Last month I posted on the shrinking disparity in transaction totals in Westchester County comparing 2010 to 2011. This year has been playing "catch up" with last year's totals, and each month 2011 has been closing the gap. It was my theory that 2010 started out hot due to the stimulus but that 2011 would catch up by year's end. Last month, we were just 139 closings for single family homes through the end of the 3rd quarter.
Well, October wasn't a good month for closing the gap. We are now down by 157 transactions, 3463 in 2010 to 3306 for this year.
Here's the breakdown:
In January through October of 2010, Westchester had 3463 single family home closings at a median sale price of $640,000.
In January through October of 2011, Westchester had 3306 single family home closings at a median sale price of $620,000.
Breaking it down by month:
October 2010: 285 closings at a median price of $576,500
October 2011: 266 closings at a median price of $517,500
October sucked. The sad thing isn't that buyers aren't buying. They just can't get to the closing table for a variety of reasons. The data on pending sales shows a ton of deals on the 1-yard line that can't get into the end zone. Here is what I said last month:
A whopping 656 homes are under contract or pending right now, but the median asking price is $499,000. If only half of those close, 2011 will easily surpass 2010 in transaction total but take a body blow with median sale price. I'll bet the lion's share of those 656 deals are actually short sales. If so, that could clog up the timeline.
I hate to be right, but we still have 674 deals under contract or pending sale at that same median price of $499,000. 190 of them are pending, meaning they should close in the next week or two. But they won't.
The caution I am seeing in the marketplace is incredible- and paralyzing. Looking at my own pipeline, I have buyers refusing to sign contracts unless minor title issues are cleared (these things are typically addressed once we have a contract). Attorneys are killing deals over title issues. Banks are getting stingy about underwriting minutaie. We have one house where the owners paid taxes on both bathrooms and assumed they were legal, but the 2nd bath had no certificate of occupancy (CO), delaying things. Loans are getting denied.
Whatever can go wrong, is going wrong routinely. Add to that the high level of caution by buyers, and you get pipeline constipation. Plus, there are a ton of short sales a long way from approval and closing. We have one short sale approved since August and are on our 3rd extension because the buyer is having financing issues.
Will we catch up to 2010? We may, but it will take a coordinated effort on the part of lenders, attorneys, and ever more importantly, the municipalities in approving permits expeditiously. Again, the deals are in place. They have to close though.
Look for a photo finish!