WPCNR WHITE PLAINS WEEK NEWS. August 21, 2006: Mike Graessle, former Commissioner of Planning for the City of White Plains, now Co-Owner of Nelson-Vrooman/GMAC Real Estate in White Plains is bullish on the White Plains housing market remaining attractive and marketable despite sharp tax increases, predicting lower prices on high end homes with lower priced homes remaining attractive, but expressed his opinion that the White Plains condominium market is overbuilt and will take “years” to sell.
Mike Graessle, appearing on White Plains Week Friday evening, analyzed the Westchester County Board of Realtors July first half statistics, (Mr. Graessle is a member of the Board of Directors) just released. Graessle noted that there are more homes coming to the market, but buyers are being picky. He noted White Plains retains its reputation for low taxes compared to competing markets, saying prices for top of the line homes are declining while $500,000 to $700,000 homes are holding steady. The program can be seen tonight on channel 76 at 7 P.M. Photo, Courtesy White Plains Week.
Sales down.
Taking note of the sales trends in Westchester County the first six months of 2006, Graessle said “What we’re seeing is the number of (single family home) sales (1,345) has dropped 235 sales vs last year (1,580). That’s a decrease of 14.9% for single family homes. Condominiums (375 sales) are actually up 6.8% (by 24 sales). Cooperatives (522 Sales) are down 3.7% (20 sales less than 2005’s 542). Two to 5 Family homes (sales, 161) have dropped 19.5% (39 units less than 200 in 2nd quarter 2005).”
Prices on Downswing.
“Inventory” Up Substantially.
Graessle reports, “But at that same time the median sales price for single family homes has gone up 2.1%, the average sale price is now $715,000 in Westchester. Condominiums is up 7.2% at $384,900. Cooperatives is up 11.6 to $189,750 and 2-5 Family (home) price is up 2.7%.”
“Now, the thing that most of your viewers might find intriguing is that the inventory at the end of the period single family, has gone up 28.3% there are 1,032 (more) houses on the market currently in the county last year during the same quarter (up 1,032 over 3,644 in 2005). Condominiums there’s 292 (more) that’s an increase of 47.9% of condominiums for sale (up 292 over 2005’s 609). Cooperatives, that number is up 23.1% (up 259 over 1,119 last year). Two to 5 family houses is up 34.1% (up 211 over the 618 in 2005)”
Mike Graessle Analyzing the real estate situation Friday evening on White Plains Week. The entire interview may be seen Monday evening at 7 P.M. Photo Courtesy White Plains Week.
Graessle continued, “What the data is saying is intriguing, the single family houses we’re starting to see greater inventory but prices have dropped. There’s a statistical quirk here because most single family homes are purchased with a mortgage. So over the period of time which it takes to close somewhere between 2 to 3 months anyway, so this data is really for sales that took place up through March that didn’t close until this past quarter. We’re anticipating that prices will probably show a drop….We’re noticing price drops are exceeding number of new listings, and also strangely enough the number of properties that have been on the market are expiring, meaning the listing is expiring and perhaps will be renewed. So we’re seeing a building up of inventory which probably is going to suggest further price drops for at least the next quarter and the next half.”
Condo Jam Creates Rental Market Scarcity.
Jim Benerofe, Co-Host noted that condominium owners of units in Trump Tower who have been renting their units are not renting them for enough rent to cover their purchase price, and asked Graessle if he felt the rental market was going down.
Mike Graessle fielding a sensitive question on the condo market from "The Dean of White Plains Journalism," Jim Benerofe, right, on Friday night's show. Photo, Courtesy White Plains Week.
“What’s occurred you can see throughout Westchester, the same developers are developing in a number of communities, so the inventory has grown. The inventory is growing and we have more product still under way. You can see the buildings going up in Yonkers, New Rochelle and in White Plains, and those numbers are pretty startling when you see how many buildings are being built,” Greassle said.
Condos Shrink Rental Apartment Inventory.
Graessle gave his opinion on what this influx of condominium inventory has created: “The number of buildings that originally started out as rentals, and then converted to condos, I think yours (Trump Tower) is one of those, anticipated a stronger rental market and then when the banks started lending more money for condominiums people jumped over. I think the rental market actually lost a lot of units so I think your broker’s giving you good advice you’ll see more opportunity in rental. That market will change eventually. I think as developers realize perhaps they are flooding the market a little too quickly to be absorbed.
Benerofe asked, “How long do you think the absorption (of condominiums) is going to take actually?”
Graessle did not hesitiate: “I think it’s going to take years.”
Asked by CitizeNetReporter host John Bailey if he thought there was a “glut,” Graessle stopped short of saying that: “Well, we’re still building. You only need to be 2 blocks away from the studio to see 221 Main Street, you have the Ginsburg construction, the Avalon construction.”
White Plains Home
Retains Tax Edge Over Competing Markets.
Bailey asked in view of the inexorable march of city, school and county property taxes on homes in White Plains, “Have we lost our attractiveness as a tax haven?”
Graessle said WP Single Family Homes were still retaining their position relative to other towns and cities and continued to be attractive:
“When you compare our taxes to our neighboring communities in Westchester , we come out very favorable. Even when we are experiencing tax increases the magnitude you’re talking about, so are our neighbors. The result is our value that you get for your tax dollar is still good. It would be great if we could get some of the spending down, it would be great is some of the tax certioraris, which are really hurting our taxpayers were to cease, but they’re happening everywhere. We’re not getting the full value of the Renaissance and the other activities.”
“Have tax increases increase disproportionately (in relation to previous decades)?” Bailey asked.
Graessle said “When I started in the City of White Plains working in the Planning Department in 1965, we were talking home prices in the 10s of thousands of dollars, and taxes that were probably $2500 a year. Now we are talking about those houses somewhere in the $700,000 range and their taxes are now in the $10,000 range. So if you bought in 1965 and you still have that house today, you’re feeling pretty good and taxes are not your big concern.”
Asked if the “built-in” tax increases by the school district and the city was hurting the White Plains housing market, Graessle said, “Most homeowners we show around and they’re looking at taxes. They love White Plains. I have a very expensive house in white Plains that has taxes just over $30,000. Who are we showing it to? People from Scarsdale whose taxes are over $100,000 for a smaller house. The value is very good in White Plains couldn’t be better. It’s still very attractive.
Should the WP owner hold or sell now?
Graessle answered that question by telling the story of a young couple who live in White Plains now. “They own a smaller home and they’re looking at a bigger home in White Plains. And that says it. They realize good value. Good time to buy if you have interest in a higher end house because those prices are coming down far more than the middle housing market. There are more $500,000 buyers than Million Buyers.”
Graessle made his annual midyear assessment of the White Plains real estate scene on this week’s edition of White Plains Week, the city news roundup show, on “The Spirit of 76,” White Plains Public Access TV Channel 76.
You can see the program repeated this evening at 7 P.M. on Channel 76. Graessle is also Chair of the School District Capital Project Improvement Committee, and discusses his Committee’s Recommendations to the Board of Education on the $66.7 Million bond issue under consideration by the School District. (See Saturday’s story.) Graessle is interviewed by White Plains Week Hosts, John Bailey and Jim Benerofe.
