Houlihan Lawrence Q2 Market Report

The housing market remains scorching hot in the markets north of New York City. Despite buyers' having less inventory to choose from, Spring 2013 home sales were up sharply across Westchester, Putnam and Dutchess counties - more than 20% year-over-year in many areas. The combination of rising demand and falling inventory has generated modest but consistent price gains of 3-5% across most local markets, a relief for weary sellers and motivation for wary buyers. Inventory constraints have motivated buyers to broaden their search, and a few areas have outperformed the market as a result. The Rivertowns, recently coined as "hipsturbia" by The New York Times, posted a 28% increase in sales, and 8% gain in median sale price. The easy commute along the Hudson River, riverfront community parks and quaint downtown areas has resonated with NYC and Brooklyn buyers, who strive for relevant alternatives to city life. In the Greater White Plains area, sales surged by 41% year-to-date and by 67% in Q2 compared to the same period last year. A wide selection of property types and price points, plus a range of transportation options and proximity to NYC, distinguishes the Greater White Plains area to an increasingly broad base of buyers. Looking at the numbers, Westchester County posted the highest gains: · Westchester: sales jumped by 24% and median price rose 5% to $650,000 in Q2-2013 compared to Q2-2012. · Putnam: 12% more homes sold and the median sale price edged up by 3% in Q2 compared to the same period last year · Dutchess: sales grew 14% in Q2, while the median sale price dipped by 3% compared to the same period last year We expect the strong pace of sales to continue in the near term, based on pending sales (homes under contract to close in Q3) which are up 15-20% in most local markets compared to the close of Q2-2012. However, it remains to be seen whether the recent spike in mortgage rates, up more than 1% since Memorial Day, will dampen the emerging enthusiasm from buyers. Our sense is that sales levels are likely to remain strong as long as sellers are willing to accept slower gains in price. This would be a positive for long-term sustainable market growth.