Low Inventory, Highly Motivated Buyers, Low-Interest Rates and Booming Stock Market Generate Record-Breaking Sales
Luxury sales north of NYC began soaring this spring and continued into the summer and fall. The rare combination of low inventory, a surge of highly motivated buyers, coupled with low-interest rates and a booming stock market, created a seller’s market and generated record-breaking sales. Pandemic-driven changes in buyer preferences were especially prevalent in NYC buyers who now focused more on the attributes and amenities of a home and less on proximity to NYC, according to the Houlihan Lawrence Luxury Market Report.
Westchester/Putnam/Dutchess Counties
Headline-making gains in home sales were concentrated in the luxury segment of the market. For example, in Westchester County, luxury sales ($2M and higher) grew by approximately 50%; the overall market by 11%.
New Yorkers leaving the city fueled a surge in Putnam and Dutchess counties, previously considered a second home area for New Yorkers, and now increasingly a primary home market. Luxury sales ($1M and higher) shattered records with a 300% rise in 2020, though the overall market increased by less than 10%.
In Westchester, low inventory and buyers’ newfound sense of urgency contributed to a highly competitive environment, and nearly one in five luxury homes sold above the asking price. Multiple offers bid up selling prices an average of $100,000, and the majority of properties sold above asking fell within the $2M
to $2.99M price range.
Westchester’s ultra-luxury segment ($5M and higher) did not generate the same exuberance as the lower end of the luxury market, posting just a few additional sales year-over-year. Nor did Westchester break the $10M threshold (the highest sale of the year was $8.6M), although the $10M+ market experienced considerable
momentum in Dutchess County.
In 2020, Dutchess recorded three sales over $10M, all large estates with multiple structures on 300+ acres. Before 2020, it took over ten years for Dutchess to reach the same number of $10M+ sales.
Fairfield County
Communities in Fairfield County experienced more significant gains than neighboring Westchester County. Darien, Rowayton, and New Canaan ($2M and higher) all benefited from COVID-driven wants and desires that aligned with their luxury inventory.
Greenwich was by far the best performing market at all luxury price points in 2020. Luxury sales ($3M and higher) more than doubled in 2020, and every price bracket achieved consistent growth in sales. Similar to Dutchess County, $10M+ sales in Greenwich were robust. This year’s 15 closed sales are more than double
year-over-year and well within striking distance of peak numbers achieved in 2007.
The swift pivot in buyers’ preference for more land and larger homes was partly satisfied by healthy inventory levels of homes located in Greenwich’s Back Country (typically four-acre zoning). Before the pandemic, Back Country properties were out of favor with buyers, considered too large and too far from downtown Greenwich; hence, these properties were often overlooked, leading to an accumulation of inventory. This spring, those attributes became what buyers desired, and these attractively priced properties that had been sitting on the market were absorbed, making Back Country the comeback story of the year.
“Looking forward, inventory levels remain low, pended sales are strong, and momentum is likely to continue. in the first half of 2021. The hope of widespread vaccinations and a return to some sort of normalcy is within reach. It remains to be seen if the changes that fueled the boom of 2020 are permanent or merely a
reaction to the most extraordinary circumstances. We know with certainty that 2020 was a historic year for luxury real estate north of NYC,” said Anthony P. Cutugno, Sr. Vice President, Private Brokerage.
