The Tristate Area Is Unique....

In general, the buyer needs to remember that over the long haul, demand will exceed supply and prices will rise.  Barring a modern day bubonic plague where a third of the population dies or a total collapse of the American economic system, there is little that can derail that imperitive in a place like Westchester NY.  The Tristate area is somewhat unique in this way. Lower and Middle Westchester has done very well during the slow down and there are several  reasons for this phenomina:

The demand for housing with easy access to New York City is always high.   Most of Lower to Middle Westchester is within a one hour commute of Grand Central Station. Prices in Manhattan have been rising to the point where a lot of die-hard New Yorkers have made the move North taking the profits they made from their Manhattan condos and coops  with them.  They can afford a pricey home and are willing to PAY for it.  This is a case of simple supply and demand.

New York is also a desired destination for foreigners.  With the dollar down - housing in New York City has never been cheaper for those with foreign currency.  Foreign nationals are scooping up properties at what is bargain prices becuase of the favorable exchange. 
 

Potential Buyers Who Have Been Waiting for the Collapse....
 

The potential Westchester buyer who has been “waiting it out” in a Westchester rental for the last seven years has been totally befuddled by the prices and  has been asking “when are these prices coming DOWN?”  I often find these people blogging on Zillow and sites like it bewailing the injustice of it all  - they are “waiting out the decline” so they can snatch up a “deal” at 1998-2000 prices. Most of these people aren’t really buyers. They will always rent.  Those that truly do intend to buy need to be aware of the market forces at work in this location and accept that gaining entry into the housing market in the New York Tristate area will continue to be difficult.  We may have some more declines, but no one sees the bottom falling out. High prices are here to stay because of the reasons sited above.

In general, wishing for a collapse to buy in at bargain basement prices is a pipe dream.  Further, anyone thinking that the financial upheaval required for such a change wouldn’t have a negative impact on them isn’t thinking. Chances are, most prospective buyers would be in no financial shape to take advantage of such a collapse should it occur. It doesn’t matter that your business has  nothing to do with housing.  A collapse that large would ripple through the entire economy.  Meanwhile interest rates are near historic lows and the credit market has tightened temporarily eliminating a significant percentage of buyers.  Westchester just about  as affordable as it is ever going to be. What are you waiting for?  Don’t be cheap about this. This is not just an investment we are talking about  - we are also talking about a HOME!

Many of these buyers are buyers who were “shopping with their eyes” - see part I in my previous blog.  Instead of focusing on what they COULD buy, the put their energy into waiting to buy all the house they could ever want.  Meanwhile, they are burning money by staying in a rental without building up any equity and losing out on all the nice tax advantages of home ownership.