The combination of the housing stimulus tax credit and greater affordability are bringing large numbers of new buyers to the market. “For first timers in any economy,” says Sal Prividera, a spokesman for the New York State Association of REALTORS, “it’s the lower end of the market that you see the greater amount of activity.”
“A first time home is certainly going to be at a lower price point in Erie County than Westchester County,” says Prividera, of the two counties within New York State.
In Erie, which includes Buffalo and Niagara Falls, the median sales price in August 2009 was $123,000, and existing home sales were up 20.3 percent year over year.
In Westchester County, New York City suburb, the median sales price was $644,250, and during the same period existing home sales fell by 10.5 percent.
Cynthia Howar, a broker with Washington Fine Properties in Washington D.C., says “usually, you see a recovery from the bottom, up, because it is easier to get a conforming loan (a loan under $730,000). It’s driven more by the banking and lending institutions. A function of the kind of money that is available to people to borrow”
Higher Peaks Mean Lower Bottoms
Local housing markets across the mid-Atlantic that were red hot only a few years ago are the ones that have cooled off the most. In the exclusive suburbs of metropolitan New York, such as Hunterdon County, New Jersey and Nassau County, New York higher-priced housing is not moving. Prices in these areas have not fallen by enough to offset the drag of jobs, incomes and wealth lost due to the financial crisis, say experts
“In 2006, Westchester was a red hot market. There were bidding wars, homes selling moments after they went on the market and multiple bids driving up prices. The market that we experienced at the hey day of the boom were simply unsustainable,” says Prividera.
Conversely, those markets that were not as inflated in the housing boom now appear stabile. It is the more obscure, chronically-sluggish areas with lower median home prices like Pittsburgh, Syracuse, and Buffalo, which avoided the real estate bubble and never comparatively lost their grasp of economic reality.
Unique Local Markets
There are also several unique, hyper local market situations. The numbers, which at first look like anomalies, are indeed explicable if you look closely at the region.
In the second quarter 2009, the best performer in the mid-Atlantic region in terms of existing home sales was Washington D.C. at 5.6 percent, year over year. After that, Maryland was at 4.4 percent, Delaware -3.4 percent, New York -5.5 percent, New Jersey -10.8 percent, and Pennsylvania -15.1 percent.
Howar says, “DC real estate is always more insulated than the rest of the country. We didn’t have as big of a down as other states because the government is here. We always have a steady stream of people coming and going.”