WESTCHESTER COUNTY, N.Y. – Existing home prices surged more than 12 percent in a one-year period ending in April, but the increase in Westchester County and New York prices was far lower.
Standard & Poor’s Case-Shiller Index, which was released this week, showed a 12.1 percent increase for 12 months ending in April for existing homes in 20 United States metropolitan areas. The increase in New York, however, was only 3.1 percent, the smallest rise of the municipalities in the index.
“What that reflects is that other cities in the country experienced a much more volatile market,’’ said Joe Rand of Better Homes & Gardens Rand Realty. “They had more dramatic increases and decreases. Values went up 10 percent where they had gone down 50 percent. In New York, prices never really went down.”
Home prices are rising in Westchester County, as is the sale of homes. New home sales rose 2.1 percent in May, according to figures released by the Commerce Department, and that figure was the highest level since July 2008.
According to the Case-Shiller index, homes in New York increased 3.2 percent in value from April 2012. Property values climbed the most in San Francisco (23.9) followed by Las Vegas (22.3) and Phoenix (21.5).
“I think over the last five or six years, I’ve gotten used to the Case-Shiller report acting almost as an exaggerated indicator,’’ Rand said. “I don’t think it’s an accurate indicator of the local market. We’re not seeing the double digit increases in Westchester County. I think the way the report is constructed tends to juice it. When prices falling, Case-Shiller was saying it was double digit declines and we were seeing one or two percent. The only thing that concerns me is you’ll have people say it’s going up 10 percent, let me raise the price of my home.”
Rand said sales of existing homes that are properly priced are brisk. Most followers of real estate believe the industry has taken a positive turn after a long period of decline.
“It’s certainly good news to see the housing market recovering more quickly than anyone anticipated,’’ Rand said. “The national trend does tend to drive local trends. I’m not sure we’ll see big fluctuations, even in New York. The trend in the market is positive, and what we’re seeing in the local region is an increase in buyer demand. That should drive some organic price appreciation.”
Pamela S. Pagnani Esq., an attorney with Whitman Breed Abbott & Morgan LLC in Greenwich, said that as prices rise, people who are purchasing homes should be prepared to do their homework. While mortgage rates are still low, it has become harder to borrow.
"Sometimes I have to manage my client’s expectations,'' Pagnani said. "Banks are going to want to see your income, 401K, pension, anything they can look at. They’re digging down and asking for everything. Some people are disappointed by that, but it can't be like it was before where they'd give you money if you were breathing. The reality is you’ll go from bank to bank, you’ll see the same situation."