AUGUST 2013 GREENWICH REAL ESTATE REPORT – Mostly Hot, High End Improving

August Good Sales Month

August 2013 has been another very good month for real estate sales in Greenwich. The Greenwich MLS reported 76 sales of single family home and another 93 houses that are under contract or with accepted offers. The result is a dramatic drop of 61 listings or 12% in one month. Traditionally, inventory drops in August as new listings are held off the market in August waiting for the post-Labor Day fall market.

Market Tight or Tightening at All Price Levels

Months of Supply couldn’t really go much lower in September. Below $1 million we only have 3 – 4 months of supply with an amazing 2.9 months of supply below $600,000. What we did see in August 2013 was a tightening market from $2 million to $10 million. The most dramatic segment was from $5 – 7.5 million where months of supply fell from 27.3 months to 19.8 months of supply or a drop 7.5 months based on 4 sales in August (see Months of Supply charts below). We also have 6 contracts pending in this price category.

 

 

The September 2013 Fall Market in Greenwich

The fall market has been gangbusters so far as we have 56 new home listings, replacing in six business days nearly the entire inventory reduction in August. New inventory in the high end has been particularly dramatic as we have 20 new listings for over $5 million. At the other, and very hot end, of the market we only have seven new listings under $1 million.

A COMPETITIVE MARKET  ANALYSIS – MONTHS OF SUPPLY OF SINGLE FAMILY HOMES IN GREENWICH

The Greenwich real estate market continues to be a tale of three markets hot, warm and cool as you go up in price.

   Under $3 Million – The Hot Market

The hot part of the market is getting bigger and moving up in price range. In the early part of the year the hot market only went up to $1 million, by the second quarter it extended up to $1.5 million and now in August the hot part of the market has extended another $1.5 million to $3 million. You can see this particularly in the $2 – 3 million price range where we are at 6.8 months of supply down from 7.6 months in July.

If you look at the months of supply chart below for the $2 -3 million price range you can see that sales (blue bar) are around six month supply; the dividing line between a buyer’s and seller’s market. When you add in the 19 pending contracts months of supply are about the same (red bar) indicating that this price range will continue busy over the coming month as these contract mature into sales.

The interesting bar is the white bar which shows what months of supply would be if August sales were annualized. The result when you annualize the eighteen house sales in August sales is a drop 4.5 months of supply. Any time the white bar is noticeably shorter  than the blue sales bar you know that the most recent month was a strong month for sales.

 

   $3 – 7.5 Million – The Warming Greenwich Real Estate Market

The warm part of the market is getting better and also taking in a higher part of the market. As you move up in the price the number of buyers shrinks significantly. As a result higher end houses have always tended to stay on the market longer due to fewer buyers who can afford these houses.  The nice thing is that we saw 74 sales between $3 and 7.5 million in August and this is in addition to the 63 sales we saw in July.

Once again if you take a look at the white bars in the months of supply chart you can see how much better the $3 – 4 million range did as well as the $5 – 7.5 million range. If sales in the $3 – 4 million range keep up then this category might be headed for hotness. The one anomaly here is that there are no sales between $4 and 5 million in August. This is more an artifact of how I’ve arranged the price bands with there only being 37 listings in this price range compared with 83  and 57 listings immediately above and below this price range.

$7.5 Million and Higher – Cool but Getting a Little Better?

The ultra- high end market has been cool all year and continues that way. We did have 12 Meadowcroft Lane sell for $9.85 million after 576 days on market. Also 8 Dempsey Lane which had been on for $7.99 sold for $7.375 million, but that was it for the ultra high end in August.

The good news is that we have 8 contracts or offers pending for houses listed over $10 million up from 5 contracts in August, so expect a dramatic drop in months of supply in this price range. This shouldn’t be hard since based on the one sale over $10 million  so far in 2013 we have a 10 year supply of houses over $10 million houses in Greenwich. As a result one additional sale will bring it down to “only” a five year supply.

INVENTORY & COMPETITION

Months of Supply analysis gives you good feel of the competitiveness of each price range and who has the market power. What it doesn’t show is just how many choice you have in each price range. For example in Greenwich we have 24 homes priced between $600,000 and $800,000 dollars including a listing I just put on at 1 Ferris Drive in Old Greenwich. If that’s your price range and you want to live in OG you only have four choices and if you want to live in Riverside you only have two choices.

The blue bars in the chart below show the inventory in Greenwich for home as of August 31^st, The good news is that we have 56 more listings since that time. The purple bars show how many sales have been completed so far this year in that price range. Another way to look at competition for houses is to compare the height of the blue bar (inventory) to the height of the purple bar (YTD sales). If there are at lot more sales than inventory you need to come prepared and good broker is critical.

GREENWICH REAL ESTATE INVENTORY, SALES, CONTRACTS & AUGUST SALES – A MARKET MISMATCH

The Greenwich real estate market is getting better. Sales are up 20% over last year at this time. Also the hot part of the market is moving up to higher price ranges. We still have the nagging problem that the top half of our inventory, that portion above $3 million represents less than 20% of sales to date.

If you look at the light blue pie slice in each chart above representing the $3 – 4 million price range you can see it goes to about six o’clock in the first chart inventory. The size of the slice indicates it represents about 18% of inventory. If  you look at the second chart, year to date sales through the end of August, you see that the light blue slice is much smaller and rotated around to ten o’clock. The size is smaller also representing only 8% of sales so far. You see about the same position in chart 3 August sales, but the pie size is 50% bigger at 12% of all August sales.  So this is upper end segment that is doing the best.