Westchester County Real Estate
The question that I am asked most often by my clients who are buying Westchester real estate is “How is the market?”
My agents and I at NestEdge Realty represent home-buying clients for all of Westchester County. I primarily focus on Chappaqua homes for sale and Scarsdale homes for sale. For the last two years, my answer to the question about the condition of the Westchester Real Estate market has been the same.
To adequately explain my answer I think it is essential first to illustrate one key trend before I begin. That trend, the condition of the properties in question, and the difference between needing a renovation and being “turn-key” have significant implications on current valuations.
A common trend in recent years is that buyers of Real Estate in Westchester County are seeking homes in turn-key condition. I am always very quick to point out to my buyer clients that buying a home in mint, or turn-key condition requires the buyer to pay a significant premium for that property. This is truer today than it has ever been. Very few of my buyer clients have the appetite to improve the homes that they purchase. These buyers tend to shy away from the cost and the effort involved in buying a house that needs significant updating. These same buyers are very quick to discard the possibility of obtaining a substantial discount on a home because it requires a significant renovation to bring it in line with today’s tastes and standards. Understanding This trend will help explain my answer to the current state of the market.
Westchester County Property Values
Well, It’s a two-part answer…
For the parts of Westchester County that I focus on which include many of the top-rated Westchester County School Districts, The condition of the market depends on what the price point of the property in question is.
The higher end of the residential real estate market in these towns is quite weak. I can make this determination both by seeing the data published by the local Westchester County Real Estate Board (of which NestEdge Realty is a member) and through our experience in the field with our clients. The higher end of the market in towns like Chappaqua, Scarsdale, Rye, Bronxville, Briarcliff Manor, and Armonk is a price point of 1.2 million dollars or higher.
It has been my theory that since the recovery from the 2008/2009 housing crash, the economy has recovered nicely for the most part and remains quite strong today. However, the highest paying and bonus-focused jobs on Wall Street that fueled the high end of the real estate market in the towns I listed above in the early 2000s only returned fractionally.
Because of this lack of high-paying finance jobs for those commuting from Westchester County to Manhattan, we have a very short supply of buyers who can afford hefty price tags for luxury properties that also come with the notoriously high Westchester County property taxes. This trend, coupled with unfriendly tax laws that limit the write-offs that our high-end property owners can declare has hurt the top tier of the Westchester Real Estate market in a big way.
The condition of the high end of the Westchester County property market that I have described above is excellent news for potential buyers of luxury properties. Potential buyers of these types of homes would often be advised by myself and my agents to employ a strategy of putting out lowball offers and letting them remain open for a prolonged period until the seller capitulates and gives the buyer his price.
The condition and the strategy on the lower end of the market in the same towns I have listed above are in direct contrast to the strategy I would recommend on the high end.
I have been seeing over and over again that properties that are fairly priced and that are in turn key condition are often attracting multiple bids that are at or just below the asking price in a very short amount of time.
It is not unheard of that a property would remain on the open market for less than 72 hours if it is at or below the median price in the area and requires very little work from the new buyer to move in. In short, we are seeing bidding wars for these types of properties in Westchester County.
So what should a buyer do that finds him or herself in a bidding war?
A bidding war is best defined as a situation where two or more parties are looking to purchase the same property for a price either very close to or even over the offering price.
There are two things that I advise my buyers to do if they find themselves in a bidding war. The first would be to try and detect whether or not the listing agent is being honest about the amount of interest in the property. It is not unheard of, even though it is unethical, for an agent to portray the interest in a property to be somewhat stronger than it is. If you do not believe that the interest is as strong as the agent portrays it to be then the right course of action is to bid a price that directly correlates to a reasonable value based on recent comparable sales in the area.
Assuming that we believe that a bidding war exists or can directly verify that there are multiple bidders on the property, my advice to my clients is often to figure out how much of a premium over the value of the house that we have established via comps that the property is worth to them. I would then suggest bidding on that number. Buyers can also employ strategies like “Removing the Finance Contingency” which would make an offer from a buyer seeking a mortgage almost as valuable as an all-cash offer.
Broker Commission Rebates And Closing Costs
There is one tremendous advantage that hiring the best realtor can offer in the case of a bidding war. In addition to completing the 16 things that any great buyers agent should do, an agent at NestEdge Realty can provide his or her buyers a tax-free broker commission rebate. The rebate at NestEdge Realty in addition to being higher than the rebate offered by Redfin in Westchester can be used as a sweetener in a bidding war. On a $1 million property, NestEdge Realty may be able to offer a sizable rebate that can be added to its client's best offer price, and that incentive can oftentimes help its buyers win a competitive bidding war. No other agency in Westchester County is likely to offer that advantage.
