2022 presented challenges for buyers as inventory continued to decline after several years of record lows. As interest rates rose, buyer demand remained robust which continued to increase median prices and decrease days on the market. Due to extraordinary demand created by the pandemic, and the further restricted inventory, sales peaked in 2020 and 2021 throughout Westchester, Putnam, and Dutchess and Fairfield Counties. And, as anticipated, sales naturally declined in 2022 after this unsustainable volume.
As the market leader North of NYC, Houlihan Lawrence is armed with the best-in-class data providing our elite agents with hyperlocal insights shaping our markets. Read on for our 2022 year end market reports, providing proprietary data-driven insights specific to the communities we serve in New York and Connecticut.
At the end of 2022, the demand for homes remained very high in relation to supply in most markets and price ranges with a few exceptions. In Northern Westchester, homes priced $4 million and up saw an increase in inventory with low demand. Putnam County homes priced over $1 million experienced the same slowdown, and parts of Dutchess County returned to a more balanced demand.
These few market shifts may be the first indicators of a market starting to normalize. As we enter 2023, conditions remain ideal for sellers who properly price their homes, as discouraged yet price-savvy buyers continue to wait for new inventory.
After two years of surging luxury sales north of NYC, the market cooled off in the second half, resulting in last year’s overall performance being rather mixed. Luxury sales in Westchester (sales $2M and higher), Putnam and Dutchess counties (sales $1M and higher), were largely unchanged, while Greenwich (sales $3M and higher), Darien and New Canaan (sales $2M and higher) experienced sharp declines.
The supply issue will not correct itself anytime soon. In the luxury market, rising interest rates have a greater impact on sellers than buyers. Many homeowners who want to sell are unwilling to give up a low rate mortgage to purchase a new home at higher rate in a tight market. Consequently, they decide to hold on to their house and wait for more favorable conditions, fueling the imbalance in the market.
Buyer demand outpaced the supply of homes for sale in Greenwich, Connecticut, again in 2022. While higher interest rates, inflation concerns, and the volatility of financial markets gave buyers numerous reasons for pause in 2022, Greenwich’s limited inventory and broad buyer interest kept the competitive bidding juices flowing. Despite a double-digit decline in home sales in 2022, prices rose while the time it took to sell a home contracted.
Limited inventory levels will continue to be a theme in 2023 as many potential sellers elect to stay put with their low mortgage rates rather than purchase a new home with today’s more expensive financing.
Throughout 2022, local real estate markets were marked by incredibly low inventory levels. The number of homes for sale at any given moment in Darien, New Canaan, and Rowayton was down over 30% compared to the same date last year. Given how constrained our markets are by low inventory levels, it is no surprise that sales trended downward during 2022.
Despite high inflation, stock market declines, and the Federal Reserve’s continued interest rate increases, the demand for homes in our markets continued to outpace supply during most of 2022. The continued low supply of homes for sale has been great news for sellers. The amount of time it takes to sell a home has plummeted more than 30% across our local markets, and the average price per square foot has increased more than 10% since last year.