PUTNAM COUNTY, N.Y. - Thanks to the ongoing trend of city dwellers migrating north, seeking either a less expensive primary home or, for the more affluent, a second home, Putnam County experienced its second-highest number of second-quarter real estate sales in 11 years.
The numbers were released last week by the Ellman Report (Douglas Elliman Real Estate), a quarterly real estate report produced in conjunction with Miller Samuel, an independent appraisal firm. Douglas Elliman Real Estate is the largest brokerage in the New York metropolitan area and the fourth largest residential real estate company nationwide. The report provides an analysis of price and sales trends as well as other metrics to afford a picture of current conditions, as well as historical and emerging market trends.
Putnam County saw 266 residential home sales in the second quarter, up 21.5 percent over the first quarter of 2017. It was second to 2016’s second quarter (269), which was the highest sales number since 2006.
“We’ve been seeing heavy sales volume in Westchester, Putnam, and Dutchess counties for the past two years, but now we are experiencing upward price pressure as well,” said Scott Durkin, Elliman’s chief operating officer. “We are seeing growing interest in the northern suburbs of New York City for both primary and second homes.”
Jonathan Miller, president and CEO of Miller Samuel and author of the report, said market conditions have improved over the past several years.
“Putnam and Dutchess counties are consistently showing rising prices, high sales volume and falling inventory,” he said. “I suspect this pattern will only continue as the Hudson Valley gains more attention as an affordable second-home market.”
The report shows that it was the largest annual price increase in more than three years and boasted a faster marketing time with more negotiability.
Miller also noted the increase in the “absorption rate.”
“Think of it like the turnover in a grocery store—the number of months it would take to sell all the inventory at the market at the current rate of sales,” he said. “Now, it’s 7.2 months, which is faster than normal. Ten months is more normal in Putnam County. A year ago, it was 9.3 months. It’s about how the market feels. Demand is flat but inventory dropped sharply, so that combination is faster paced and feels much brisker. It is not setting records, but it’s healthy and headed in the right direction.”
Median sale prices rose 9.6 percent from the second quarter of 2016 to $328,750. However, Miller noted, that sale price is not the most important part of the report.
“The most important metric in measuring health is sales activity and not price trends,” he said. “Pricing is the caboose at the end of the train; it’s what happens after the dust settles. Most important is that sales in Putnam County show a much stronger market than we’ve seen in a couple of years.”
Other highlights of the Putnam County report include:
• Listing inventory fell 23.7 percent to 635;
• Days on market was 128 days, down 3.1 percent;
• The listing discount was 4.5 percent, up from 3.4 percent.
“There are a couple of things going on here with this report,” Miller added. “Sales activity in the Hudson Valley is seeing heavy volume and that is because of the suburban phenomenon. People are gravitating [from the city] to areas of greater affordability and the Hudson Valley is catching on as a second-home market. We hear this all the time from the boroughs, especially Brooklyn, as people look for peace and quiet, as well as affordability. They are seeing that the Hudson Valley [is a better choice] than the Hamptons.”
Miller said this migration north from the city has become more acute over the past two years.
“In 2015, the city reached an affordability threshold and, as a result, we saw heavy sales volume in the outlying suburbs, especially Putnam and Dutchess,” he said. “There was a significant change in consumer behavior.”
Miller said the reason the county has seen a drop-off in its inventory is due to the significant increase in the number of sales.
“We are having heavier sales, which is eroding [the inventory] faster than it can be replenished,” he said. “Homeowners that aren’t under time pressure [to sell] can feel the market tightening and as prices start to rise they are deciding to wait to see if they can make even more money.”
Miller said it will be interesting to watch the housing market in Mahopac in the coming year because of the recent townwide revaluation.
“Despite the revaluation it’s still a palatable market,” he said. “But sales activity is something to watch real closely. In theory, higher taxes reduce affordability and have a long-term impact on price trends and it could temper future price growth.
“The city went through a [price] boom that suburban markets didn’t see,” he added. “[Suburbia] is playing catch-up. In 2008, with the recession, the whole thing was about the city—new urbanism, walkability. But a city can’t respond quickly to changes in demand and at some point, the suburban market became very attractive. It’s a long-term trend—it’s just getting started.”