Greenwich Real Estate Statistics for January 2019

January 2019 – Greenwich Real Estate Sales Hold Their Own

Government Shutdown Pushes Contracts Down

by Mark Pruner

203-969-7900

                January Sales

In some ways January 2019 was a lot like January 2018. This year we had 29 sales and last year we had 30 sales. In most price ranges we had about the same sales as last year. Sales were up from $1.5 – 3 million, where we had 13 sales which is up 7 sales from last year or more than double the 6 sales we had in January 2018.

On the downside we had only one sale from $600K – 800K which was down 6 from last year. We also saw a drop of 2 sales in our ultra-high-end, over $10 million market, from 2 sales last January to no sales this year, but we have 3 ultra-high-end contracts waiting to close. Overall these small changes are just the normal numeric chatter you get in a market with only a few dozen sales in January.

2/4/19 Inventory Contracts Last Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 6 0 1 1 1 1 6.0 15.0 6.0
$600-$800K 9 2 1 3 1 3 9.0 7.5 9.0
$800K-$1M 17 3 3 6 3 6 5.7 7.1 5.7
$1-$1.5M 43 8 4 12 4 12 10.8 9.0 10.8
$1.5-$2M 64 10 5 15 5 15 12.8 10.7 12.8
$2-$3M 110 7 8 15 8 15 13.8 18.3 13.8
$3-$4M 67 6 4 10 4 10 16.8 16.8 16.8
$4-$5M 51 1 2 3 2 3 25.5 42.5 25.5
$5-6.5M 51 2 0 2 0 2 63.8
$6.5-$10M 42 0 1 1 1 1 42.0 105.0 42.0
> $10M 24 3 0 3 0 3 20.0
                   
TOTAL 484 42 29 71 29 71 16.7 17.0 16.7

Contracts

What is not general chatter is the effect that the federal government shutdown had on our local real estate market. Contracts were down 28% from last year’s 58 contracts to this year’s 42 contracts. From $2 million to $10 million contracts were down in every category. Below $2 million the contracts were the same as last year. On the good news side, the ultra-high-end that had no sales last month has the aforesaid three contracts pending.

The overall drop in contracts in January does not bode well for sales in February.

                Inventory

On the inventory side we are having an average year overall, but we have some noticeable changes at different price levels. The jump in inventory under $1.5 million that we had for much of last year is over, at least for now. From $600,000 to $1.5 million we are down 17 listings from 86 houses to only 69 houses presently on the market. The drop in inventory may just be in comparison to 2018 when taxes gave us a bump up on inventory.

At the same time, the inventory from $1.5 – $ 3 million continues the trend that we saw in the latter part of last year with higher inventory. This may be the next phase of the new federal cap on SALT deductions that drove up lower priced inventory in the first half of 2018 having taken awhile to extend into the higher price ranges.

At the high-end, inventory looks just like last year with more inventory from $5 – 10 million and lower inventory over $10 million. I’m working on that with an effort to reach out to high-end weekenders who are tired of the commute and hassles of the Hamptons.

When all is said and done though we are within 1% of the same inventory as last year, now that is up from 2017 just like in 2018, but it’s still to early to tell what the trend will be in 2019

                The 2019 Real Estate Market

So, what can we expect in 2019? Several factors point to a better year; we just had a good January for the stock market, unemployment continues to be extraordinarily low and Connecticut, unlike New York and New Jersey, saw an increase in income tax revenue. (I wonder how much of that came from Greenwich.) The Fed also has gotten smarter and sees the extraordinary sensitivity of this housing market to increased interest rates.

On the down side we continue to hear discussions of a coming downturn, which as companies cut back on spending plans becomes a self-fulfilling prophecy. Also, as we saw last month FUD (fear, uncertainty and doubt) is a big factor in major purchases like a house. The federal government shutdown really upped the FUD factor.

So, for 2019 and most years, I tend to like to look on the bright side. If we get a federal budget, a reasonable state budget, solve the China trade matter and the stock market does okay, all of which are doable, then 2019 could be a pretty good year.

 

2018 Greenwich Neighborhoods Real Estate Reports Reports

 

Townwide Overview

  Grand Total
# Sold 593
 Avg SP  $ 2,396,448
 Avg DOM  202
 Avg. SP/SF  $ 564
Avg of SP/OLP 90.7%
 Avg. SP/ASMT 1.611
Post 2015 Appr 13.4%
Post 2015 Construction 48

Last year we had 593 home sales in Greenwich, up 26 sales or 4.4% over 2017. Our average sales price was just under $2.4 million which was a drop of about $188,000 or 7%. Most of this drop in the average sales price is due not to a drop in home values in Greenwich, but to an nearly 60% jump in sales from $800,000 – $1 million and 25% drop in sales from $5 – 10 million. When the sales below the average price increase and sales above the average price decrease, the average price will drop.

Still, what most people want to know is whether the value of their house went up or down last year. The answer is it depends, particularly, on what neighborhood your house is in and what price bracket it is in. In a prior article this month, I looked at how houses in various price ranges in Greenwich did. Let’s look at how the neighborhoods are doing from north to south and then from west to east.

Backcountry

Section North Parkway
# Sold 45
 Avg SP  $ 3,441,086
 Avg DOM  300
 Avg. SP/SF  $ 509
Avg of SP/OLP 87.7%
 Avg. SP/ASMT                             1.552
Post 2015 Appr 9.3%
Post 2015 Construction 4

In backcountry Greenwich we had 45 sales in 2018 up 1 sale from 2017. Backcountry also has the highest average sales price at $3.44 million. This unfortunately is down from a $3.77 million price last year, thought once again, much of the change in the average sales price is due to the weak sales from $5 – 10 million, where backcountry has half of all the listings in Greenwich.

As to prices, we have three indicators; sale price per s.f., the percentage of sales price to original list price and the sales price to assessment ratio. All three of these indicators were up from 2017, but they are not what you would call robust. The average sales price to original list price percentage in backcountry was up 8.2% from 79.2% to 87.7%, but this unfortunately is still the lowest SP/OLP of any neighborhood. It still however is very good news as demand is better and original pricing is more realistic.

The sales price to assessment ratio also went up substantially from 1.30 in 2017 to 1.55 in 2018. Part of this is the fact that we had 4 spec homes built after the 2015 that were sold in 2018. Here the 2015 assessment is of the vacant land or teardown that was there before. A 1.42 ratio is no change from the assessment (it’s the reciprocal of the 70% assessment ratio). With new construction in backcountry you get assessment ratios of 8.54 and 5.65 for the 2 of the 4 new houses sold last year. This really throws the average off when there are only 45 sales. Overall though 2018 was a better year for sales in the backcountry than 2017.

Mid-Country

Section South Parkway
# Sold 161
 Avg SP  $ 3,083,963
 Avg DOM  223
 Avg. SP/SF  $  570
Avg of SP/OLP 89.1%
 Avg. SP/ASMT 1.478
Post 2015 Appr 4.1%
Post 2015 Construction 7

If backcountry is on its way to recovering from a cold, mid-country is thinking about going back to work. Average days on market at 223 days is only a little higher than the townwide average of 202 days on market; and both are down from 2017. The average sales price to original list price is up a smidge to 89.1% from 88.5%. Unfortunately, this is 89.1% is still the second worst of any neighborhood after backcountry.

We have 161 sales in this area which runs all the way from the Post Road to the Merritt Parkway which ties Glenville for the biggest drop in sales Y-o-Y at 10 fewer sales. We do have 7 post-2015 houses that were sold in mid-country and a whole bunch more custom houses being built for people who bought the land. A client of mine is building 3 high-end houses in this area and the cool CGI pics can be seen if you Google 598 North St.

South of the Post Road

Section South of Post Road
# Sold 58
 Avg SP  $ 2,322,000
 Avg DOM 218
 Avg. SP/SF  $ 684
Avg of SP/OLP 91.8%
 Avg. SP/ASMT 1.755
Post 2015 Appr 23.6%
Post 2015 Construction 4

Like South of the Parkway, South of the Post Road is another eclectic, catchall, MLS defined area. It includes downtown Greenwich, Chickahominy, Bruce Park, Belle Haven and Mead Point. The high-end waterfront and gated community properties give this area the highest price per s.f. at $684 though this is slightly down from last year’s $724 per square. The area also has the second highest sales price to assessment ratio at 1.755 which equates to a 23.6% increase over the last 3.3 years since the Oct. 1, 2015 revaluation date.

Glenville

Section Glenville
# Sold 34
 Avg SP  $        1,104,860
 Avg DOM                        192
 Avg. SP/SF  $                    407
Avg of SP/OLP 90.0%
 Avg. SP/ASMT                    1.742
Post 10/1/15 Appr 22.7%
Post 2015 Construction 2

Glenville continues to be a tighter market than most in town. It has the second lowest average sales price at $1.1 million. The average house in Glenville is 2,732 s.f. and sells for $407/s.f. which also the second lowest after Pemberwick. The sales price to assessment ratio is 1.742 which equates to 22.7% appreciation (1.742/1.42) since 2015. This puts Glenville in the same group with Byram (23.0% appreciation), Cos Cob (23.2% appreciation), and South of the Post Road (23.6 appreciation). Now this appreciation is over more than three years, but it is in the right direction.

You would think that houses would be flying off the shelf in Glenville and days on market at 192 DOM is 10 days better than average for the town, but there was some tough bargaining with the average sales price to original list price ratio being 90.0% only a little better than mid-country. Still it’s doing well, you just have to price it right.

Pemberwick

Section Pemberwick
# Sold 11
 Avg SP  $      700,909
 Avg DOM                   130
 Avg. SP/SF  $               394
Avg of SP/OLP 94.3%
 Avg. SP/ASMT               1.636
Post 2015 Appr 15.2%
Post 2015 Construction 0

If you want a good deal and a nice neighborhood in Greenwich, check out Pemberwick. We only had 11 sales last year due to tight inventory so our DOM was an impressive 130 days, the second lowest in town. You also had a sales price to list price percentage at 94.3%.

Pemberwick’s price per square foot is the lowest at $394/s.f. Part of this is that we have no new construction in Pemberwick that sold in 2018. The youngest house sold was 2001, followed by 1990 and the other 9 were all built before 1971. The change in the R-6 regulation from multi-family to only duplexes made new development here even more difficult as your land cost can only be divided over 2 units rather than 3 or 4 units.

Byram

Section Byram
# Sold 13
 Avg SP  $  2,369,031
 Avg DOM                  202
 Avg. SP/SF  $              543
Avg of SP/OLP 92.2%
 Avg. SP/ASMT              1.746
Post 10/1/15 Appr 23.0%
Post 2015 Construction 0

In mid-2018, Byram had the highest average sales price as 207 Byram Shore Road sold for $17 million after 1,728 days on the market. At the end of the year, 13 houses had sold and if you exclude the four sales on Byram Shore Road, the next highest price was $760,000. Once again, we’ve seen no sales in Byram of recent construction. The youngest house sold was built in 1978 and the oldest at 37 Byram Shore Road goes back to 1690.

The blend of high-end waterfront and the good values in Byram north of I-95 leads to blended statistics. You would think that if one sale took 1,728 the average DOM would be way high, but most of the sales north of I-95 went to contract in 40 days or less, so we end up with the town-wide average of 202 days on market.

North Mianus

Section North Mianus
# Sold 10
 Avg SP  $      1,651,500
 Avg DOM                      116
 Avg. SP/SF  $                  482
Avg of SP/OLP 91.7%
 Avg. SP/ASMT                  1.881
Post 10/1/15 Appr 32.5%
Post 2015 Construction 2

North Mianus has only a handful of sales, well OK two handfuls, with 10 sales, but four of them are 21st Century construction. The area is rapidly evolving and my client bought the highest priced house at $3.5M. It’s a beautiful house that borders Hillcrest Park without the higher cost there and should continue to appreciate as new construction in this area meets the needs of many successful younger families that are moving to Greenwich.

Cos Cob

Section Cos Cob
# Sold 75
 Avg SP  $  1,507,771
 Avg DOM                  168
 Avg. SP/SF  $              490
Avg of SP/OLP 92.6%
 Avg. SP/ASMT              1.749
Post 10/1/15 Appr 23.2%
Post 2015 Construction 11

Cos Cob was a hot area in 2018. We had 75 sales up 17 from 2017. We also sold 11 houses built after our last revaluation. This is the most in any area of town, which is truly remarkable when you consider that geographically, Cos Cob is not that big a place. Days on market was good at 168 days compared to the 202 townwide average. The average sales price of $1.51 million was up $165,000 over 2017 and the sales price to original list price ratio was also the second highest at 92.6%.

Much of this is driven by $490/s.f. average, which is still a bargain compared to Old Greenwich and Riverside which are both over $600/s.f. The post 2015 appreciation could actually be a little better since it is biased upward by all of the new construction. Overall Cos Cob is a good place to invest.

Riverside

Section Riverside
# Sold 101
 Avg SP  $                2,426,776
 Avg DOM                                 181
 Avg. SP/SF  $                            603
Avg of SP/OLP 91.5%
 Avg. SP/ASMT                             1.536
Post 2015 Appr 8.2%
Post 2015 Construction 11

As anyone who has driven around Riverside has seen new construction is booming. I sold 151 Lockwood Road to the first buyer that saw it right after the first open house. He was developer waiting at the door when the clocked ticked over to 1:30 and the open house was over. It had been on the market less than 24 hours. Now, there are no easy sales in Greenwich anymore, so we had a hectic week of reviewing Planning & Zone regs, attorney negotiations and other issues, but the developer are looking in Riverside.

The surprising thing is that even with all the new construction, the total post-2015 appreciation is only 8.2%. A bunch of houses in Riverside, particularly in the R-7 zone sold for less than their FMV assessment. Many of these houses sold in the $800,000 to $1,000,000 range where sales went up because we had more inventory for once. It could be that these folks were particularly motivated sellers or it may be that prices just got to high. Having said that we had 101 sales up 7 sales from 2017.

Old Greenwich

Section Old Greenwich
# Sold 84
 Avg SP  $        2,185,546
 Avg DOM                         178
 Avg. SP/SF  $                    618
Avg of SP/OLP 91.5%
 Avg. SP/ASMT                     1.650
Post 2015 Appr 16.2%
Post 2015 Construction 7

On the east side of town Old Greenwich has the “prize” for highest average price per square foot at $618/s.f. Having said that its still down from last year’s amazing $734/s.f. People really like to live in Old Greenwich (and Riverside). I have a client right now that needs to live in the Old Greenwich school district, where the average sales price is even higher average within Old Greenwich as whole. Her budget limits her to $1.5 million and we  have less than a handful of options and they all need substantial work.

You can see the demand from the 178 days on market and average sales price of $2.19 million in an area without a one-acre zone. Once again this average price is down as we got more inventory below this average and those lower priced houses sold quickly. We also had good new construction with 7 spec houses selling, though Riverside had even more. Properly priced houses sell quickly in Old Greenwich.

Summary

Greenwich’s low taxes and the BET’s decision not to raise taxes this fiscal year clearly were a major plus for Greenwich housing sales they were up in 2018, when most of the surrounding areas were down. Byram, Cos Cob and North Mianus were all up. Old Greenwich, Riverside and South of the Post Road also saw sales increases, but it was a more nuanced story. Backcountry also has some things that are heartening with sales up albeit only one house, but this at a time when we had significant weakness in the $5 -10M market.

South of the Parkway/Mid-Country appears to have taken the major impact of the tax law changes in Washington and the uncertainty as to what is going to happen in Hartford. What did sell however was actually up slightly in price.

I’ve had several inquiries about people looking to sell their house in the spring market and if we can get Washington back to work it should be a decent spring market. Our last two months of 2018, we saw sales go up. Once again it should be an interesting, nuanced and complicated year and a good Realtor will make a significant difference.

 

 

Greenwich, CT Home Sales Up for all 2018 – Government Shutdown Slows Contracts in December

 

Greenwich single family home sales were up by 26 homes in 2018 compared to 2017. This a 4.4% rise in sales, which most years would not be that remarkable, but in the new tax environment it is quite remarkable. The early reports are that sales have dropped in New York City, Westchester County and other parts of Fairfield County so even a small increase in sale stands outs.

Two price ranges are driving this increase in sales with one price range being really remarkable. Sales from $800,000 to $1,000,000 are up 59% from last year, and this was driven by what in most years would be considered bad news, an increase in inventory. The Tax Cut and Jobs Act passed by the U.S Congress at the end of 2017 eliminated the deductibility of state and local taxes over $10,000.

The result was that many people who had been thinking about moving to a warmer client in the next couple of years decided to take their appreciation accumulated over decades and move in 2018. The great thing about this for Greenwich sales is that for once there was plenty of inventory from $800 – $1,000,000 and buyers bought, snapping up 73 homes in increase of 27 houses from 2017.

The other price range that saw a jump in sales was from $2 – 4 million where sales were up 16 houses to 171 houses. This price range seems to have benefitted from early downsizers who were still employed and hence tied to the NYC metro area, deciding to relocate to Greenwich where property taxes are often a third of what they are in some Westchester towns. The Town of Greenwich also contributed by freezing the property tax rate in 2018 at the already low 2017 rates.

The no property tax increase in Greenwich however was not enough to entice buyers in the $5 – 10 million dollar range where sales dropped by 13 houses to 39 houses. Curiously, at the ultra-high-end sales over $10 million went up by 25% from 8 houses to 10 houses in 2018. We also have 3 contracts on listings over $10 million, two from last year and one that went to pending contract this week. Overall, the tax changes seem to have been a plus for Greenwich.

In many ways, the more things change, the more they stay the same. As usual December sales did better than November with 50 sales up from 44 November sales. Also, as happens nearly every year, inventory took a big drop on January 1st as over 80 single family home listings expired on the last day of 2018. The result of that is that months of supply took a big move to the seller’s side. The exemplar for this is the price range from $6.5 – 10 million where we went from 56 months of supply at the beginning of December 2018 to 35 months of supply on January 4, 2019 (when I ran the inventory numbers).

1/4/19 Inventory Contracts Last Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 2 1 2 3 15 16 1.6 1.7 1.0
$600-$800K 12 3 1 4 44 47 3.3 3.4 12.0
$800K-$1M 15 4 8 12 73 77 2.5 2.6 1.9
$1-$1.5M 40 7 17 24 115 122 4.2 4.4 2.4
$1.5-$2M 59 6 3 9 95 101 7.5 7.9 19.7
$2-$3M 97 15 6 21 106 121 11.0 10.8 16.2
$3-$4M 68 8 4 12 65 73 12.6 12.6 17.0
$4-$5M 51 0 3 3 31 31 19.7 22.2 17.0
$5-6.5M 49 4 1 5 27 31 21.8 21.3 49.0
$6.5-$10M 35 1 3 4 12 13 35.0 36.3 11.7
> $10M 27 2 2 4 10 12 32.4 30.4 13.5
                   
TOTAL 455 51 50 101 593 644 9.2 9.5 9.1

The good news for the 35 listings still on the market in the $5 – 6.5 million is that we had 3 sales in December compared to only 9 sales in the first 11 months of 2018. So, more sales in December and less listings make for an almost 2 year drop in months of supply in this price range in only one month. All this means that you should always take January month of supply numbers with a large grain of salt as the sudden one-day drop in inventory from 12/31/18 to 1/1/19 means that December MoS will almost always be significantly lower than November MoS in most of the price ranges.

Overall, our inventory is about the same as last year with 455 listings as of the beginning of the year up only 4 listings from last year. Contracts however are down noticeably in most price ranges going from a total of 69 contracts last year to only 51 contracts at the end of 2018.

There is nothing like a government shutdown to make people take a step back and wait before signing on the dotted line. When will Washington realize that their lack of ability to work together is a major impediment to having a better economy?

 

As to the macro numbers, our average sales price in 2018 was $2,396,448 compared to $2,583,951 in 2017. This $188,000 drop in the average sales price in Greenwich is mathematically accurate, but it doesn’t mean that your house fell in value. This price drop can mostly be attributed to the increase in sales under $1,000,000 and the decrease in sales from $5 – 10 million. The median sales price which minimizes changes in our very high-end sales went from $1,800,000 for all of 2017 to $1,765,000 in 2018 or a drop of only $35,000. Overall, most houses in Greenwich went up a smidgen in value, but this is hidden by change in what prices ranges are selling.

If Washington gets its act together, given low unemployment and finally a rise in real wages, 2019 could be pretty good year with actual increases in average prices.

How Excel Spreadsheets are Hurting Real Estate

One of the problems with being a real estate agent in Greenwich is that we have too many financial people. Now I love people in the financial industry, most of my seller and buyers are involved with it in one way or another. The problem is that they often turn to a spreadsheet to solve their problems. I personally love spreadsheets. There is a saying, however, that that hard numbers drive out soft qualities and there are few things more qualitative than buying your home. So, this week I thought I’d like at some of the non-financial reasons to own your own home.

Your Home

There is something deeply comforting about owning your own home. It’s yours; it’s a place of refuge from all of the stress and trouble of daily life. It’s the place where your life is truly yours and your family’s. Now a long-term rental can start to feel like that, but it comes with much less control of your home.

                Your community

If you own your own home, you are literally more invested in the community. You need to care about what’s going on in your community, its schools, parks and government. The flip side for some people is that homeownership can make them feel stuck and tied to the community. Overall, though being part of a community is a plus for individuals, families and for the community and you see that every day here in Greenwich. We have thousands of people who volunteer their time to make this a better place to live. Of course, renters can do the same thing and lots of them want to do so, but homeowners really need to do this.

Your life

Owning your own home also gives you more flexibility. Whenever I rented, I rented what I needed for the term of the lease. Homeowners tend to buy houses with extra bedrooms that can accommodate expanding families, or a home office for a new business and that have guests over that actually stay in the guest bedrooms, be they related or friends. We do have starter homes that get too small for expanding families and people can rent a single-family home rather than buying it, but folks who buy tend to move less and they can always expand.

                Your house

One of the great things about owning is that you can do what you want. If you want to paint the ceiling black and have light up constellations no problem. If you want a pool, just do it. You can take out the garden in one area and move it to another area. It’s your house. Feel free to add on a wing for that expanding family. (Expansion is not free, and you’ll need a bunch of permits, but hundreds of folks are doing that right now.)

Your athletics, cars and parties

You can add a basketball goal, pitchers mound or even a tennis court, it’s your house. You also have your own garage rather than a shared garage or no garage. Of course, some houses don’t have garages or enough garage space, but that’s a decision you can make when you buy. You also have more space to entertain both in the house and in the backyard.

And, you can do it your way. One of the cooler features, I’ve seen was a high-end house that had a room off of the living room just for storing tables. The family had lots of folks over for the holidays and never needed to drag the extra tables out of the basement.

Your spaces

Houses come with extra spaces for hobbies, workbenches and storage. You can keep a lifetime of memories in them and you don’t have to move them when the lease expires. Friends of mine are great photographers and they built a custom-designed room for editing, printing and framing. Do you have a bunch of fishing trophies or lots of sports trophies feel free to display them proudly.  (This doesn’t actually work in my family, but that’s a different issue.)

Your pets

One thing we do agree on in our family is that we like dogs that you don’t have to bend over to pet. We’ve had a variety of Bernese Mountain Dogs, Scottish Deerhounds, Newfoundlands and Golden Retrievers. These aren’t exactly apartment dogs.

Pets are a big part of people’s lives and lots of landlords don’t allow pets at all or restrict tenants to one small dog. I have a rental listing at 181 E. Putnam Ave, next to where the crocuses bloom in the spring at the intersection of the Post Road and Maple Ave. By allowing pets, the number of potential tenants expands greatly, because there aren’t a lot of pet friendly rental. (BTW: Thank you to the wonderful town garden clubs that plant the flowers on Crocus Hill. They are my favorite sign of spring each year in Greenwich.)

Bottomline, if you want to figure out if you can afford the house use a spreadsheet, but if you want to know if you will be happy there use your heart.

by Mark Pruner

GreenwichStreets.com

mark@bhhsne.com

December 12, 2018

Election Over: Greenwich Real Estate Sales Up

November 2018 – The New Normal Returns

Single family home sales were up 9 sales over our 10 year average or 25% higher. Our average sale was $2.45 million and our median sales price to original list price was 92%. The price range from $800,000 to $1 million was particularly strong with sales up 5 sales for the month and 21 sales for the year, but may not continue that way.

For much of 2018, the TaxCut and Jobs Act was shaping our market. We saw more inventory at just aboutall levels, more sales at the high end, and fewer sales in a tight bracketbetween $1M and $1.5M. Inventory went up, as people who were retiring andthinking about moving in the next couple of years decided that the first threequarters of 2018 was a good time to list their house.

As of 12/1/18 Inventory Contracts Last Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 2 3 0 3 12 15 1.8 1.7
$600-$800K 10 5 4 9 43 48 2.6 2.6 2.5
$800K-$1M 19 9 11 20 64 73 3.3 3.3 1.7
$1-$1.5M 49 16 6 22 98 114 5.5 5.4 8.2
$1.5-$2M 67 11 7 18 92 103 8.0 8.1 9.6
$2-$3M 114 13 8 21 99 112 12.7 12.7 14.3
$3-$4M 71 9 6 15 61 70 12.8 12.7 11.8
$4-$5M 54 2 1 3 28 30 21.2 22.5 54.0
$5-6.5M 56 3 1 4 26 29 23.7 24.1 56.0
$6.5-$10M 46 2 0 2 9 11 56.2 52.3
> $10M 32 1 0 1 8 9 44.0 44.4
TOTAL 520 74 44 118 540 614 10.6 10.6 11.8

            Inventory & Sales

Much of the TCJA effects seemed to run its course. As of the beginning of December, our inventory is nearly identical to last year, 520 single family homes versus 518 homes last year. Whereas earlier this year we had more inventory below $1.5 million now inventory below $1.5 million is down 18 houses or 18% compared to last year. This is particularly remarkable since earlier we’d had a big spike in inventory from $1 – 1.5 million, now it actually down 7 listings from last year.

We do have more inventory from $5 – 10 million which is the segment that our governor-elect really needs to worry about as these folks pay lots of taxes.

On the sales side we are up in nearly every price range from $600,000 to $4 million. The one exception is from $1 – 1.5 million where the TJCA caused headaches from earlier this year. We are still down 16 sales for the year, but as mentioned contracts are up in this price range.

As noted in the $5 – 10 million price range where we have 15 more houses in inventory, we also are down 10 sales over last year. More inventory and fewer sales means a jump in months of supply. We are up 3.7 months of supply in the $5 – 6.5 million to 24 months of supply. While that shows a slow market, the real problem is from $6.5 – 10 million where months of supply have increased a very worrisome 33 months to 56 months of supply or 4.7 years of supply.

            $800,000 – $1,000,000 – A sweet spot for sales.

Earlier in the year, we had seen a bump in inventory from $800,000 to $1,000,000, but that was actually good news. Who doesn’t want to buy a house in Greenwich for less than $1,000,000. The numeric answer is 21 more homeowners do. This equates to 49% more sales from $800K – $1M or 43 sales last year and 64 sales this year.

The further good news for Connecticut and Greenwich is that many of these new homeowners were younger families who needed to buy lots of stuff, to fill up their new house after living in a small apartment in NYC. We also had downsizers from Westchester who had the funds to fix up their new homes, something that is less popular among younger families who generally prefer as close to move-in condition as they can get. It’s nice that we could welcome them all to Connecticut.

            $1.0 – 1.5 million – getting better

            As I said earlier in the year, we saw more inventory and fewer sales from $1.0 – $1.5 million, but that has now reversed itself. Inventory in this price range is down 14% and contracts are up 60% over last year. We are still down 14% in sale or 16 fewer houses sold this year compared to last year, but with contracts up 60% we will continue to catch up in this price range.

            The $4 Million Discontinuity

Whether you look at months of supply or year or year sales or several other factors one thing that stands out is the difference in the market above and below $4 million. Below $4 million we have about a year of supply and this continues all the way down to $2 million. Above $4 million we have almost two years of supply and that continues up to $6.5 million. So, we have two distinctly different markets.

Months of supply have two components, sales and inventory, so as we saw sales are about the same for sales above and below $4 million whether in backcountry or OG-R. What is different is the inventory. We have more high-end inventory in backcountry and mid-country and that is what is raising the months of supply for the $4 -5 million range. And, it’s mostly the increase in the $4 – 5 million inventory south of the parkway that is causing this discontinuity.

Figure 1 Sales (Blue), Actives (Green), Contracts (Yellow) $3 – 4 Million

Figure 2Sales (Blue), Actives (Green), Contracts (Yellow) $4 – 5 Million

In total from $3 – 5 million we have 130 listings and 59 of the listings are south of the parkway or 45%. At the same time we have 98 sales through the end of November and only 34% of the sales are south of the parkway. The other standout is Cos Cob where 7 properties priced from $3 – 4 million have sold so far this year and another sale is pending with only one listing presently available for sale. So, more Cos Cob sales from $3 – 4 million along with more mid-country inventory from $4 -5 million explains much of the difference numerically.

Greenwich Real Estate- Chugging Along into a Headwind

October 2018 Greenwich Real Estate Sales

October is the month that the summer tans from a hot July begin to fade just a little more and that’s a little of what we saw in the real estate market. September was a good month for sales, while October 2018 was only so-so. Having said that, there is some good news for just about price range, and some have some really good news.

10/31/18 Inventory Contracts Last Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 2 3 1 4 12 15 1.7 1.5 2.0
$600-$800K 11 5 2 7 39 44 2.8 2.9 5.5
$800K-$1M 32 12 5 17 53 65 6.0 5.7 6.4
$1-$1.5M 59 12 8 20 91 103 6.5 6.6 7.4
$1.5-$2M 83 14 6 20 84 98 9.9 9.7 13.8
$2-$3M 133 14 4 18 90 104 14.8 14.7 33.3
$3-$4M 88 15 2 17 55 70 16.0 14.5 44.0
$4-$5M 63 3 3 6 27 30 23.3 24.2 21.0
$5-6.5M 56 3 2 5 25 28 22.4 23.0 28.0
$6.5-$10M 50 2 0 2 8 10 62.5 57.5
> $10M 32 1 0 1 8 9 40.0 40.9
                   
TOTAL 609 84 33 117 492 576 12.4 12.2 18.5

$800K – $1M Real Estate Market

On the really good news side, we have the 53 sales from $800,000 to $1,000,000 and an additional 17 contracts waiting to close. This makes a total of 65 homes off the market in a segment where the inventory is only 32 houses. While that’s not lot of inventory in such a busy market, it’s close to double what we had last year at this time when we only had 17 houses.

We have more people than last year who want to sell their houses in this price range. The nice thing for those sellers is that we have plenty of folks that want to buy a home in Greenwich for under $1,000,000. The demand is still outstripping supply as we are down 1.44 months of supply to six months of supply.

            Under $800K

I was reading an article this week about how Las Vegas, one of the hardest hit markets in the recession, is once again a hot market. One of the complaints in the article was that builders were concentrating on luxury end of the market at around $400,000, leaving a shortage of lower end houses. In Greenwich the lowest listed price is $500,000 and we have only 13 houses listed under $800,000. If you are a buyer in this price range, there is an easy solution, buy a condo. WE 61 co-ops and condos listed all prices per square foot that are better than Manhattan prices.  

            The Heart of our Market  –  $1 – 3M+

Nearly half of our inventory, 46%, is from $1,000,000 to $3,000,000. It’s our bread and butter in real estate. This year the butter has sometimes felt a little more like margarine. On the good news side for sellers, inventory from $1.0 – 1.5 million is down 9 to 59 listings or 14%. Also, good news is that we have sold 174 houses priced from $1.5 – 3 million. This is 19 more sales than last sales which is a 12% increase.

The buyer’s side the new tax law hit the sales from $1 – 1.5 million the most with a drop of 12 sales from last year’s 103 sales to just 91 sales this year. For seller’s the big move to Florida may have run its course as inventory is down. The two effects of lower inventory and lower sales cancelled each other out resulting in nearly the same 6.5 months of supply this year as last year.

Once you get above $1.5 million these trends reverse, inventory is up, and sales are up. We had 20 more listing as of the beginning of November in the price range from $1.5 – 3.0 million. We also had 19 more sales in that price range compared to last year. Sellers have it better at the higher part of the price range while buyers have more choices.

            $3 – 5 million

We have 151 houses listed from $3 – 5 million and so far this year we have had 41sales which equates to about 19 months of supply. This is a slight increase in months of supply, but nothing worth wasting another sentence on.

            $5 – 10 million

The interesting price ranges are from $5 – 10 million. This year the $5 – 6.5 million has been on the good side of the market. Months of supply were about the same as $4 – 5 million and some months, like this one, actually saw slight better supply demand than the $4 – 5 million market segment. While that continues to be true, as the year has progressed the segment from $5 – 6.5 million has weakened, so that now sales and contracts have slipped behind where they were last year.

Having said this, this price segment doesn’t come close to being the weak market that we are seeing from $6.5 – 10 million. In that price segment, months of supply is up by three years due to increased inventory and decreased sales. We had no sales in this price range in October and our contracts were down from 5 last year to only 2 as of the end of October.

            Over $10M

This segment had had an outstanding year with sales up significantly from last year and inventory was down 16%. This led to months of supply dropping by 2 years compared to last year. The problem is that months of supply had been 3 year lower earlier this year. Sales have slowed with no sales in October and only one contract pending.  

New Construction in Greenwich, CT 2018

If you think there is a lot of new construction in Greenwich you are right. In areas like central Greenwich, Cos Cob, Old Greenwich and Riverside it seems there is house under construction on every block. At the present time we have 66 houses on the market that have been constructed in July 2016 or later. In that same period we have sold 82 new houses and have 4 presently under contract.

New Construction post 1/1/16– Green Active, Blue Sold, Yellow Under Contract

Now 82 new homes may sound like a lot, but since July 2016, when I last looked at new construction we have sold 1,668 single family homes so the new construction market represents only 4.9% of our sales.

These are spec homes built by contractors rather than teardowns bought by individuals who then built a new home in most cases. (You do get the occasionally get privately built homes back on the market in a year or two if the individual is transferred or getting a divorce.)

These spec homes are also at the upper end of the market. Of the 82 sales of new homes, the median price was $3.4 million while the median for all home sales in 2018 has been around $1.85M. A fifth of the new construction sold for $5M or more with the highest priced spec home being 11 French Road which sold for $12,075,000 in January of this year. The highest priced currently listed new construction is 66 Glenwood Drive which is listed at $15.75M which is down from its original list price of $17.95M. The average sales price per square foot over the last 2.5 years has been $610/s.f. compared to $569/s.f. for sales so far in 2018.

New construction gets a premium and most builders push for as much premium that they can. As a result, even though there is a huge demand for new construction, the average new construction listing sits on the market for 284 days compared to 197 days for all sales in 2016.

Now part of this is that many builders list the property early in the construction process, sometimes even before ground has been broken. Houses are hard to sell when they are just big open spaces with plywood floors and a lattice work of 2×4’s. For most builders though holding out for that premium is worthwhile since the average sale price to original list price ratio is 89.7%, nearly identical to the 91.1% for all house sales in 2018.

During the Great Recession spec building nearly dried up. We only had 5 new houses sold in 2010 as builders found it nearly impossible to get bank financing. Only a few well financed and larger developers were able to start projects then. In 2014 we tripled 2010 sales with 16 sales of new houses. This doubled in 2015 to 32 sales. In 2016 we have had nearly same new house sales with 31 and the same number in 2017. New construction expanded in 2108 and we have had 41 sale so far this year with 4 new houses under contract.

One thing the Town of Greenwich should work on is encouraging more lower-priced, new construction. For me that would be construction under $1.5M. Of the 82 sales since July 2016 years only 4 of them sold for less than $1.5M. We actually had even fewer affordable sales  from 2014 to July 2016.

What we are getting is smaller houses being torn down and replaced by larger more expensive homes and that is continuing to change the character of Greenwich. It also means that with less price diversity, the town is less resilient to market problems as housing becomes more homogenous.

It’s hard to find incentives for developers to build smaller and make less money. One thing that might work is to allow greater density for lower cost houses. Now that is anathema to traditional zoning, but that is exactly what Connecticut statute 8-30g does. For towns without at least 10% affordable housing, developers can appeal projects that have been denied by P&Z to the Superior Court. There, the judge can ignore all of the zoning laws and allow the development of high density projects. Most of these project however, are apartment style condominiums.

One proposal that might work is to provide a presumption of entitlement for a second unit on a conforming lot where the original house is a historic pre-1940 house and is preserved. At the present time the uncertainty of getting a historic overlay is discouraging more applications that would preserve historic houses. If we combine that good intent with affordable housing, we might have a powerful tool to promote historic houses and affordable houses.