you are willing to do some cosmetic work then you will also have less competition.
We were in a seller’s market before Covid-19 and that was because of lack of inventory. This market has always been about supply and demand and the supply of updated or move-in homes at a reasonable price here has always been low. Now there are fewer people who want to leave their houses to downsize into apartments. There is even less inventory, with higher demand as couples/families are coming to the suburbs earlier than normal, and lower interest rates giving buyers more money to work with. The Spring market will bring more inventory but also more competition because that is when families with children that are school age tend to start looking so they can time the move before the new school year begins. This area is always attractive to people from the city with families it is not just because of Covid-19.
As far as banking on foreclosures to bring a buyer’s market, I wouldn’t bet on it. Lower Westchester is not known to have a glut on Foreclosures, even during the financial crisis. Most of the jobs being lost are hospitality, travel, and retail so that is not the majority of homeowners in this region. I guess it would depend on what price point you are looking in. When it comes to foreclosures you will also be competing with investors who will have better terms than a traditional buyer so the competition is heavy there as well. Investors are biding their time and have cash at the ready.
You can’t time the stock market and you cannot time a real estate market. I had so many buyers who thought they should wait for prices to go down instead of buying in March and instead prices went up and they missed opportunities. The time to buy a home is when you are ready and you can afford it.
Don’t be discouraged by the market you just need patience and strategy.
