July 2022 Greenwich Real Estate Market Report

Inventory Up, Contracts Down, Market Still Tight

Inventory is up 58%, sales are half of what we had last year and still we have a market that favors sellers. This year, 2022, has been a strange year.

Some recent history can be very helpful to see how we got to our very contradictory real estate market.  Last year inventory was about half of our average inventory. We peaked at 342 listing in the first week of June 2021 and then took a long, slow slide for the rest of the year. By the end of the year, we had dropped to only 152 single family homes on the market. This compares to our previous low of 299 listing over two decades ago and to an average yearend low of 390 listings. As a result, we started 2022 with inventory numbers that we didn’t have even a close precedent. We then proceeded to drift down week by week finally hitting a low point of 140 listings in March 2022.

With very little to sell, you’d think that contracts would fall too. You would have been right from June to September of 2021and then the strange things started to happen. Contracts stopped falling in October and remained flat until the year-end holidays, even as inventory took a steep dive. We had a lot of smart foresighted buyers. They correctly predicted that interest rates were going to rise, and inflation was going up too and house prices would continue to rise. Lots of buyers made the decision to buy one of the few houses that we had. They figured the house might not be perfect, but they could change that, what they couldn’t change was higher prices, higher interest rates and higher inflation so the fourth quarter of 2021 and 2022 were good times to buy.

As the Fed got serious about raising interest rates, contracts flattened out from April to June. Flat contracts numbers might seem like a flat market, but it actually represented a tight highly competitive market. Since total contracts is the difference between houses closing and going out of contract and listing going into contract, to have contract flat, meant that houses were closing just as fast as they were coming on the marketing. We saw this by the continuing decline in the days on market, a major sign of a hot market.

Our best indicator of how tight the market is, months of supply dropped from even the low levels of 2021. It was a small drop, but it led to March and April 2022, being the tightest markets, we have ever seen with months of supply measured in a couple of months and in some price categories measured in weeks.

Then came July 2022 and market dynamics changed quickly. Our inventory climbed 58%, sales were cut in half, and contracts dropped throughout the month, which should be an unmitigated disaster, but it isn’t, because 2022 is a strange year. This year we have massive tectonic plates (market factors) butting up against each other and it not at all clear which plate is going to be the subducted plate and which plate is going to be uplifted. We are coming off a trillion dollar plus stimuli from the federal government. This stimulus has a long lag and is a major cause of the inflation that we are seeing now. At the same time, any government spending this year is going to be a lot less than last year. So, sales should fall, and they have. Our sales are down dramatically from 143 sales in July 2021 to only 73 sales in July 2022. Having said that our 73 sales are identical to our 10-year pre-Covid average.  This must mean that we are back to normal.

However, in this strange land, anything that looks like normal is purely a statistical coincidence. Our sales are the same as our 10-year pre-Covid average, but our months of supply are down to 3.8 months of supply from 16.4 months of supply in 2019. To see how much things have changed from anything that could be considered normal compare months of supply in 2019 and this year. In 2019 we had 39 months of supply from $5 – 6.5 million, as of the end of this July you are looking at 7.3 months of suppl or a drop of 2.6 years of supply. At the other end of the price range, from $800K – 1.0 million we are down from 8.7 months of supply in 2019 to only 2.1 months of supply this year. In 2019 a buyer had a choice of 32 houses listed from $800K – 1.0 million. In July 2022, a buyer only has a choice of 8 houses in that price range. That 2019 buyer had several choices in Riverside and Old Greenwich. Our 2022 buyer has a choice of one house in each of Riverside and Old Greenwich and the remaining 6 houses are clustered in southeast Greenwich along the NY border.

Another statistic that may look normal but is actually very strange take a look at our months of supply. MoS is fairly flat in most price ranges up to $5 million, what could be more normal than consistency. However, MoS normally increases from the low end to the high-end. Also, months of supply are fairly consistent whether you calculate months of supply with just sales to date, or if you include contracts, or if you just analyze the July sales you get about the same months of supply. What this means is that we have a “stable” market without big drops as you look further into the future. In this case “stability” is more a sign of broad uncertainty. It’s a strange stability, and months of supply is up a little from June, so this stability may not last long.

The question is we going to get back to a balanced market with months of supply around 6 months of supply? To do that, we have to have a lot more inventory or sales have to drop significantly, which with a very aggressive Fed is possible. However, it’s not likely given our very low days on market. There are still a lot more buyers than we have inventory; it’s just that, like all of us, they are suffering through a large amount of uncertainty. Uncertainty causes pauses and slowdowns, but so far, the dramatically bad predictions have not played out. The market has slowed, but over the last couple of weeks interest rates are down as is our inventory, both signs of a tighter market.

As you would expect, with higher interest rates we are seeing a drop in sales in those price ranges where mortgages are most common. In the first half of the year, sales under $1.5 million represented about 25% of our market share. Last month sales under $1.5 million represented only 19% of our sales. With mortgage interest limited to the first $750,000, this is what you would expect, but remember this is a strange year. From $1.5 – 2.0 million market share went from 13.9% to 19.2%, so there is only so much you can read in to one month. Also, the number of deals with mortgage contingencies is way down, but it’s not clear how many people are foregoing mortgages or just foregoing mortgage contingencies.

What is clear is that we saw big changes in the market in July, and unlike June, these changes were reflected in the number of sales and contracts. You shouldn’t, and in this market, it would be ludicrous to, take a ruler and connect two data points and extend that line and expect that where that line is in 6 months has any predictive value. Now if we get 2 more months of data along that line, we might actually have a trend. Right now, we have very powerful forces pushing in opposite directions and it’s not clear where sales will come out.

Stay tuned …

Greenwich Real Estate Market Report – First Half 2022

A Fast Car with Expensive Gas on a Stormy Night

by Mark Pruner

Real estate in Greenwich set a couple of records in first half of 2022.  We had both the highest average price and highest median price at the end of 1st half. Our average sales price for a single-family home in Greenwich is now $3,089,555, this is up 24% over the $2.54 million average price that we had four years ago in June of 2018.

            Record Median Sales Price

Amazingly, our median price appreciated 32% over the same period from $1.87 million to $2.53 million. What this indicates is that demand in price ranges under the median price are going up faster than our high-end houses. Not to worry if your house is over $3.1 million, every price range is up.

Record Low Inventory

All of this is driven by another record; the lowest inventory we have ever seen. Back in the middle of March, we actually got down to 136 single family home listings. Since then, we have “strongly” recovered to 207 listings. This is 71 new listing in inventory and an increase of 52%. However, we are still down 39% from where we were at the end of June last year.  We are also down 72% from the 729 listings that we had at the end of H1 2019.

That inventory number was in itself a remarkably low number. Go back two more years to 2019 and had 729 listings at the end of the June. This 52% increase in inventory in the last couple of months is actually a decrease of 72%. Some our car has never had much gas in the tank, but it was replenished regularly just not as much as last year.

            Low Inventory Limits Sales

In the first half we had 331 sales down from the 511 blockbuster sales that we had last year. While we didn’t have the Bugatti Chiron of sales that we had last year, we still had a pretty peppy Audi TT driving sales (my favorite car, I’ve every owned:). Given the record low inventory we had every week this year, those 331 sales are remarkable. If we’d had more inventory, we would have a lot more sales.

                        What about those sky-high interest rates?

You would think reading many of the news reports that sales have stopped due to sky-high interest rates. Sales haven’t stopped, and by just about any measure interest rates are not sky high. We had 69 sales in June this year, which is below our 10-year average of 91 sales, but it’s only 24% down, when our inventory is down 72%.

Interest rates were reported over 6%, but I don’t know that anyone in Greenwich saw that rate. All of the mortgage bankers that I work with have been sending me with their weekly emails with 30-year jumbo rates in the low to mid 5%’s. ARM’s are often under 5% and at least one bank will offer you a mortgage under 4% if you are willing to move your banking relationship over to them.

In Greenwich, thought most buyers aren’t using mortgage contingencies. Normally, we are about 50:50 in contracts, with half of our sales contracts having mortgage contingencies and half, being non-contingent deals.

For the month of June, it was more like a 25:75 ratio. It was a competitive market and removing the mortgage contingency would get the buyer a better price and moved to the front of the line in multiple offer situations.

The 75% of buyers without mortgage contingencies, may well be financing their house purchase. Smart buyers in this market are underwritten pre-approved and are willing to take the small risk, that the house might not appraise out and they will need to come up with more money.

Other buyers are eschewing the typical mortgage, especially now that federal interest deduction only applies the first $750,000. Buyers are using long term margin loans, art loans, and a wide variety of non-standard financing. Still, lots of those 75% of buyers without a mortgage contingency are all-cash buyers, reallocating funds from a risky asset into the relative security of a Greenwich real estate investment where supply still can’t meet demand.

            Months of Supply also at Record Lows

You can see just how much excess demand we have for our limited inventory by looking at the months of supply numbers. This number tells you how long it would take to sell the present inventory based on how fast houses have sold year to date. The problem with this one number for months of supply is that if you have a hot first quarter and a slower June, months of supply may not accurately reflect the market right now.

Two things you can do to get a better feel for the market is to add in the contracts that are signed but haven’t closed yet and assume they will close, on average, in a month and a half. A second method is to take what closed this month and annualize that one month’s sales to see how hot the market is now. If months of supply with contracts is a lower number than months of supply only using closed sales and annualizing the current month of sales is even lower, you have an accelerating market.

When you do that in this market you see accelerating markets in several price ranges. For example, from $1.5 – $2.0 million, months of supply is a low 3.3 months, throw in the 19 contracts waiting to close and you are down to 2.9 months and annualize June sales and MoS is only 2.5 months of supply. If you are looking in that price range you presently have a choice of 25 listings, but 46 have already sold this year and 19 are under contract. It is not a soft market.

This accelerating market is seen in 4 of 11 price ranges. The other price categories are best characterized as flat with now clear signs of accelerating or decelerating. Having said that, they are already at ridiculously low levels all the way up $5 million. The only real pro-buyer market we have is over $10 million, where we have 29 listings and only 7 sales and contracts, but that was also true last year. If you are selling a house in that price range, you need to price it competitively and do a good staging job.

          An Example of Today’s inventory

Russ and I put on 562 North Street on Tuesday last week at $3.395,000. It’s an architect-designed house sitting on 2 acres with a pond in mid-country. There is a large deck that overlooks the pond and plenty of room for a pool. It also comes with two downstairs bedrooms with a full bath. One of the first-floor bedrooms has a separate entrance. This gives the owner the option of two offices, a staff suite, mother-in-law apartment, or a two-bedroom guest suite.

We had the realtor open house that Tuesday, 7/5, and had several appointments for showings right after the realtor open house. Showings have gone well and the market for that house in that location is good. It’s also good, for most other Greenwich properties, which are newly listed at market prices.

It is not the market that we had in March. Today, listing too high is much more of a problem now than it was then. Today, there is a fair amount of uncertainty, and most buyers need a reason to move when such uncertainty is present. Smart buyers see this as an opportunity.

Greenwich School Districts & Real Estate

If you had some spare cash in the year 2000, one of the better places you could have invested it was in a house in the New Lebanon school district. In 2000, you could have bought the median-priced house in this southwest section of town for $395,000.  Your “average” house would have been 2,095 s.f. and would have been on the market for 110 days. In 2021, your average size house sold that year was the same size, but up 120% to $870,000.

Equally remarkable, 2000 wasn’t a bad year in Greenwich sales. That year, we  had 785 sales which was the highest number of sales prior to the Covid years of 2020 and 2021. Demand was high in 2000, but even higher in 2021, In the New Lebanon school district sales barely grew from 2000 to 2021. We went up 2 houses from 23 houses in 2000 to 25 houses in the New Lebanon school district last year. People like this area and tend to stay. Also, most of the properties already had a house, which was close to the FAR.

Townwide, in the last 22 years we have had roughly 14,600 sales of single-family homes. Of those 14,600 sales only 393 were in the New Lebanon school district or 2.7% of all sales. Limited supplies and good prices make for good appreciation over the years.

In total, we have 11 school districts. The school districts tend to be compact with similar sized houses and zones. Analyzing sales by school district is actually a good way to compare houses in the various areas in town.  The best example is comparing the GMLS’ South of the Parkway area to Glenville and North Street school districts. In the GMLS stats, South of the Parkway has a variety of different neighborhoods and zones. The two school districts divide up the South of the Parkway area in to eastern and western halves. The northern portion, the traditional Golden Triangle, is included in the Parkway school district. This groups some of our more expensive 2-acres homes with the four-acre zone north of the Parkway.

No delineation of neighborhoods is perfect. Many of the RTM districts are pretty heterogeneous and the 63 neighborhoods that the Tax Assessor uses for detailed analysis have too few sales in each district for our realtor community to compare houses for our clients that are buying and selling.

When you do look at the school districts you can see why, in many ways, Greenwich is a small city rather than a more homogenous town. In 2021, our median sales price ranged from $3.2 million in the Julian Curtis district which includes downtown, Belle Haven, Mead Point and Indian Harbor to $716,675 in the Hamilton Avenue school district.

While our schools vary in the size of the districts, with Parkway School being by far the largest; they also vary in enrollment. Per the Connecticut state Edsight (https://public-edsight.ct.gov/, which by the way has a lot of useful information) the 2021-2022 enrollments of Greenwich public elementary schools are:

North Mianus is the largest elementary school with 498 students according to the state, while Parkway which has the largest district area wise has the smallest enrollment with 217 students. That 4-acre zone and the northern part of the 2-acre zone really spaces out students. Then again Parkway represents 1 out of 11 elementary schools, but the district paid 1 out of every 4 dollars that the town received in conveyance taxes too. The Parkway district had $8.3 billion of the $34.1 billion dollars of total sales from 2000 to 2022.

Greenwich is also known for its excellent private schools and their enrollment also appears on EdSight. Our largest private school in Greenwich is Country Day, that recently absorbed the Stanwich School. It’s enrollment in all grades totals 1,302. The second largest private school is Brunswick with 1,045 students. In total, EdSite says there are 4,853 private school students. This adds another 50% to our total student population. Many of these schools have good-sized waiting lists, but if you want to send your children to private schools, you’ll find more choice in Greenwich, than just about any place outside of New York City.

Not all students in Greenwich go to Greenwich schools, public or private. Covid has resulted in a nice influx of families with school age kids from New York City. A bunch of these families are continuing to drive their children to the New York City schools where their friends are. I know of three families that carpool to Horace Mann in NYC. We also have a lot of students that attend boarding schools elsewhere in Connecticut and around the U.S. and the world.

When looking at these numbers, you’ll notice some anomalies, such as we only had 8 home sales in the Hamilton Avenue school district last year, while the school has 324 students. A major reason for that is much of Chickahominy is in an R-6, two-family zone, so these duplexes and condo sales, as well as rentals don’t get counted in these single-family home sales numbers.

Overall, the number of home sales is up in every elementary school district with North Street being the big gainer going from 145 sales in 2000 to 208 sales in 2021 or a gain of 43%. That district is one where we saw a lot of new construction in this century.

If you look at total sales dollars, the biggest increase was the International School at Dundee. This increase is a little deceptive in that Dundee is a magnet school and many of the students get in by lottery from all over town. However, when they redistricted, the Old Greenwich elementary school district, more than 20 years ago, the properties on the north side of the old OG school district were redistricted to Dundee. These students got into the very popular international baccalaureate program at ISD by right.

Our excellent schools, both public and private, have been a major draw for home buyers. The number of choices also is very attractive to homebuyers. Greenwich is a good place to be educated.

Greenwich Real Estate Market May 2022

A Little Cooling, a Lot of Heat

by Mark Pruner

Increasing interest rates have been good for the Greenwich real estate market, the falling financial markets have not. The increase in interest rates has led to stories about the slowing real estate market nationwide, which has prompted more people to list their houses giving our surplus of buyers something to bid on.

              A little market slowing still leaves a very pro-seller market

If you are looking for slowing, you can certainly point to the unusual drop in sales from April to May this year. In April 2022, we had 62 sales of single-family homes. Last month in May we only had 58 sales reported so far or a drop of four sales. This is below our 10-year average for May of 64 sales and only the 2nd time we’ve seen sales below average in the last 23 months.

You can click on any image or table to get a larger version.

However, you only have to go back to last May to see a similar pattern. In May 2021, we saw sales drop from 89 sales in April 2021 to 88 sales in May. Sales then took off, and the next two months were all-time record months for sales. We won’t be setting any all-time records this June. Last year at this time, we had 265 contracts waiting to close and this year we only have 155 contracts. I wouldn’t be too worried, however as this is 44% more contracts, than we had in our last pre-Covid year of 2019. Also, we have those 155 contracts, when our inventory of homes is down 45% from last year.  Buyers are still moving quickly on what listings come on the market.

This 45% drop in inventory is a big change from last year, but it is a huge change from prior years. In 2019, we had 738 listings on June 1, 2019, i.e., we are down 76% in inventory from our last pre-Covid year.

              Higher interest rates lead to a little more inventory in a tight market

The good news for buyers is that the rise in interest rates has gotten the attention of a couple of dozen Greenwich homeowners who listed their houses faster than buyers could reduce the inventory. We started the month with 170 house listings on the GMLS and ended it with 179 listings for a small increase. These monthly figures hide a significant intra-month drop from 2022 inventory peak in the third week of May of 189 home listings. This peak lasted for a day only to sink to 179 listings by the end of the month. Net for the month we picked up only 9 listings due to very active buyers.

Contracts were similar starting the month at 152 contracts and ending up with a tiny rise to 155 contracts. That tiny rise, however, was significant on both the upside and the downside. Normally, you’d expect a significant rise in contracts in May as deals get done in May before leading to our biggest sales months in June and July, as these deals close. No significant contract rise indicates a noticeable slowing in the market.  

On the flip side however, we still have a very active market compared to the aforementioned 108 contracts in May of 2019. Russ and I had 4 of our buyers go to multiple bids in the last two weeks of May.

It is still a hot market, all the way up to $5 million. There is zero inventory below $600,000 and from $4 to 5 million, we have 12 listings with 49 sales and contracts meaning we are looking at only 1.6 months of supply. The market from $3 – 4 million is even tighter with just 1.4 months of supply. If you annualize, May sales, this number indicates the price range from $3 – 5 million is likely to get hotter.

              Stories of weakening market leads to more signed contracts

We have plenty of buyers under $5 million, so that market will continue to be busy; just slightly less busy than before. Markets are driven by emotion and all the stories out there are of markets that are slowing precipitously. In Greenwich, so far it just isn’t so. If you compare the April 2022 market to the May market you see a slight, but scattered uptick in inventory, leading to a slight uptick in contracts. Overall, the market went from 3.3 months of supply in April to 3.4 months of supply in May. Until we get lots more inventory, we are going to continue to have a tight market.

Now, this doesn’t mean that the shrewd buyer can’t cut a better deal for themselves in June than they could in March when inventory hit an all-time low of 136 listings. Other buyers are moving slower and making lower offers. Higher interest rates are making some people think twice and some sellers want to sell before the market is going to “crater”. Knowing this, the prepared buyer can make deals, with motivated sellers, which weren’t there to be made 3 months ago. Buyers still need to move quickly; they just have a somewhat better chance of succeeding on some properties.

              What’s the likelihood of getting to a balanced buyer/seller market in 2022?

Let’s take a look at four scenarios to see what it would take to get a balanced overall market with 6 months of supply.

Change in sales needed if current inventory was to remain the same to year-end

If we were to keep our current inventory level of 179 home listings for the rest of the year, you’d actually have to have negative sales inf 5 of our 10 price ranges to get to 6 months of supply at year-end. Our total sales would have to drop to 358 sales for the entire year to get to a balanced market. This number is even lower than the 370 sale we had in 2009 the worst year of the Great Recession, so, not very likely.

              Change in inventory needed if sales rate stays the same to year-end

How about keeping the sales rate the same for the rest of the year and increasing inventory to 6 months of supply at these sales rate? At our present sales rate this would mean total sales for the year of 629 sales, almost the same as our ten-year average. That seems reasonable, but we would have to end the year with 1,258 listings to reach 6 months of supply. This means 1,079 new listings also very unlikely.

              What if inventory doubles and sales drop 25%?

If we double our present inventory and reduce our sales rate to 75% of what it has been for the first 5 months, we actually overshot and get 9.1 months compared to our present 3.4 months of supply. We would end up selling only 210 houses in the last 7 months compared to 262 sales in the first four months and finish in a good buyer’s market.

Is that possible, yes, but the Fed would really have to overdo the interest rate increases (which they have done before). Elon Musk and other traditional “work only from office” managers would have to kill off the work from home buyers’ movement and the financial market would need to stay down or go lower possibly with an assist from difficult international issues. (NB: Elon Musk is also trying to reduce his workforce 10% so WOFO, may be his way to get there. 🙂

              6 months of supply if inventory is up 50% and sales drop 15%

                             Under $5 million

To actually get to 6 months of supply, we could increase our inventory by 50% and lower our sales rate by 15%, to get 270 listings and 534 sales at year-end. A little better than 2019, but not a lot. And, that’s for the overall market. When you look at the individual price ranges what you see even with 50% more inventory and 15% less sales is a pro-seller’s market all the way up to $5 million. Maybe, putting your house on the market now, might not be such a bad idea, if you are under listing under $5 million.

                             Over $5 million

Even the increase to over a year’s supply over $5 million doesn’t necessarily mean that we are going to have a pro-buyer’s market at the high-end. Above $5 million our inventory is actually down 31% from last year. High-end sellers are not rushing to list their houses. Also, the first 8 months of sales for the high-end, post-recession has been deceptive as high-end sales have shifted to the last five months of the year as compensation packages have shifted away from a large cash-bonus paid at the beginning of the year.

This drop in high-end inventory, may also be indicative of high-net-worth individuals wanting to keep more of their assets in real estate, which traditionally has been a good protection against inflation. For those folks having a money in a Greenwich house may look like a good allocation of capital not to be disturbed.

We’ve also seen some smart money move over to real estate. A crypto principal moved $5.5 million to a Greenwich house in March. His move looks brilliant with the continuing appreciation of house prices and halving of crypto prices. In Darien, Great Island, was listed for $100 million and got multiple offers.

Also, the 6 months rule of a balanced buyer and seller’s market just doesn’t seem to apply over $5 million. From $5-10 million, I’m guessing a balanced market, where buyers and sellers have equal bargaining power, is more like 9 months of supply and over $10 months you are looking at more like 12 months of supply.

If inflation stays up, we may see a repeat of the ‘70’s and 80’s where buyers bought the biggest house they could afford, with significant leverage to increase the return on their cash investment.

                             What-if summary

In general, what this what-if summary shows is that our inventory is so low, that it’s not likely to come up enough to “balance” the market. However, we don’t need a lot more listings to see significant increase in months of supply as the amount of inventory is low. On a percentage basis these changes in months of supply are huge, but even significantly increased inventory would still only be a fraction of historical norms. We would need to see some drastic changes in the economy, inflation, housing demand and/or interest rates before our market got back to a balanced 6 months of supply overall. Under $5 million, we’d need very big changes to turn this into a buyer’s market.

Stay tuned, the rest of the year is going to be an even more interesting….

Mark Pruner is a sales executive with Compass in their Greenwich, CT office. He can be reached at 203-969-7900 or mark.pruner@compass.com.

Riverside, CT – A Popular Place to Live

22 Years of Riverside Real Estate History in Greenwich

In 1999, the average sales price for a single-family home in Riverside, Connecticut was $956,121. By 2021 the average sales price in Riverside CT was $2,614,485. An increase of $1.66 million or 116%. The Riverside price per square foot did even a little better going from $346 per square foot to $678 per square foot or 119%

Pre COVID, at the end of April 2019, you would have had a choice of 83 different houses in Riverside. As of this week you have your choice of 15 houses a drop of 82%.  Given that 30 houses have sold so far this year in Riverside you’re looking at the lowest months of supply of any neighborhood in Greenwich with only 1.9 months or supply. (OK, the North Mianus area does have 0.8 months of supply but this area only has one listing and is one of our smallest areas of town.)

YearSales Sales Volume Avg Sales Price Avg SP/SF Avg SP/Assmt
1999143 $      136,725,285 $         956,121 $      346          2.35
2000143 $      153,386,712 $      1,072,634 $      376          2.79
2001116 $      128,854,702 $      1,110,816 $      403          3.18
2002114 $      149,634,700 $      1,312,585 $      451          3.00
2003116 $      151,397,619 $      1,305,152 $      468          1.96
2004151 $      314,300,423 $      2,081,460 $      638          2.33
2005120 $      229,981,432 $      1,916,512 $      602          2.50
2006119 $      224,356,629 $      1,885,350 $      606          2.38
200788 $      199,725,000 $      2,269,602 $      631          1.60
200880 $      218,775,565 $      2,734,695 $      683          1.53
200954 $      110,690,161 $      2,049,818 $      574          1.28
201088 $      160,860,811 $      1,827,964 $      542          1.35
2011106 $      196,796,379 $      1,856,570 $      499          1.36
2012122 $      260,516,550 $      2,135,382 $      536          1.54
2013145 $      284,545,237 $      1,962,381 $      547          1.60
201496 $      192,088,300 $      2,000,920 $      599          1.73
2015114 $      259,442,482 $      2,275,811 $      635          1.82
201693 $      197,310,338 $      2,121,617 $      601          1.64
2018107 $      251,834,350 $      2,353,592 $      595          1.54
201986 $      167,284,962 $      1,945,174 $      543          1.56
2020135 $      349,360,029 $      2,587,852 $      619          1.50
2021163 $      426,161,125 $      2,614,485 $      678          1.77
2022 Anlzd93 $      191,949,094 $      2,063,762 $      760          1.96
Grand Total2530 $  4,828,005,424 $     1,908,303 $      555          1.98
New assessment are redone every five years and become effective on July 1 of the following year

Growing up here. I played in a lot of Old Greenwich Riverside Community Center leagues from football to baseball to soccer. If you would have asked me then where the border was between Old Greenwich and Riverside, I couldn’t have told you. I knew the west side was the Mianus River and south side was Long Island, but the other two sides were kind of murky and didn’t matter as the two areas seemed much the same.

As a Realtor, I know the northern border of Riverside is at Palmer Hill Road, with two minor exception/cul-de-sacs in Palmer Circle and Apple Tree Lane. So, Palmer Hill on the north side from west to east borders a little stretch of Cos Cob east of the Mianus River then the two cul-de-sacs of Riverside and Hillcrest Park in Old Greenwich

2022 YTD Riverside Homes Sold2022 Riverside Inventory

The east side of Riverside is a little more complicated. The east side runs up Riverside Ave through the circle at the foot of Summit Road and along the west side of Binney park. The dividing line then turns left and runs up Sound Beach Ave before crossing the Post Rd. You continue briefly on Sound Beach Avenue Ext, then you take right on Bonan Drive to Mary Lane, then right on Amherst Rd, left on MacArthur Drive, a right on Florence Road and then up to Palmer Hill. All in all, not a big area, but zoning wise it is very diverse.

Greenwich Planning & Zoning map of the Riverside section of Greenwich, CT

Riverside 5 zones starting with the R-12 zones in the north (12,000 s.f. or .275 acres), what is often called our quarter-acre zone. These R-12 lots with a floor area ratio of .315 means you can build up to 3,780 s.f. (12,000 s.f. x .315 = 3,780 s.f.). Of course, this FAR limitation doesn’t apply to the basement, if it isn’t a walkout basement, nor to the attic, so you could have over 6,000 s.f. for new construction on four levels.

Below the R-12 zone is an R-7 zone running along the north side of the Post Road. The R-7 zone really should be called the R-7.5 zone since the minimum lot size is 7,500 s.f. or .172 acres, our “sixth” of an acre zone. With a .35 FAR in R-7 zone, you get an allowed square footage of 2,625 s.f.

Continuing south and crossing the Post Road, you are back to an R-12 zone inside the vast loop of Riverside Ave. Outside of Riverside Avenue you have an R-20 zone of 20,000 s.f., 0.46 acres lots; our so called half acre zone.  The .225 FAR in this zone gets you a max house size of 4,500 s.f. (plus the basement and the attic).

Then you get to something that Old Greenwich doesn’t have, an RA-1 zone whose north boundary is about halfway between the Sound and the railroad tracks. The RA-1 zone properties are one acre lots of 43,560 s.f. which with .135 FAR allows houses up to 5,881 s.f. The Riverside one-acre zone has a series of private associations, some of which are gated and guarded, giving the southwest corner the name of Little Belle Haven to some folks. (It looks good in a listing description.) And, that’s it for Riverside zones and house sizes. Well almost, you have a tiny R-6 duplex zone that only has 2 properties, and several conservation and historic overlay zones.

All this gives you a lot of options in a small area. It also means a 10-fold difference in sales prices. In 2021 we had 157 sales in Riverside and the prices varied from our lowest Riverside sales price of $705,000 in the R-7 to a $7,800,000 sale in the RA-1 zone. Patty Ekvall and my sale in Harbor Point came in 6th. At least it does if you look at the sales reported on the GMLS. There was at least one much higher sale, which didn’t get reported (sorry Gideon).

Greenwich April 2022 Sales by Neighborhood. (Click images for larger version.)

With all these high-end sales, Riverside has one of our highest prices per square foot. The sales price per square foot so far in 2022 has been $763/s.f. up from $678/s.f. last year or a jump of 12.5% in only 5 months. A significant part of that is a change in the mix of what is selling. We only have 3 listings in Riverside under $1.6 million and we have the same number over $7 million, so these higher priced properties when they sell will pull the average up a lot.

Riverside and Old Greenwich also have an average sales price to original list price of over 99%, so most listing go very close to list, and many have multiple offers going for full list or over list.

If you look back over the last 22 years, the number of sales jumps all over the place. Last year, we had the highest number of sales in Riverside that we’ve ever had with 163 sales, this beat the other two peaks with 151 sales in 2004 and 145 sales in 2013. The nadir was in in the Recession year of 2009 with only 54 sales. Over the last two decades, we’ve averaged 113 sales per year in Riverside.

The Great Recession also interrupted what had been steady growth in Riverside prices going all the way back to 1976. We had a couple of down turns, for example in the 1987 recession, but Riverside property has been pretty consistent from 1976 to 2008. During this period, the surprises were mainly on the plus side with the average price jumping 54% in 2004 and 20% in both 2007 and 2008. These big jumps were the result of a couple of big sales and that latter two were bubble years that whose over-inflated popped with slump in the Great Recession. Prices dropped in 2009 with the average down to $1.83 million in 2010 but had recovered to $2.14 million by 2012. 

Then we had a slow increase in prices, but it was a bumpy ride. The SALT tax deduction limits made 2019 a bad year for Riverside and then came Covid. In 2021, our average sales price in Riverside was up to $2.61 million, still not up to the bubble year of 2008 with its $2.73 million average sales price but chasing bubbles should be left to kids.

Going forward, our low inventory will still be putting pressure on buyers. We have seen a little slowing in demand due to interest rate increases and the stock market falling, but it hasn’t affected prices yet. At the same time, there are still a couple of years right-sizing caused by the shift to work from home and inflation spurs sales for those with money as they have traditionally been  thought of as inflation hedges. I expect that we’ll see continuing interest in Riverside houses for the rest of the year.

Now, if we just had twice the inventory, we’d see some real jumps in sales, but sales are going stay below last year unless we get lots more houses to sell.

Stay tuned …

The Greenwich Real Estate Market by Neighborhood – April 2022

by Mark Pruner

In April 2019, things were not looking good for the Greenwich real estate market. We were in the sixth year of declining sales, and this was after we had recovered nicely from the Great Recession. The Great Recession caused an all-time sales low of 370 home sales in 2009. By 2013, we had recovered to 724 sales: an impressive recovery in only 4 years and well above our 10-year average of 650 homes. We then had a steady decline for five of the next six years.

We dropped from 724 sales in 2013 to 526 single family homes sales in 2019, a drop of 27%. With the exception of 2018, it was a steady, almost linear, drop. Greenwich, and in particular, north Greenwich had fallen out of favor.

The exception year was 2018, which perked up 4.4% due to the Trump tax bill that limited SALT deductions to $10,000. As a result, tax costs in Westchester County jumped by around 30% or whatever the taxpayer’s marginal tax rate was. At the same time, the $10,000 limitation on SALT deductions also encouraged Greenwich homeowners, like Westchesterites to relocate south, just not as many. We got a net 25 more Westchesterites moving into Greenwich than we had Greenwichites moving to Florida. By 2019, the decline had resumed with 67 fewer sales, than we had in 2018

The first quarter of 2020 had a slight uptick, and, then came Covid with all its knock-on effects. That year was a record year that only stood for one year. We had an all-time record in sales in 2021 and we would be having a stellar year this year, if we had more inventory.

                A quick look at the overall Greenwich real estate market in 2022

Our sales are down this year from last year, but up almost 100% from April 2019. Sales are down, because we are at all-time record low inventory. Both our months of supply, and our daily experiences as Realtors trying to find a home for multiple buyers, say that we have a highly competitive market all the way up $5 million (and if you add in contracts, it’s not till you get over $10 million, that you have a buyer’s market.)

April 2019 YTD – 108 SalesApril 2022 YTD – 204 Sales

By the end of April 2019, we had had 108 sales or only 53% of the 204 sales that we had in the first four months of 2022. These sales were also predominantly in the southern half of the town. This year we have had 204 sales and they are distributed throughout the town.

                2022 price appreciation

The thing that everyone wants to know is how much more is their house worth this year compared to last year. So, let’s take a look at price appreciation, the most misused numbers in real estate.

Average sales price, median sales price – the backcountry example

To illustrate why, price appreciation numbers can be misleading let’s take a look at what happened to backcountry prices between 2019 and today. What’s at first is surprising is that the average sales price in backcountry actually dropped from $4.55 million in 2019 to “only” $3.86 million so far this year. The average price of a house in backcountry didn’t go down 15% from 2019, it actually went up and probably around 24% or move over the last three years.

We’ve got three measures of price appreciation and they come in two flavors, median and mean. One way to calculate the average increase in the sales price from one year to another is to compare the average sales price from this year to last year’s average sales price.

It is the easiest to calculate and the most affected by the mix of what is selling especially if there are a few very high sales or a lack of them the following year. This is what happened in 2022. Our average dropped, but this was due to lots of sales under the average price as we had a surge of young families into backcountry. Our average backcountry price last year was also higher, because of a few very high-end sales.

The median price (half of sales above and below) is better, but it is also affected by the mix of what is selling and the law of small numbers, which causes calculated amounts to change significantly, with only one or two more sales.

                                Sales price/sf or sales price/assessment

Beside average and median sales prices, the other two price appreciation statistics are sales price/sf and the sales price to the assessment ratio. The latter is usually the better statistic, if you are trying to minimize the effect of a change in the mix of what is selling.

In 2019, our median sales price to assessment ratio was 1.285 or below the 1.428 ratio is there is no change is sales price. This 1.428 ratio comes about, because, the Town Assessor, by law, assesses property at 70% of FMV for tax calculation purposes. The reciprocal of 0.7 is 1.428, so the 2019 SP/Assmt ratio of 1.285 meant that backcountry sales price had actually dropped 10% from the last reassessment done on Oct. 1, 2015. Our present backcountry median SP/Assmt ratio is 1.82 which is 41% more than 2019 SP/Assmt ratio of 1.285.

That seems high and it is. We only had 24 sales in backcountry in the first four months of this year, so the law of small numbers kicks in. That law says only a couple of sales can make a dramatic difference and that is so here. If you drop to the next highest backcountry SP/Assmt ratio, it is 1.64, so you get an appreciation of 27% from 2019 to April of this year.

This looks more representative of what actually happed as it is similar to the increase in in the median backcountry price which went up 31% from 2019 to April 2022. The 1.82 and 41% appreciation are mathematically more accurate, but it is not more representative of what is actually happening in the market.

                Overall price appreciation in Greenwich

For the town overall, we saw

  • the average sales price goes up 18%,
  • the average sales price/sf go up 20%, and
  • the average SP/Assmt ratio go up 14.4%.

Bottom line, take any real estate appreciation figures in Greenwich with a grain of salt. Your house may have done better than “average” or maybe not as good, but the thing you can be pretty sure of is it did go up, by double digit percentages, regardless of which neighborhood you are in.

If you really want to know how much your house went up contact a Realtor (my numbers below 🙂 or an appraiser. Sellers and Realtors have done pretty well in estimating sales price. So far this year, the ratio of the sales price to the original list price is 97.6%. This is also an indicator of how strong the market is as this ratio was 88.1% in 2019.

                Backcountry & Mid-country

In 2019, we only had 11 sales in backcountry and only 9 sales in mid-country in the 2-acre zone just south of the Merritt Parkway. This year we have had 27 sales in backcountry and 39 mid-country sales in the 2-acre zone, which seems to be the Covid sweet spot, combing a good amount land, a larger house and better proximity to downtown Greenwich.

Greenwich 2022 YTD Sales as of 4/30/22 (Click for larger version)

The 27 sales in backcountry this year totaled $104 million dollars compared to only $54 million in sales in 2019. As of the end of April 2022, we only had 48 listings in backcountry compared to 109 listings in 2019.

Increased sales and decreased inventory led to a dramatic drop in months of supply. We’ve gone from 3.5 YEARS of supply in 2019 to 7 months of supply in 2022. Our contracts are also doing well with 11 backcountry contracts waiting to close.

Greenwich 2022 YTD Sales versus 20219 Sales as of 4/30/22 (Click for larger version. Green cells pro-seller, orage pro-buyer)

Now 2022 has not been a perfect year backcountry and northern Greenwich sellers. The one area that shows a balanced, and even a pro-buyer, market is the market over $5 million and backcountry has half of those listings.  

Townwide, we are looking at 7.2 months of supply from $5 – 10 million and 29 months of supply over $10 million. We saw the same thing last year, when we had the same 7.2 months of supply from $5 – 10 million and 28 months of supply over $10 million. Mostly, this is because high-end sales have shifted to later in the year, so the high-end is slower, but it looks to be more of seasonal issue.

Greenwich Inventory as of 5/11/22 – 177 Single Family Homes – Down 75% from April 2019

The 7.2 months of supply in backcountry, is an amazing drop, but it is the highest of any neighborhood in Greenwich. Much of this is due to the fact that the largest portion of high-end listings there.

                South of the Post Road

The next highest months of supply, with 4.0 months, is south of the Post Road where we also have a lot of high-end properties (think Belle Haven, Mead Point and Indian Harbor). South of the Post Road also includes Chickahominy and the east side of Elm St, two of our more affordable areas where sales are going fast.  Average three high-priced areas with two more affordable areas and add in all of the new construction around downtown and the numbers are a blend and not that indicative of any price range in this area.

The good thing is that, in general, the numbers for all price points in this area point to a tight market with high demand, whether they are waterfront properties in gated communities or older houses on 0.17 acres in walking distance to the Avenue. In April 2019, there were 69 houses in inventory, now there are only 20 houses for sale.

Like Byram and Pemberwick, the affordable areas have seen some of the most appreciation in the last three years.  So much so that we have no listings under $1 million and only 4 houses listed under $2 million. We actually have more houses listed over $15 million (5 houses) than we have under $2 million.

Not everything sells immediately. In fact, townwide, 60% of houses take more than one month to get to contract, some take much more time. Of 20 houses that are presently listed, 7 of them have been on the market for more a year and these slow sellers are not just at the high-end.

As to sales, we’ve had 34 sales this year compared to 14 sales in 2019. Of those sales, 2 were under $1 million and 8 more were under $2 million. We had 5 sales that had been on for over 300 days and 4 of those five long time sales were under $2 million.

                South of the Parkway

This is our largest area in town running from the Merritt Parkway to the Post Road. Inventory here shrunk from 240 listings in April 2019 to only 46 listings this year. At the same time, sales more than doubled going from 28 houses sold three years ago to 59 houses this year. This meant that months of supply went from almost three years of supply (34.3 months) to 3.1 months.

The average price also went from $2.81 million to $4.16 million an increase of 48%. Now much of this was Covid buyers wanting much larger houses than the average buyer bought in 2019. The result was that total sales volume soared from $78.6 million to $245.3 million. That certainly helped the town’s conveyance tax collections. (BTW: The increased Gold Coast conveyance tax for sales over $2.5 million gets rebated if you stay in Connecticut for three years.)

                Old Greenwich & Riverside

In Riverside, the public listings were about the same going from 83 to 14 listings with sales going from 11 sales in the first third of 2019 to 30 sales YTD in 2022. The days on market dropped from an average of 189 days to 99 days on market. The months of supply went from 303 months of supply to 1.8 months of supply. The lowest of any of our larger areas.

Sales volume actually fell in Old Greenwich from 2019 to 2022 from $58.1 million to $50.5 million. This is what happens when inventory drops from 86 listings to 14 listings. Sales numbers fell from 23 sales in the first four months of 2019 to 20 sales in the first four months of 2022. This “drop” is actually deceptive as the market was so hot in OG, that a bunch of listings never made it to market.

Of the 20 sales reported on the Greenwich MLS, 4 of them were for reporting purposes only, i.e., they were sold off market and were reported with zero days on market. Reporting off-market is voluntary and I know of other sales that were sold off market either by agents or by the owners directly and there isn’t a record on the GMLS of the sale.

As of May 1st, the Greenwich MLS rules have changed so private listings and listings that are not yet active are much more closely regulated. Private listings will have to stay private for at least 4 months unless the listing broker pays $1,000 to bring it live earlier. Listings that are being prepared to go live can be held in “delayed” or “coming soon” status, but showings aren’t allowed until the listing is put live.

                Cos Cob

House prices went up substantially in Cos Cob with the average price/s.f. going from $416/sf to $603/sf or an increase of 29.6%. The sales price to assessment ratio went from 1.56 to 2.35 the highest sales price to assessment ratio in town and a 24.3% appreciation. (North Mianus was actually higher at 2.58, but that was based on only 5 sales.)

The big quandary is inventory and how much the increase in interest rates and the drop in the stock and bond markets are going to affect market demand. Stay tuned …

High-Tech Real Estate Marketing in the 21st Century

The world of marketing home is becoming more complicated, but if you know what you are doing that is for the best. Realtors can now reach out to potential buyers that they were not able to reach before and do so quicker, but necessarily cheaper.

              Real Estate BCE

Not that long ago, realtors had the “book”, and you could get fined for losing it or giving it to a buyer. In the book was one small, grainy B/W picture of the front of each house listed and maybe a dozen items of info on the house. Now everyone with an internet connection has 10 times that amount of information. That information doesn’t just appear, it was crafted by realtors and other professionals to put the house in the best light without violating NAR regulations, Connecticut laws and the federal Fair Housing Act.

While Realtor.com, Trulia, Compass.com and hundreds of other websites have made lots of information available. Most of it is boring. What makes listing jump off the screen are photos, aerials, and video. A traditional photographer is great, but lots more gets done to the photo before it’s gets to your computer or cell phone screen.

              Graphics are not just photos

To begin with the Realtor needs to go over with the photographer the important things on the interior, the outside and the neighborhood that need to be emphasized and pick a time when weather, sun and tide are helping. Once captured, the photos have to be polished. Grass is greened up; skies are brightened, and photos are cropped to emphasize the property’s good features. What is not done, or shouldn’t be done, are removing telephone poles and lines to improve the view. Also, you can’t change the earth’s axis as one L.A. agent did by photoshopping in a sun setting on the southern horizon. Virtual staging of furniture in rooms and photos from prior listings that are no longer representative should be identified.

Drones have added some major impact to photos and are now de rigueur for high-end properties.

The other thing, which has become common are floorplans. If you don’t put them up, prospective buyers will call you up and ask for them. Floorplans cut both ways as some buyers who might otherwise come see the house, won’t come if the present floorplan doesn’t work for them. The Realtor never gets to explain how the floorplan can be improved. The question is for lots of these prospects is whether they might be persuaded to make an offer, i.e., were these buyers really buyers. Floorplans can save a lot of time for everyone.

              The rise of video

Videos are also becoming much more common. You have the automated slideshows, then what one videographer calls the Ken Burns videos and at the high-end you have the custom videos where the sky’s the limit in bells and whistles and cost. Ken Burns has done a masterful job of zooming in on photos and fading from one to another to give a static subject a sense of motion and presence. That’s what you get with the beter “virtual tours”. Both the Ken Burns videos and the computer generated slideshow video tours usually come with generic, non-copyrighted music. These generic tours are generated automatically but have a surprising amount of viewing time online.

Once you have the photos, a careful selection in a precise order is uploaded to the MLS along with lots of text information, surveys, maps, deeds and other documentation. This information is then encoded with special codes identifying each datum type and distributed using an IDX (Internet Data Exchange) formatted fee. This feed goes to each MLS broker and to a company called Listhub in Arizona. Listhub then sends the IDX to hundreds of sites, including their sister News Corp company, Realtor.com.

              Marketing Automation

In today’s real estate market that is just the ante to get in the game. Next the Realtor needs to put it up on their Facebook page, their Instagram and Twitter feeds and craft a postcard and research a mailing list. Postcards look simple, but behind the scenes there is lot of technology. At Compass, we have a drag and drop media production system, which means we can do in minutes what used to take hours and needed the help of graphic artist.  (Other brokers have this too, but ours is pretty slick. 🙂

What’s really changed is who those postcards go to. It used to be, and it is still common, that they go to the 100 nearest neighbors, whether they just moved in or are likely to live there for another 20 years. Now Big Data services can slice and dice 100’s of factors about someone to focus on those most likely to be interested in your particular listing.

              Online marketing ads and SEO and podcasts

Realtors also have paid online advertising to market each property. Prior to 2018, online companies like Facebook would give a realtor a hundred or more parameters to narrow the focus. In 2018, the U.S. Department of Housing and Urban Development issued a set of regulations banning the use of any parameters that might be discriminatory, such as marital status, children, age, religious affiliation, etc. There are still lots of ways to slice and dice the data that makes it much more likely that the ad will reach a potential buyer.

Search engine optimization is also a great way to reach out to buyers. Russ and I both have blogs at GreenwichStreets.com and RussellPruner.com that rank highly in search engines often in the top ten depending on the search term. PR can also be highly effective, and we just started a radio show on WGCH at 10 am on Mondays Greenwich Streets. That show is distributed not only via the local airwaves, but also streaming live on WGCH.com and in on podcasts on Spotify, Amazon, Apple and Google that people can subscribe to. Our local agents have a wide range of websites, some of which are pretty famous.

              Make a plan and work the plan

Realtors have lots of tools that are only getting more features that let us market a house. However, without a carefully crafted campaign integrating all these options with a phased marketing approach, these tools lose a lot of their effectiveness. In a market as hot as this one, a properly price house will sell but will it be for the best price and on the other terms that the seller wants.

Russ and I recently had a listing that went for the most dollars over list of any listing so far this year. The marketing plan for that property ran three pages and took weeks of work before the listing went live. Once live, new parts of the plan kicked in every day. The ultimate buyer came from a hundred miles away and never saw the ads in the Greenwich Sentinel, nor the other local marketing, but several of the other bidders did.

We are not unique, every agent and brokerage firm bring their own way marketing plans and systems. There a wide variety of ways to create a marketing program that works as all these successful agents show, but each year the requirement to do a great marketing program get more complex.

But, if it was easy, it wouldn’t be fun.

April 2022 Real Estate Market Report – Record Low Inventory, Sales Up 22%

by Mark Pruner

In April 2022, our sales were up 22% over our ten-year average. We had 62 single family home sales versus our ten average of 51 sales. At the same time, our sales were down 30% from last year’s all-time record April where there were 89 sales.

The remarkable thing is that the 62 sales happened at the time when we were experiencing record low inventory. On one day in early April our inventory slipped to 136 listings. Pre-Covid, the lowest inventory we ever had was 299 listings. Look at another way, our sales in the one month of April was nearly half of the listings on that date. However, that’s not the way it really works. Of our 62 sales in April 2022, only 8 of those sales went to contract in April; 54 of the sales were signed in March or earlier months. (One April sale went all the way back to a contract signed in June 2021. It was a foreclosure that took 11 months to get through the bank process. It shows why foreclosures often aren’t the deal they seem to be.)

By the end of April our inventory was up significantly for the first time this. year, but still not nearly enough to meet present demand. In the first quarter, we had been averaging around 150 listings before drifting down in early April to a weekly close of 140 listings. In the last two weeks inventory is up 21% to 170 listings a jump of 21% in only 3 weeks. One argument to be made here is that the smart-money homeowners are expecting that with the increasing interest rates that the market will cool, and they want to get their houses on the market, before the cooling becomes apparent. Or it could be just good weather that brought out more listings.

The good thing is that inventory is going up for whatever reason. This is also resulting in sales going up, but when you look at the slope of the curve, it’s not as steep as last year. Through April we have 204 sales this year versus 288 last year or a drop of 29% in sales.

Our contracts are down from 266 contracts last year to 152 as of the end of April this year or a drop of 43%. Contracts usually take 2 – 8 weeks to mature into sales, so don’t expect us to reach last year’s record sales in the next two months. Even if we have a substantial increase inventory it will take awhile before we see sales catching up to last year.

All this is like expecting that when Babe Ruth hit 60 home runs in 1927, that he was going to 73 home runs in 1928, since his 60 home runs in 1927 were 13 more than he hit the previous year. It’s just not going to happen. In 1928, he hit a still impressive 54 HR’s. Our 204 sales so far this year is almost twice the 109 sales we had in the first four months of 2019. If we can get the inventory, we’ll still have an impressive year, but it’s very unlikely, we’ll break the 1,000 sales mark like we did last year.

       The price range beating 2021

Every year there is some range or area of town that surprises you and this year it’s the $4 – 5 million price range. Sales there are up 67% from 15 sales last year to 25 sales this year. With 25 sales and only 19 listings in inventory you are looking at 3 months of supply. Add in the 14 contracts and months of supply drops to 2.7 months of supply. Annualize the 8 sales in April and you are down to 2.4 months of supply. When you see months of supply drop like this, it is a sign of an accelerating market, so if you have something to list in that price range, now is a good time to do that.

In fact, given that just about everything below $5 million has less than a 3-months supply, this is great time to list a house. It’s not till you get over $5 million that you see any sign of softness and that may not last. While we have about 8 months of supply from $5 – 10 million, if you throw in contracts, you are back down to a very pro-seller 4.5 months of supply. The one fly in the ointment is that April was a poor sales month for the $5 – 10 million sale bracket with a little over 8 months of supply when you annualize the six April sales against the 43 listings.

What this means is that we have way more sales (89 closings) than inventory (35 listings) up to $2 million. Above $5 million we have more listings (65) than we have sales (25). I wouldn’t however worry about this sector too much. Our high-end and ultra-high-end sales are now more oriented to 4th quarter sales as most of our financial folks no longer get one very big bonus in January or February which used to drive our first quarter high-end sales.

Another way to look at our market is that under our inventory under $1 million in only 5% of inventory and but represents 20% of sales. Our listings over $6.5 million account for 27% of inventory and 7% of sales, (but be patient with the high-end, it’s likely to look much better by December.

       What’s Going to Happen for the Rest of the Year?

It looks like we will finish this year with 549 sales down from our 10-year average of 621 sales. Inventory will recover throughout the year and climb back to around 400 listings by year end. Demand will continue strong but tapering throughout the year. We will see a pause in contracts in October as people await the election results followed by a rebound in November with a strong December. (NB: THIS IS NOT GOING TO HAPPEN!). Anyone who says they know what is going to happen to the Greenwich real estate market this year, doesn’t know the market and if you do know the market, you can be sure you don’t know what is going to happen, but let’s look at some factors that will be shaping the market this year.

       Rising interest rates

With the Feds announcement this week of a 0.5% increase in the fed funds rate and more to more to come demand should soften, but will it drastically cut into sales? First most people in Greenwich don’t have a mortgage contingency in their purchase contracts. This doesn’t mean that some of these buyers aren’t getting a mortgage, just that they are comfortable without having a contingency. So, will increasing rates affect the Greenwich market, some, but I expect the demand will continue to be high.

One aspect of this we are just starting to see is that homeowners with low interest rate mortgages may be more reluctant to put their houses on the market as they would have to give up a low interest rate mortgage for a high-interest rate mortgage and a higher cost per s.f. for a new house. Once again, though, if you don’t have a mortgage, this is much less of a factor. Mortgage interest deductibility is now limited to the first $750,000, so they are now a lesser factor and becoming even less of a factor as houses appreciate even more.

       Shrinking stimulus here, expanding it there

What is likely to affect the market is the disappearance of the Covid stimulus money. You take a couple of trillion dollars of stimulus money out of the market and inflation is likely to go down. But we have another major stimulus in the trillion dollar plus infrastructure bill. This at a time when construction workers of all types are in short supply. The infrastructure spending is spread out over five years, so the feds aren’t pumping a trillion dollars plus into construction this year, but it is going where it is likely to be a factor in pushing up housing construction costs.

       International issues

Shortages of all types and bottlenecks are likely to get better, but foodstuff shortages will continue to increase as the Ukraine war cuts into exports from two of our largest exporters of grains and oil. These are ingredients in much of the food that we eat. China with it’s Covid zero policy is also likely to continue exacerbate shortages as factories continue to shut down, but don’t forget it’s an election year for President Xi also.

       Work from home

Even as Covid recedes or maybe better said, as the impact of Covid recedes, with vaccines, better medicines and better treatment, you are not going force people back to Paree offices full time, once they’ve seen life on the Greenwich homestead. I’m guessing we have a couple of years, before the new office/home work balance finally settled into some form of homeostasis. With less time spent commuting a Greenwich home looks more inviting and will for a couple of years.

       List now or later or stay put?

It’s been an interesting week as three Greenwich homeowners in the finance industry have called me up to pick my brain about what they are thinking of doing. I love these conversations, as I learn as much, or more, than they do. (So, if you are wondering what to do please feel free to give me a call. I’d love to hear your thoughts.)

There is a genuine concern about a recession, but we all agreed it’s probably less than 50%. The big issue seems to be just how long it takes for higher interest rates to really affect the economy. Most of the time when the Fed does serious tightening it leads to a recession. The Fed often continues to tighten too long leading to recession. Let’s hope they learned their lesson and the Internet, and the faster flow of information means they are more nimble this time.

The thought last year for many people who decided stay in their house was that their Greenwich house was only going to be more valuable, and it is. While this is likely to happen again this year, it’s not as certain as it was. You have the issue of a possible recession, and you also have high inflation, so the price may go up, but your real return is less.

TINA is also dying. For much of the last decade of ultra-low interest rates, investor said There Is No Alternative to the equity market. With interest rates were so low and houses not appreciating much, keeping your money in equities didn’t looks so bad. Now, interest rates are going up, bonds are falling and so is the stock market as money is moving to the improving and lower risk returns in the bond market. The 2022 question is are you going to get your best return in stocks, bonds or Greenwich real estate?

The one thing we do know is that right now, our inventory is way down and we have lots of demand at least up to $5 million. Properly priced, your house should sell quickly, but there all those other issues too.

Stay tuned it’s going to be an interesting year…

Mark Pruner in the News, New Radio Show on WGCH, Highest Sale Over List in Greenwich

It’s been a busy couple of weeks with new listings coming on in the spring market, 14 Osee going to contract and being involved in 4 multiple bid situations. We won two and got out bid in two, but considering their were a total of 18 bidders we were happy with the results. Now to find our other two buyers their perfect house.

WGCH: Russ and I now have a radio show, “Greenwich Streets” on WGCH – 1490 at 10 am. We talk about the market, how buyers and sellers can get an advantage in this market and interview local movers and shakers. Each broadcast gets made into a podcast on Apple, Spotify etc. You can also stream it live on WGCH.com or subscribe to the podcast and get it the next day.

Bloomberg:  Backcountry Greenwich, Compass, fellow agent Brian Milton and I were mentioned in a Bloomberg article todayGreenwich Mansion Buyers Revive Deals in Sleepy Back Country – Bloomberg(opens in a new tab)

 Greenwich Sentinel: I wrote a column about technology and real estate in my weekly article in the Greenwich Sentinel (check out p.15)

Greenwich Time/Hearst Media : With ‘churning constantly’ housing market, Greenwich sees renewed increases in tax revenue, building permits(opens in a new tab) was an article looking at just how much the town’s revenue was up from the surge in sales in the 2021-2022 fiscal year.

 Michael Ferraro just put up one of his Leaders of Lifestyle interviews with me about the Greenwich market YTD.

Russ and I just sold 113 Woodside Drive, which went for $638,000 over list; the highest amount over list this year and it would have been the third highest out of 1,007 sales in 2021. The Compass marketing resources made getting this to market quickly a huge help. It let us create marketing material in a very compressed time scale. 

 

The 2022 Greenwich Rental Market

High Demand and Low Inventory at All Price Ranges

Two years ago, at this time, the fear of Covid was palpable. Covid was everywhere and we knew little about it. Everyone was wearing masks, and lots of people were wearing gloves, and, if you wanted to show a property, everyone wore booties. Despite this, our overall rentals in 2020 were up only 21% over the pre-Covid year of 2019. 

We went from 863 rentals in 2019 to 1,041 rentals in 2020. High-end rentals were a different story; over $12,000 per month rentals were up 233% from 60 rentals to 200 rentals. Above $20,000 per month, our rentals were up 468% from 14 rentals in a normal year to 79 rentals in 2020; and those numbers were certainly an undercount.

As the irrational fear of Covid abated, rentals actually dropped in 2021 to 784 rentals down 25% from 2020 and even 5% below our 10-year pre-Covid average. Our rental market however was a tale of two markets. Below $8,000 rentals were down by 14%. Above that price, rentals were above our 10-year average and often far above that.

Our 10-year average of rentals less than $8,000 per month is 654 rentals, while in 2021, we only rented 561 rentals a drop of 14%. Above $8,000 our 10-year average for rentals is only 142 houses.

April 2022 – Rentals last 12 months

This year we are seeing the number of rentals continue to sink. In the first quarter we had 148 rentals. It seems that many people are hanging on to their rentals and there are fewer people willing to lease their houses. The uncertainty of people’s office situation means they are often staying in place. Having said that over the last 12 months we continue to see rentals throughout the town. They are mostly concentrated in our half acre and smaller zones, but mid-country and backcountry see a fair number of rentals, though not so much this year.

Our inventory has dropped to unheard levels. This week we have only 42 rental listings on the GMLS. At this time last year, we had 91 listings, so we are down by 54%. Go back to a pre-Covid period and we are down even more. Between $6,000 per month and $16,000 per month we only have 6 listings. If you’d like a nice rental in Riverside, you have two choices: one at $14,000/mo and one at $20,000/mo.

April 2022 – Active rentals (green) and expired rentals in prior 12 months

We actually have had more rental listings expire in the last 12 months, 45 listings, than we have in inventory now. Even in this market, it is possible to over price a listing. At least 45 folks thought the market would bear more than it would or were willing to rent at their price and not below.

The pandemic increased sales more than the Great Recession, but only a little bit more. In the recession, sellers, particularly developers couldn’t sell their houses, so they decided to rent. Also, many people who could buy decided not to do so not wanting to buy a declining asset. In 2009, when we hit our low for single family home sales of only 370 houses. That same year, we had 959 rentals.

By 2012, we were back to a “normal” rental market of 780 to 860 rentals per year. In the post-recession years from 2012 to 2019, our rental market was fairly steady within those bounds. Our rental market was also fairly tight with most properties renting in weeks or a couple of months. Our rental market is always tight below $6,000/month where the majority of our rentals are.

In 2020, demand for homes took off as people wanted to get out of NYC. This increase in demand resulted in increased prices, which led to a big jump in inventory, which led to more home rental deals. People who never would have considered renting their houses were happy to do so if they could rent for $30,000 or $50,000. Below $2,000, the number of rentals actually dropped as people who wanted to get out of apartments in NYC were not jumping to move into an apartment in Greenwich.  

As inventory started to drop in the second half of 2021, our days on market took a similar drop. New rental listings that came to market were snatched up quickly. Lower inventory resulted in fewer rentals in 2021. The good news is that so far in 2022 our days on market has lengthened a little bit from an amazing 31 days in 2021 in 2021 to 42 days in the first quarter of this year.

Non-listed rentals

We have more rentals each year in Greenwich on the Greenwich Multiple Listing Service than we have house sales, with the exception of last year, when we had more house sales, 1,006, than rentals only 784.

 These are not all the rentals in Greenwich. Under $2,000 the majority of listings are done privately; either listed in the newspaper or put on Craigslist. Under this price we have between 100 and 150 rentals per year on the GMLS in a normal year. The units available under $2,000 include everything from a one-room-garage apartments to smaller condos throughout town. If a place is livable in Greenwich and listed for under $2,000/mo. it goes pretty quickly.

Also as noted above, our high-end rentals often didn’t make it to the market for a public listing as they were rented quickly in the hot, high-end market of 2020. So, take all these numbers with a grain of salt. The actual numbers are higher.

              What Do You Get?

As mentioned at the lower price points most of our inventory consists of a variety of apartments, condos, garage apartments and the occasional small carriage house. From $4,000 to $6,000 we are about evenly split between single family houses and all other types of rentals. Above $10,000 per month nearly all of our rentals are single family homes. Overall, we normally are about evenly split between single family homes and all other types of rentals. This year 60% of our rentals are single family homes.

 It’s a good time to be a landlord and if are a tenant, a good time to have a well-connected Realtor.