Ep #14: Luxury Real Estate in Northern Westchester

Welcome to Your Real Estate Connection in Westchester. A show for people looking to buy or sell homes in the Northern Westchester County area. Join local real estate expert Harriet Libov as she shares her professional advice on the local real estate market, connects you with knowledgeable community residents, and gives you helpful insights behind the home buying and selling process. Now, let’s dive into today’s episode.

Westchester overall is an expensive place to purchase real estate. If you’re moving from another part of a country, the value for what you get here for the money is likely much less. When I refer to the luxury market, it’s a price point of $2 million plus.

Houlihan Lawrence has been the market leader in luxury real estate in Westchester County, the northern suburbs of New York City, for many years. Our private brokerage division lead by Tony Cutugno, a senior VP and director of private brokerage, and Gay Prizio, the director of luxury marketing, offers high end marketing to position Houlihan Lawrence luxury properties both locally and globally.

Their advice and program has been invaluable to me throughout my career when I have marketed high end listings that deserve the very best photography, copywriting, exposure, and positive public relations. For the most part, luxury listings take a lot longer to sell as the pool of buyers is significantly smaller.

Then came the post-COVID real estate market which has seen volume and price increases, lack of inventory, and a surge beyond expectations. In my 20 year career, I have never worked in a luxury market like this. At the beginning of August, luxury sales that closed in Westchester County were up 133%. Closed sales in northern Westchester County, where I work, were up 182%. Pending sales in northern Westchester are strong, however not much higher than same time last year because the COVID effect was in high gear at this time last year. In 2020 after COVID, the buyers came out in full force in June after stay-at-home orders in March, April, and May.

Today I will speak with Gay Prizio, the director of luxury marketing, to gain insight into the luxury market in 2021 as we head into the fall market. Gay and I have worked together on many projects through the years. I so admire her ability to market, adapt, and analyze properties to bring them to market successfully and to close with happy sellers.

A recurring topic these days is how COVID has changed the way we live and how we want to live. For buyers it’s translated into kinds of properties that luxury consumers want, where those consumers are willing to live, how they think about amenities, and more. It’s a big topic, but as agents we need to adapt to this new luxury landscape that continues to evolve. From what I see, the most significant shifts in luxury that have happened during the pandemic are the following.

First, many luxury consumers realized in the pandemic that they didn’t need to live in dense and urban job centers. The result was that many urban consumers ended up relocating to suburban markets while those already in the suburbs moved to more rural locations. In my area, northern Westchester real estate saw a surge as New York City and northern Westchester dwellers realized they can work remotely either full time or part time. So there’s no need to be close to the city.

Secondly, more space. Luxury real estate consumers are thinking differently about amenities. Whereas in the past they might have gravitated towards things like country clubs, many now want amenities on their own property. So rather than a shared pool or gym, they want those things at home. Again northern Westchester has more acreage and useable land to house those amenities.

The third item is water. Who doesn’t love being near water? Northern Westchester has many lakes and ponds within our towns, and lower Westchester areas like Larchmont and Rye have the Long Island sound. The river towns are on the Hudson River. They all saw an increase in desirability.

Three years ago, clients of mine asked me to evaluate the price of their home. The price was not what they hoped for and decided not to sell. In early 2021 I saw a home come on the market that was on the market a few years ago and did not sell. The sellers staged it and added a pool. It sold for hundreds of thousands more than what they were last listed for.

I called my clients back when that happened and said now is your time. They had a pool and views and a magnificent backyard. The interior needed serious staging to accomplish their goal, and they were open to doing it. Fast forward they hired a stager, were on the market in 45 days. They sold their home after 10 days on the market for $3 million. We had three offers.

So let’s talk to Gay Prizio and hear about other success stories that she worked on in private brokerage, and her experiences in the 2021 luxury market.

Harriet:  Hi Gay.

Gay:  Hello Harriet. How are you?

Harriet:  Good. It’s so good to hear your voice. We’ve all been busy doing our own thing. You are the expert for my go to questions about luxury. That’s why you’re here today. So you shared with me a lot of stats as I was prepping for this episode. In 2020, you shared with me that northern Westchester luxury sales ranged in price from $2 million to $5.1. Median sale $2.5, had an average of seven acres, and an average of 6400 square feet. We’re talking about northern Westchester today. So 21, we’re in the Armonk Post Office area. 29 in Bedford and Bedford Hills.

Gay:  Just so you know Harriet, those are the number of sales that happened in each of those school districts.

Harriet:  Thank you for clarifying that. Yes. 16 sales in Chappaqua, 9 in Katonah, 24 in Mount Sisco, North and South Salem, Pound Ridge, and Waccabuc. How has that compared with past years? What do you feel has been the driving force in selling luxury properties this year in northern Westchester as you speak to all the agents you work with?

Gay:  Well, first of all, we’re very data driven in all this because many times the data really tells the story. So when we’re looking at a pre-COVID world versus a COVID world, we have to remember we’ve been in this COVID world now for over a year. So if we go back 12 months, which is the normal barometer for year over year, it doesn’t work because we’re seeing the impact of COVID from 12 months ago.

So the pre-COVID baseline is looking at 2019 data. We’ve seen in northern Westchester a big jump in sales from calendar year 2019 to calendar year 2020. So to put some of those numbers that you just referenced in perspective, pre-COVID Armonk did 12 sales over $2 million. $2 million is the price entry level that we define luxury by in Westchester County.

Harriet:  Right.

Gay:  Just to give you a greater indication of luxury. When we go north into Dutchess and Putnam County, it’s $1 million. When we go into Greenwich, it’s $3 million. So that’s kind of a sketch of the dollar amount of how we define luxury. All of northern Westchester, of course, falls into that $2 million price range. Chappaqua had a huge jump from pre-COVID to post-COVID.

In 2019, Chappaqua did just two sales over $2 million. In 2020, they jumped up to 16. That’s an enormous exponential jump. Katonah went from three pre-COVID to nine post-COVID. Then in Armonk, we doubled. We went from 12 to 21.

So I think these are huge, huge numbers. Because I think what happened in buyer’s mindset is that they were less driven by location within the COVID world and more wanting and desirous of amenities and space. Northern Westchester really offers so much of what buyers were looking for. For example, larger parcels. If you go to southern Westchester, an acre is considered a large parcel. Here in northern Westchester, as you just referenced, priorities that sold had an average of seven acres.

Now these large parcels also allow homes to have pools and tennis courts, which is something that was very much on the COVID shopping list. The COVID buyer, so to speak, was kind of looking for more things to do on their own property. They wanted to be kind of self-sufficient in many ways in terms of amenities, in terms of entertainment, in terms of having the space to have other friends, other family come and stay with them.

So I think the affluent buying public is also feeling that we hunker down in 2020, and that there is a possibility again that we may have to hunker down in the future. So they want to be prepared. So I think so much of that mindset is what propelled buyers, especially these past 12 to 18 months in northern Westchester.

Harriet:  So I’m looking at these stats. I find it really interesting that the biggest jump was Armonk and Chappaqua because, to me, those are the school districts that are very sought after. That they’re within a commutable range to the city. Whereas Bedford tends to have a big weekender market in a traditional moment, how many of these Bedford properties, do you think, were weekenders versus full time in COVID. Do you have a sense of that?

Gay:  I don’t necessarily have a sense of that. What I do have a sense of, and statistics prove this out, is that a lot of New York City buyers are almost feeling like they have two primary homes now. One being in New York City and then one being outside of the city. For our discussion, we’re talking about northern Westchester. So, again, with the mindset that they may have to hunker down, schools became very important. If they have to hunker down and put their kids into the public school wherever their second primary home is located, that became a drive of their buying decision.

Harriet:  Right.

Gay:  So to your point, I think schools have become much more important because they can and perhaps will be a primary residence for them, and their kids will go to those schools.

Harriet:  I think there’s something to that. As we’re talking, I’m going to be closing on a $3 million property where it is a weekend buyer in Armonk, which is more unusual. The kids are in private school, but maybe they’re weighing the options in how they like it in moving forward as to where they want to spend more time.

Gay:  I think that that’s a good word. I think options are important to the luxury buyer. Because when COVID struck, everybody felt like they had no options. They were coming from a place of fear, which is completely understandable when you think about those early days of the pandemic in March. Now they want to cover those bases. Those with means are used to having a life with options. So this buying decision, to your point about schools, is giving them options should they need them down the road.

Harriet:  Right. Okay. I’m personally amazed how quickly luxury homes sold in 2021. How did days on the market compare with last year on these properties versus sales under $2 million? Because the sales under $2 million were crazy fast, and luxury typically takes longer.

Gay:  I think the more interesting discussion to that question is about how the market changes pre and post-COVID. Prior to COVID, the luxury market was in favor of buyers. There was ample inventory, and buyers knew they had the upper hand. Then when COVID came, the market switched very quickly to a sellers’ market last spring. With that kind of phenomena of change, the buyer’s mindset had to change as well. They became more decisive because they knew that there was competition for the limited inventory. They knew they had to make quick decisions.

So part of the national conversation in real estate is about the historically low levels of real estate at almost every price point out there. That is still very true of our marketplaces in Westchester, Putnam, Duchess, Greenwich. Everywhere you go there is low inventory. That certainly favors sellers. However, buyers are still discerning in what they could want to call home. A well-priced listing that is well presented. That means staged, decluttered. It has great photos. It will typically sell quickly.

Homes where sellers feel particularly ambitious and have kind of wishful thinking about what their house is worth. Really what I’m talking about is an overpriced listing, will still be rejected by buyers. Buyers—even in the luxury price point, sometimes even more in the luxury price point—are price sensitive. They’re happy to pay a fair number that can be justified, but it is rare that they will overpay.

Harriet:  So basically what you’re saying, I think, is that the days on the market didn’t really change because the priorities that sat and sat and sat finally got offers after a long period of time. Those people had long days on the market.

Gay:  Correct.

Harriet:  The people who came to market smart, staged, fresh, price currently sold super quickly and kind of found it’s average.

Gay:  Right. I would say that’s a pretty fair description. In fact, what we’re seeing a lot is these aspirationally priced homes. When they take a reduction and the reduction kind of resonates with buyers, then they will sell. In fact, I often talk about the world of all the cyber buyers. There are buyers out there who are on the internet who are looking at these homes who are well aware of the inventory. If they feel that a luxury home is overpriced, they won’t waste their time and go visit the house with you. They won’t call an agent and say, “Hi, I want to go see this house.”

They will kind of circle the listing, and they’ll keep an eye on the price. Oftentimes when a reduction is taken and they get the alert that, “Oh, this house I’m looking at is now down $500,000.” Then they pick up the phone and call a realtor and say, “I want to come in and see this house.”

Harriet:  Right, right. So working remotely full time or part time, amenities, and being near the water were the driving forces behind all this surge as we know during COVID. Two years ago, no one cared about a tennis court. Now it’s a selling point. Houses with pools sold rapidly as compared to houses without pools. What other amenity trends specifically did you see?

Gay:  Well, most luxury homes have at least one home office or library. You know a space that really could be easily used as a home office. What we saw is that families wanted more than one. At least two if not three depending on the number of adult children that they had in their home and whatnot.

Another thing that we saw was this rage of an open floor plan has not worked as well when you have so many people under one room. Having a well-defined room with four walls and a door has become something that people have really been more desirous of now than they have in the past. It gives you privacy. If you’re on a Zoom call or whatever, you need to be in a pretty quiet room. You don’t want to hear the ambient noise or the TV or anybody talking in the background. So that has become very important.

I think that having these amenities—be it a pool, be it a tennis court. Which yes to your point have been through the roof. Everybody has wanted a pool. Having a tennis court has been the cherry on the cake. We’ve seen people wanting green houses and raised bed gardens because they really are getting into this kind of farm to table thing. It gives them a sense of self-sufficiency. So anything that can be on the property.

If you have a guest house or even a small party barn that can be used for a myriad of things. It can be used for additional rooms for grandchildren. It can be used as a de facto party barn as they call it. Or it can be somebody’s really lovely home office or artist studio. So people are really putting on their creativity cap in learning how they can use all of this extra space that so many of these beautiful homes in northern Westchester afford. Be it within the primary home or other outbuildings that are on the property.

Harriet:  Right, okay. I personally believe…I’ve been feeling it for a while, and I’ve now heard other people say we will continue to see strong demand throughout the first six months of 2022 at a minimum. What are you hearing in your wide circle of luxury contacts both locally and globally?

Gay:  You know Harriet, I’m hearing the same thing. I’m hearing that we’re in a pretty robust market because of the imbalance of supply and demand. We have a luxury affiliate that you know well that we work with on a luxury portfolio. They recently issued a white paper about the global luxury market. They showed the demand globally for housing remains very strong. In fact, the buyer pool is far larger than the seller pool just about everywhere globally.

So my feeling is, and I’m no economist, but I think it’s safe to assume that as long as demand remains strong and inventory is low, I believe we’re going to continue to see a strong market.

Harriet:  Okay. How has private brokerage changed your marketing plan through this year to adapt to the changes? Whether it be more outdoor photography or different emphasis when it comes to copy and describing the strengths of the house or digital marketing?

Gay:  Well, I think a lot of it has been very much tweaked. Certainly our copy has changed to point out kind of the commentary I just made about how a house can be used for working from home or extra space that you might have for family and friends who are there for an extended period of time. I think we, especially private brokerage, were very well positioned when the pandemic hit because we’ve always been believers in lifestyle property videos.

So when the market shut down in March in New York, and really, we didn’t have showings for the better part of two or three months. The combination of the great kind of architectural magazine photography that we pride ourselves on plus having lifestyle videos, which are a good complement to the photography. It kind of shows how the house lived. It was a really good one-two punch for buyers to be able to, short of, going in and walking the house, being able to really get a feel for the house.

Harriet:  Right. That’s when they were online searching because they were home.

Gay:  Exactly. That was their only means, really, at the time of looking at a house. We too had some instances where people bought and put down offers then went to contract before actually seeing the house. That did happen. I don’t want to say it happened a lot. It wasn’t like 50% of our sales, but it did happen in the early part of the pandemic. I mean 2020 was private brokerage’s best year, and I can say that this year is shaping up to be a strong year also. Our biggest complaint like everybody, and I’m sure you know this, is lack of inventory.

Harriet:  Right, right. No, I know even on properties that I have that were not luxury property. If it had a pool, I put the pool as the first shot. If I did drone photography, which you do a lot of, put that as the first shot to give people a sense of privacy. So I think I did alter marketing, which it seems like you did as well.

Gay:  Well, amenities drove the visuals as it were. It really did. It’s wonderful to see the first picture as a beautiful house. Oh this is such a beautiful colonial. But to your point, amenities were more important than the house in many instances. So a house that was chock full of amenities, it was best to highlight those early to make sure that the buyer when they’re scrolling through all the pictures at 2:00 in the morning on their iPad. That they were to see what’s most important to them first up.

Harriet:  Yeah. Okay. Thank you Gay. Thanks for talking to me today.

Gay:  Well, you are so welcome Harriet. I love your podcast. I hope everybody out there listens to them because they are so informative.

Harriet:  Oh you’re so sweet.

Gay:  You are such a great agent. You’re smart. You know the data. You know the area. That is what is important now.

Harriet:  Thank you. Thank you. You know, you’re the luxury market expert with Tony. It has changed since COVID. So that’s why I thought it was so important for us to hear your voice today.

Gay:  Ah thank you. Well, I’m so thrilled to be on your podcast with you.

Harriet:  I’m looking forward to seeing what our fall market brings.

Gay:  Me too. Get ready. I think it’s going to be busy.

Harriet:  I know. It’s always interesting the anticipation. Thank you. I’ll see you soon.

Gay:  Okay. Thanks Harriet. Bye, bye.

Harriet:  Bye.

So what’s the key takeaway of today’s episode? The luxury market over $2 million is a different animal when selling real estate. Homes have to be marketed to address the luxury consumer, their buying habits, and their preferences.

COVID has not only bolstered the average real estate consumer and the second home market but has seen soaring increases in the high end of the market with lots of amenities. Sellers who have wanted to sell these luxury homes with high taxes for years are now seeing prices and sales that would have never been possible if COVID never happened. As a result, there has been a lot of downsizing from empty nesters deciding now is time to sell.

In my next episode, I’ll be speaking to a seller who recently experienced that after consideration for years and finally did the downsize move. Hope you will join me to learn about their journey. Have a great fall, and stay safe and healthy.

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